Interference Under Article 227 Is Permissible Only If Order Of Arbitrator Is Completely Perverse And Illegal: Delhi High Court
Mohd Malik Chauhan
21 Oct 2024 11:30 AM IST
The Delhi High Court Bench of Justice Manoj Jain held that judicial interference under Article 227 of the Indian Constitution in the arbitral matters should be limited and confined to exceptional cases. In the present case, a petition under article 227 was filed by the petitioner, Dr. Rajan Jaiswal in which the order passed by the Sole Arbitrator on September 24,2024 was challenged. The arbitrator dismissed the application to submit additional documents on the ground that no sufficient reasons were provided to show that why they were not produced earlier. The arbitrator also noted that the documents were in possession of the applicant still they were not submitted earlier.
The court observed that arbitration proceedings had reached at an advanced stage with issues being framed on October 16, 2023 and both parties having presented their evidence. The proceedings were near to be concluded. The petitioner admitted during the arguments before the court that the documents were in their possession but necessity to submit them arose only after cross examination.
The court further referred to the Delhi High Court judgment in Kelvin Air Conditioning And Ventilation System Private Limited vs Triumph Reality Private Limited passed in (2024) wherein it was held that An Arbitral Tribunal is a tribunal against which a petition under Articles 226/227 would be maintainable. The non obstante clause in Section 5 of the Act does not apply in respect of exercise of powers under Article 227 which is a constitutional provision. For interference under Articles 226/227, there have to be exceptional circumstances. Though interference is permissible, unless and until the order is so perverse that it is patently lacking in inherent jurisdiction, the writ court would not interfere. Interference is permissible only if the order is completely perverse i.e. that the perversity must stare in the face.High Courts ought to discourage litigation which necessarily interfere with the arbitral process.
The court further referred to another judgment of the Delhi High Court in IDFC First Bank Limited Vs. Hitachi MGRM Net Limited (2023) it was held that while there is no doubt that a remedy under Articles 226 and 227 are available against the orders passed by the Arbitral Tribunal, such challenges are not to be entertained in each and every case and the court has to be “extremely circumspect”.
The court concluded that the impugned order is not liable to interfered with as the decision to deny the documents did not disclose any extreme perversity or illegality. Therefore, this case is not an exceptional case wherein the jurisdiction of this under article 227 can be pressed into service. Accordingly, the present petition was dismissed.
Case Title: DR. RAJAN JAISWAL v. M/S SRL LIMITED
Case Reference: CM(M) 3615/2024 & CM APPL. 60593-60594/2024
Court: Delhi High Court
Judgment Date: 15/10/2024
