An arbitrator's preliminary order determining a factual issue does not qualify as an interim award under Section 34 of the Arbitration and Conciliation Act, thus is not appealable in this context.

JUDGMENT :

VIJAYKUMAR A. PATIL, J.

This appeal is filed under Section 13 (1A) of the Commercial Courts Act, 2015, challenging the order dated 01.07.2024 passed by LXXXVII Additional City Civil and Sessions Judge (CCH-88 Commercial Court), Bengaluru, in Com.A.P.No.53/2022.

2. Sri.Lakshmikantha K.B., learned counsel appearing for the appellant submits that the dispute between the appellant and the respondent is before the Arbitrator. It is submitted that the appellant has filed a claim petition wherein the respondent has filed objections stating that Mr.Mohammad Shoaib is not authorized to execute the agreements on behalf of the respondent- Company. It is further submitted that the Arbitrator considered the said objections and has framed the preliminary issue and answered the said issue in favour of the claimant. Being aggrieved, the respondent filed an application for setting aside the order. It is also submitted that the Commercial Court, under the impugned order allowed the application by setting aside the order dated 20.04.2022. It is contended that the application filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act'), is not maintainable as the order impugned before it was not the award. Hence, he seeks to allow the appeal.

3. Per contra, Sri.Vishnu Hegde, learned counsel for the respondent supports the impugned order of the Commercial Court and submits that under Section 34 of the Act, the Commercial Court has jurisdiction to consider the order passed by the Arbitrator at the interlocutory stage. In support of his contention, he placed reliance on the decision of the Bombay High Court in the case of URBAN INFRASTRUCUTURE REAL ESTATE FUND Vs. NEELKANTH REALITY PRIVATE LTD. AND ORS. , Com.A.No.37/2020 dt. 02.04.25 and NATIONAL INSURANCE COMPANY LIMITED Vs. BOGHARA POLYFAB PRIVATE LIMITED , (2009) 1 SCC 267 . Hence, he seeks to dismiss the appeal.

4. We have heard the arguments of the learned counsel for the appellant, the learned counsel for respondent and meticulously perused the material available on record. We have given our anxious consideration to the submissions advanced on both sides.

5. The appellant and the respondent entered into agreements dated 14.06.2018 and 27.06.2018. The respondent issued a Cheque duly signed by their Marketing Director-Mr.Mohammad Shoaib. The said Cheque was returned with endorsement 'funds insufficient'. The appellant filed CMP No.443/2019 seeking prayer to refer the matter to the Arbitrator. This Court appointed the Arbitrator and further ordered the Arbitrator to decide the issue with regard to the maintainability of the claim petition as to whether Mr.Mohammad Shoaib is authorized to enter into an agreement or not. The learned Arbitrator answered the preliminary issue vide order dated 20.04.2022 in favour of the appellant-claimant. The respondent assailed the order of the Arbitrator under Section 34 of the Act. The Commercial Court, under the impugned order set aside the order dated 20.04.2022 of the learned Arbitrator. Being aggrieved, the claimant has filed this appeal.

6. The short issue which arises for consideration in this appeal is whether the order dated 20.04.2022 passed by the learned Arbitrator is an award or an interim award and the same can be challenged under Section 34 of the Act. It is not in dispute that the learned Arbitrator vide order dated 20.04.2022 has considered the preliminary issue as to whether Mr.Mohammad Shoaib is authorized to enter into an agreement or not and the said issue is answered in favour of the