The right to prefer an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 arises only when an order sets aside or refuses to set aside an arbitral award, and not when certain grounds for challenge are restricted at the initial stage.

JUDGMENT :

Sanjib Banerjee, C.J.

1. A limited question is involved in this matter pertaining to the maintainability of the appeal.

2. By the order impugned, certain grounds taken to challenge a arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996 have been disregarded and notice has been issued on limited grounds rather than the full gamut of the challenge to the award as designed by the appellant herein. The undisputed position is that the order impugned did not have the effect of rejecting the challenge to the award, either wholly or in part.

3. Section 37 of the Act provides for the orders under the Act from which appeals may be carried. Section 37(1)(c) reads thus:

"setting aside or refusing to set aside an arbitral award under Section 34".

4. Thus, it is the setting aside or refusing to set aside an arbitral award on which hinges the right to prefer an appeal from the relevant order.

5. An arbitral award may be made under different heads. It is possible that the grounds furnished in the award in support of certain heads find favour with the Arbitration Court while receiving a petition under Section 34 of the Act and, even at such initial stage, the Court does not permit other heads to be challenged in view of the completeness of the award in such regard or the absence of any ground to detract therefrom. It is akin to a situation where the Arbitration Court may stay the operation of a part of the award, conditionally or unconditionally, and not stay the operation of another part of the order. In such a scenario, where the arbitral award comprises several heads and the challenge to certain heads are not entertained or irreversibly repelled, there would be a refusal to set aside such heads in the award and, as such, a right of appeal will immediately accrue to the award-debtor. However, the matter is completely different when divers grounds are carried to challenge an award and some of such grounds are not entertained and the scope of the challenge is restricted to certain grounds. In such a scenario, there is no refusal to set aside the award, so as to say, in terms of Section 37 of the Act; but only a refusal to entertain certain grounds. The two scenarios are completely different. In one case, a part of the award ttains finality upon the challenge thereto being rejected which immediately triggers off the right to appeal under Section 37 of the Act. In the second case, no decision is made as to the validity of the award, but only certain grounds urged to question the correctness of the award are negated. In the second case, it will be open to the award-debtor to resurrect the grounds negated at the initial stage in course of an appeal in the event the award-debtor is aggrieved by the final order passed in the proceedings under Section 34 of the award.

6. The test appears to be whether any part of the arbitral award becomes enforceable. If, as a result of the Court repelling a challenge to a part of the award even at the initial stage, such part of the award becomes enforceable, the award-debtor is entitled to prefer an appeal therefrom as the order of the Arbitration Court amounts to refusing to set aside such part of the award and immediately gives rise to a right of appeal in such regard.

7. The matter may be seen from another perspective. It is equally possible that immediately upon receipt of a challenge to an award, the Arbitral Court discovers a part of the award to be demurrable and sets it aside. Such act and the resultant order in such regard permits an appeal to be carried therefrom by the award-holder on the ground that such part of the award has been set aside. Indeed, in either case, when a part of the award is set aside or a part of the award is conclusively refused to be set aside, the right to prefer an appeal will accrue immediately and the clock of limitation would start to run in respect of such part of the award. As a consequence, the party aggrieved may not be permitted to await the f