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: Filing Appeal Against Final Arbitral Award Under Section 37 Is Not Maintainable
A Division Bench of the at Madurai has firmly reiterated that a final arbitral award cannot be appealed under —it must be challenged under Section 34. The Court also ordered the refund of court fees paid for the improperly filed appeal, holding that such collection would otherwise lead to .
When a Procedural Shortcut Backfires
J. Murugavel, a resident of Cuddalore, had a dispute with Pichai, proprietor of based in Dindigul. An arbitrator passed a final award on . Instead of filing a petition to set aside the award under —the only statutory route available—Murugavel's counsel chose to file an appeal under Section 37(2) of the same Act before the .
The Bench, comprising Justice G.R. Swaminathan and Justice K.K. Ramakrishnan, was quick to spot the error.
"What is listed before us is an arbitration appeal filed under
. But the challenge is to an arbitral award. Section 37 of the said Act catalogues what are appealable orders. The final award passed by an arbitrator is not appealable,"
the Court noted in its judgment dated
.
A Sorry State of Affairs
The Court expressed dismay that not only was the appeal filed incorrectly, but the Registry had also numbered it.
"Unfortunately, this appeal came to be filed and what is worse, it was numbered also. Since it is
not maintainable, it stands closed as not-maintainable,"
the Bench observed, before granting Murugavel liberty to pursue the correct remedy.
The Battle for Refund
At this stage,
, appearing for the petitioner, pleaded that the court fee paid by the litigant be refunded. The Court examined this request under
, which mandates that
"the fee paid by mistake or
shall be ordered to be refunded."
The Court noted the mandatory language of the provision, emphasising that the word "shall" casts a duty on the court to order refund when the statutory requirements are met. However, the Court also confronted a Full Bench decision in The Official Receiver, Coimbatore v. S.A. Ramaswamy [(1980) 93 LW 468], which rejected refund of court fees for a that was incompetent due to . In that case, the litigant had conceded that Section 70 did not apply.
Includes
The Division Bench found a way around the Full Bench by focusing on the meaning of "." It cited the decision of Justice V. Ratnam in N. Rangaswamy Naidu v. Narayanan Naicker (CRP No. 913 of 1980), who defined "" as 'an unintentional act or omission as distinguished from an intentional act or omission; "careless" or "negligent"; opposite of deliberate action and that doer never really meant to do what he did and he was not aware of what he was doing.'
Critically, the Court relied on the decision in Finch v. Richardson [(2009) 1 WLR 1338], which held that acts done out of can be characterised as "inadvertent." Applying this, the concluded that Murugavel's filing under an incorrect provision of law squarely fell within Section 70.
"We are clearly of the view that this appeal has been filed without properly understanding the scope of
. This certainly amounts to '
' within the meaning of
,"
the Bench declared.
The Spirit of Article 265
Beyond the technical reading of Section 70, the Court invoked the principle underlying , which forbids the collection of tax without the authority of law. Even though court fees are not considered taxes, the Court reasoned that any improper or illegal collection of court fees cannot be justified.
"When an arbitration appeal against a final award will not lie before the High Court under Section 37 of the 1996 Act, the acceptance of court-fee paid therefor is without the authority of law. This is one more reason for ordering refund. If refund is not ordered, there would be
for the State,"
the Court observed.
The Bench also applied concepts from contract law, describing litigants as "." It noted that when a matter cannot be adjudicated because it was not maintainable in the first instance, the litigant receives no service in return for the court fee paid, resulting in a "."
What Was Ordered
The High Court closed the arbitration appeal as not maintainable. It directed the Registry to refund the court fee paid by the appellant
"forthwith and without any delay."
Murugavel was granted liberty to pursue his remedy in accordance with law, and the time spent prosecuting this defective appeal was directed to be excluded while computing the period of limitation. No costs were imposed.
Case Title:
Case No.:
Arb Appeal(MD) No. 63 of 2026
Bench:
Justice G.R. Swaminathan and Justice K.K. Ramakrishnan
Date of Judgment:
