IMPORTANT POINT
Appeal against arbitral award – It will be unjust to set aside award only on the ground of failure of appellant to take recourse to another Act.

JUDGMENT :

ABHAY S. OKA, J.

FACTUAL ASPECTS

1. The appellant was appointed as a contractor to construct a minor bridge. The contract was granted by the first respondent–State of Madhya Pradesh. The second respondent, Executive Engineer, National Highway Division Sagar, Madhya Pradesh, rescinded the contract by the letter dated 9th November 2001. Clause 29 in the work order incorporated an arbitration clause. The appellant requested for constitution of an Arbitral Board. The said request was rejected. Even the subsequent representation was rejected. Therefore, the appellant applied for a reference to the Madhya Pradesh Arbitration Tribunal, Bhopal (for short, ‘the Arbitration Tribunal’) in accordance with Section 7 of the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 (for short, ‘the 1983 Act’). By the order dated 19th April 2010, the Arbitration Tribunal concluded that as there was an arbitration clause in the contract, the provisions of the Arbitration and Conciliation Act, 1996 (for short, ‘the Arbitration Act’) would apply. The Tribunal held that only when there is no arbitration clause, the provisions of the 1983 Act would apply. In view of this order, the appellant filed a petition under Section 11(6) of the Arbitration Act before the High Court of Madhya Pradesh at Jabalpur. The petition was allowed, and a retired District Judge was appointed as the Arbitrator. An award was made on 25th April 2014 by the learned Arbitrator.

2. The respondents, aggrieved by the said award, preferred a petition under Section 34 of the Arbitration Act before the District Judge, Jabalpur. The learned District Judge dismissed the said petition. The respondents filed an appeal under Section 37 of the Arbitration Act before the High Court for challenging the order of the District Court. By the impugned judgment, the High Court proceeded to set aside the award only on the ground that as held by this Court in the case of Madhya Pradesh Rural Road Development Authority & Anr. v. L. G. Chaudhary Engineers and Contractors, (2018) 10 SCC 826, the provisions of the 1983 Act were applicable.

SUBMISSIONS

3. The learned counsel appearing for the appellant invited our attention to the fact that the decision in the case of Madhya Pradesh Rural Road Development Authority was rendered nearly four years after the date of the award. However, in paragraph 17 of the said decision, this Court observed that if an award is already made by the Arbitrator and if the objection to the jurisdiction of the Arbitrator was not raised at an appropriate stage, the award may not be annulled only on that ground. The learned counsel submitted that the respondents did not challenge the order passed by the High Court under Section 11(6) of the Arbitration Act. The objection regarding the jurisdiction of the arbitration was raised only in the written submissions. He would, therefore, submit that the award could not have been set aside based on the decision of this Court.

4. The learned counsel appearing for the respondents submitted that, as seen from the award, a contention was raised in the written statement filed before the Arbitrator that the appellant should have taken recourse to Section 7 of the 1983 Act. Therefore, the dispute was raised at the appropriate stage, and hence, paragraph 17 of the decision in the case of Madhya Pradesh Rural Road Development Authority will have no application.

CONSIDERATION OF SUBMISSIONS

5. A few factual aspects will have to be noted. After the contract granted to the appellant was rescinded, the appellant invoked Section 7 of the 1983 Act by approaching the Arbitration Tribunal. By the order dated 19th April 2010, the Arbitration Tribunal held that in view of the arbitration clause in the contract, the 1983 Act will have no application and the appellant will have to take recourse to the Arbitration Act. In view of this order, the appellant invoked the jurisdiction of the High Court under Section 11(6) of the Arbitration Act by filing a petitio