Court U/s 37 Arbitration Act Has No Jurisdiction To Remand The Matter To Same Arbitrator Unless Consented By Both Parties: Supreme Court

The Supreme Court observed that a Court, under Section 37 of the Arbitration and Conciliation Act, has no jurisdiction to remand the matter to the same Arbitrator unless it is so consented by both the parties.

The bench comprising Justices MR Shah and BV Nagarathna observed that only two options are available to the Court considering the appeal under Section 37 of the Arbitration Act. The High Court either may relegate the parties for fresh arbitration or to consider the appeal on merits on the basis of the material available on record within the scope and ambit of the jurisdiction under Section 37 of the Arbitration and Conciliation Act, the court said.

The bench, in this regard, referred to Kinnari Mullick and Anr. Vs. Ghanshyam Das Damani (2018) 11 SCC 328 and I-Pay Clearing Services Pvt. Ltd. Vs. ICICI Bank Ltd. (2022) SCC OnLine SC 4 [2022 LiveLaw (SC) 2 ]. In I-Pay Clearing Services Pvt. Ltd.

In this case, the Karnataka High Court set aside the award passed by the learned Arbitrator and has remanded the matter to the Arbitrator for fresh decision. One of the parties challenged this order before the Apex Court.

"The matter is remanded to the High Court to re-consider the appeals in accordance with law and on its own merits on other issues, if any, and to consider legality and validity of the award passed by the Arbitrator, of course, within limited jurisdiction available under Section 37 of the Arbitration Act.", the court said while setting aside the High Court order.

In Mutha Construction vs Strategic Brand Solutions (I) Pvt. Ltd. 2022 LiveLaw (SC) 163, the same bench had held that the principle that a court while deciding a petition under Section 34 of the Arbitration and Conciliation Act has no jurisdiction to remand the matter to the Arbitrator for a fresh decision is applicable only when the said petition is decided on merits. This principle is inapplicable when both the parties agreed to set aside the award and to remit the matter to the Arbitrator for fresh reasoned Award, it was held.

Head notes

Case name: Dr. A. Parthasarathy vs E Springs Avenues Pvt. Ltd | SLP (C) 1805-1806/2022 | 18 Feb 2022

Citation: 2022 LiveLaw (SC) 199 

Coram: Justices MR Shah and BV Nagarathna

Counsel: Sr. Adv Ritin Rai for appellants, Adv Vikas Mahendra for respondent