IMPORTANT POINT
The court established that appeals under Section 37 of the Arbitration Act have distinct parameters from those under Section 34, and the principle of res judicata applies to prevent re-litigation of previously decided issues.

JUDGMENT :

Sabyasachi Bhattacharyya, J.

1. The present challenge under section 37 of the Arbitration and Conciliation Act, 1996 has been preferred against an interim order passed by the learned Arbitrator under Section 17 of the said Act, directing the respondents/appellants to set apart a sum of rupees 6,41,73,413/- in a separate account till final adjudication of the arbitral reference.

2. The arbitral proceeding has been initiated by respondent no.1, one of the partners of a Limited Liability Partnership (LLP), the proforma respondent herein, against the other partners, who are the appellants before this Court.

3. One of the reliefs sought in the statement of claim was induction of the claimant/responder no.1 as a partner in the LLP, which has been rendered infructuous in view of such induction having taken place in the meantime.

4. The claimant has sought a further award setting aside the financial statement for the financial years 2019-2020 and 2020-2021, prepared and adopted by the present appellants allegedly without representation of the 33.4% shares of the deceased father of the claimant, who was originally a partner in the LLP.

5. Other consequential reliefs were also sought.

6. Two separate appeals were filed under Section 37, one by the LLP and the present by the respondents in the arbitral proceeding, that is, the other partners than the claimant.

7. The LLP’s appeal bearing APO 65 of 2023 was dismissed by a judgment and order dated November 24, 2023, passed by a co-ordinate Bench of this Court. In the said appeal, the present appellants were impleaded as respondents.

8. Learned Counsel for the petitioners argues that the said judgment does not debar the appellants from moving the present challenge. It is argued that the other appeal bearing APO 65 of 2023 was preferred by the LLP, which is a separate juristic entity under the Limited Liability Partnership Act, 2008 (for short, “the LLP Act”).

9. It is further argued that the provisions of Order XLI Rule 22 of the Code of Civil Procedure (CPC), are not applicable in a challenge under Section 37 of the 1996 Act.

10. In support of such submission, Learned Counsel cites Mahanagar Telephone Nigam Limited vs. Applied Electronics Limited reported at (2017) 2 SCC 37, where the Supreme Court held that the provisions of the Code of Civil Procedure are not applicable to a challenge under the 1996 Act. It was observed that the respondents in an appeal under Section 37 can challenge an award only by way of a separate Section 37 appeal and that the provisions of Order XLI Rule 22 do not apply; as such, no cross objection can be filed by the respondent in a Section 37 proceeding.

11. While holding so, the Supreme Court considered its previous judgment in the matter of ITI Ltd. v. Siemens Public Communications Network Ltd. reported at (2002) 5 SCC 510, where it was held that the provisions of the Code of Civil Procedure are applicable to a challenge under Section 37 of the 1996 Act. In Mahanagar (supra), the Supreme Court doubted its previous judgment and referred the question to a larger Bench. It is submitted by Counsel that the larger Bench reference is yet to be answered.

12. Thus, it is contended that it is open for this Court to take up the challenge against the impugned interim order on all grounds, irrespective of the dismissal of the previous appeal by the LLP.

13. It is further submitted by the appellants that the coordinate Bench, while adjudicating the previous appeal, was aware of the existence of the present appeal and also noted the same in its orders. Thus, it was well within the knowledge of the court that the said appeal was distinct and different from the present appeal, having been filed by the LLP in its independent capacity and not on behalf of the partners individually.

14. Learned Counsel next contends that the strict yardsticks applicable in an application under Section 34 of the 1996 Act are not applicable to an appeal under Section 37.

15. It is submitted that in the