2020 Supreme(Guj) 506

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Biren Vaishnav, J.
M/s Samrat Furnaces Pvt. Ltd. – Petitioner
Versus
State of Gujarat – Respondent
R/Special Civil Application No.7006 of 2020
Decided On : 29-06-2020

Point of Law:
Order of the arbitral tribunal rejecting his preliminary contention is an order on an application filed by the claimant and since the order is without jurisdiction, a writ petition under Article 226 of the Constitution of India is maintainable.

Headnote:

Constitution of India, 1950 – Article 226 – Arbitration and Conciliation – Award – Challenging the order passed by the sole arbitrator by which the petitioner’s application raising certain preliminary objections before the arbitrator is rejected. The petitioner is the original respondent before the arbitrator and the respondent No.5 is the original claimant – Held, order passed by the Arbitration Tribunal during the course of Arbitration cannot be challenged by the petitioner under Articles 226 and/or 227 of the Constitution of India when the constitution bench of the Apex Court in case of M/s. S.B.P. and Co. v. M/s. Patel Engineering Ltd. and Anr. (supra) has disapproved the stand that any order passed by the Arbitral Tribunal is capable of being corrected by the High Court under Articles 226 and 227 of the Constitution of India and has categorically held that such intervention by the High Court is not permissible. The Apex Court in case of M/s. Deep Industries Limited v. Oil and Natural Gas Corporation (supra) has held that it is also important to notice that the seven Judge Bench has referred to the object of the Act being that of minimizing judicial intervention and that this important object should always be kept in the forefront when a 227 petition is being disposed of against proceedings that are decided under the Act,1996 and that the policy of the Act is speedy disposal of arbitration cases as the Act,1996 is 'self-contained' Code and deals with all the cases – Need not extensively refer to these written submissions which have extensively been filed referring various other judgments, in view of the fact that in a nut shell, these were the contentions raised by the learned counsels who appeared before the Arbitrator – Order accordingly.

Facts of the case:

Respondent No.5 - Ketan Engineering Services Pvt. Ltd. has filed an application u/S.18(1) of the Micro Small and Medium Enterprises and Development Act, 2006 before the MSME Commissionerate, Gandhinagar. The application pertains to certain contractual obligations inter se between the claimant, respondent No.5 and the petitioner M/s.Samrat Furnaces Pvt. Ltd. According to the claimant, a work order was executed on 9.12.2010 by which the petitioner had placed an order for fabrication and erection of 250 MT and 300 MT furnaces at M/s. L & T Special Steels and Heavy Forgings Pvt. Ltd., Hajira. The petitioner illegally terminated the order. The case of the respondent No.5 claimant before the arbitral tribunal is that the petitioner has to pay certain outstanding amount. It is in this context, an application u/S.18 raising a claim is filed by the respondent No.5 before the arbitrator. To this application for claim by the respondent No.5, on conciliation having failed, the petitioner filed an application raising several preliminary objections which, the arbitral tribunal impugned award/order has rejected. The petition is filed challenging the same.

Findings of the court:

Order passed by the Arbitration Tribunal during the course of Arbitration cannot be challenged by the petitioner under Articles 226 and/or 227 of the Constitution of India when the constitution bench of the Apex Court in case of M/s. S.B.P. and Co. v. M/s. Patel Engineering Ltd. and Anr. (supra) has disapproved the stand that any order passed by the Arbitral Tribunal is capable of being corrected by the High Court under Articles 226 and 227 of the Constitution of India and has categorically held that such intervention by the High Court is not permissible. The Apex Court in case of M/s. Deep Industries Limited v. Oil and Natural Gas Corporation (supra) has held that it is also important to notice that the seven Judge Bench has referred to the object of the Act being that of minimizing judicial intervention and that this important object should always be kept in the forefront when a 227 petition is being disposed of against proceedings that are decided under the Act,1996 and that the policy of the Act is speedy disposal of arbitration cases as the Act,1996 is 'self-contained' Code and deals with all the cases – Need not extensively refer to these written submissions which have extensively been filed referring various other judgments, in view of the fact that in a nut shell, these were the contentions raised by the learned counsels who appeared before the Arbitrator.

Result: Order accordingly