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International Thermal v. Esteem Projects Pvt. Ltd
Factual and Procedural Background
The appellant is the defendant in Summary Suit No. 332 of 2003, where the plaintiff sued for recovery of an amount allegedly due under an order related to works of material supply and shop fabrication of steel work. Upon service of summons, the defendant entered appearance and filed a motion to refer the dispute to arbitration under section 8 of the Arbitration and Conciliation Act, 1996, relying on clause 14 of the general terms and conditions of purchase which mandated arbitration for unresolved disputes. The Single Judge dismissed the motion, holding that the defendant failed to prove that the general terms and conditions were agreed upon or formed part of the contract. The defendant then filed the present appeal challenging this dismissal. The respondent raised a preliminary objection regarding the maintainability of the appeal under section 37 of the Arbitration and Conciliation Act, 1996.
Legal Issues Presented
- Whether an appeal lies under section 37 of the Arbitration and Conciliation Act, 1996 against an order passed under section 8 of the same Act referring parties to arbitration.
- Whether the order dismissing the defendant’s motion to refer the dispute to arbitration is appealable.
- The scope and interpretation of section 37 regarding appealable orders under the Arbitration and Conciliation Act, 1996.
Arguments of the Parties
Respondent's Arguments
- The appeal is not maintainable as section 37 of the Arbitration and Conciliation Act, 1996 specifies a limited and exhaustive list of appealable orders, which does not include orders under section 8.
- Section 37 allows appeals only from orders granting or refusing measures under section 9, setting aside or refusing to set aside arbitral awards under section 34, accepting pleas of lack of jurisdiction under section 16, or granting or refusing interim measures under section 17.
- The phrase “and from no others” in section 37 explicitly excludes appeals from any other orders, including those under section 8.
- Reliance on the Punjab and Haryana High Court decision in Hind Samachar Limited v. Vijay Kumar Chopra, which held that appeals do not lie against section 8 orders as the list in section 37 is exhaustive.
- Further support from the Division Bench of this Court in State of Maharashtra v. Ramdas Construction Co., which held that appeals do not lie against orders rejecting applications for condonation of delay related to setting aside arbitral awards, reinforcing a strict construction of section 37.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Hind Samachar Limited, Jalandhar - Smt. Sudarshan Chopra and others v. Vijay Kumar Chopra and others, (2002) 4 Company Law Journal 1 | Strict and exhaustive interpretation of section 37 of the Arbitration Act, 1996, holding that appeals do not lie against orders under section 8. | The court relied on this authority to conclude that no appeal lies against an order under section 8 since it is not included in the exhaustive list of appealable orders under section 37. |
| State of Maharashtra and another v. Ramdas Construction Co. and another, 2006 (6) Mh.L.J. 678 | Strict construction of section 37 disallowing appeals against orders rejecting condonation of delay applications related to setting aside arbitral awards. | The court cited this decision to support the principle that only orders expressly specified in section 37 are appealable, reinforcing the non-appealability of the present order. |
Court's Reasoning and Analysis
The court analyzed section 37 of the Arbitration and Conciliation Act, 1996, which enumerates specific orders from which appeals are permissible. The court emphasized the phrase “and from no others,” indicating that the list is exhaustive and excludes any other orders. Since the order under challenge was passed under section 8, which is not among the appealable orders listed in section 37, the court concluded that no appeal lies against such an order. The court found support for this interpretation in authoritative precedents, including a Division Bench decision of the Punjab and Haryana High Court and a Division Bench of this Court, both of which adopted a strict construction approach to section 37. The court rejected the appellant’s challenge on maintainability grounds without delving into the merits of the underlying arbitration referral motion.
Holding and Implications
The court’s final decision is as follows:
The appeal is dismissed.
This decision directly affects the parties by upholding the dismissal of the defendant’s motion to refer the dispute to arbitration and confirms that no appeal lies against orders under section 8 of the Arbitration and Conciliation Act, 1996 as per section 37. The court did not establish any new precedent but reaffirmed existing jurisprudence regarding the non-appealability of section 8 orders.
Section 8 of the Arbitration and Conciliation Act 1996.
2. The appellant is a defendant in Summary Suit No.332 of 2003. Hereinafter, the parties are referred to as arrayed in the suit for the sake of convenience.
The plaintiff has sued the defendant for recovery of an amount allegedly due under an order for works of material supply and shop fabrication of steel work etc. On service of the writ of summons the defendant entered appearance and took out an motion for referring the parties to arbitration under section 8 of the Arbitration and Conciliation Act,1996. According to the defendant, clause 14 of the general terms and conditions of purchase requires that disputes which are not mutually resolved be referred to arbitration. The learned Single Judge came to the conclusion that the defendant failed to prove that the general terms and conditions of the purchase were never agreed between the parties or formed part of the contract and therefore, dismissed the motion.
Aggrieved thereby, the defendant has filed the present appeal. Ms Shah, the learned Counsel for the respondent raised a preliminary objection about the maintainability of this appeal. According to the learned Counsel for the respondent, the present appeal is against an order from which no appeal lies under section 37 of the Arbitration and Conciliation Act, 1996, which reads as follows:-
"Appealable orders.- (1) An appeal shall lie from the following orders (and from no others) to the Court authorised by law to to hear appeals from original decrees of the Court passing the order, namely:-
(a) granting or refusing to grant any measure under section 9;
(b) setting aside or refusing to set aside an arbitral award under section 34.
(2) An appeal shall also lie to a Court from an order granting of the arbitral tribunal.
(a) accepting the plea referred in sub-section (2) or sub-section (3) of section 16; or
(b) granting or refusing to grant an interim measure under section 17.
(3) No second appeal shall lie from an order passed in appeal under this Section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court.
On a plain construction of the provision it is clear that an appeal is provided only from the orders specified therein i.e. (a) granting or refusing to grant any measure under section 9 or setting or refusing to aside the arbitral award under section 34, (b) from an order accepting plea that the arbitral tribunal has no jurisdiction and (c) an order granting or refusing to grant an interim measure under section 17.
4. The words in parenthesis (and from no others), are equally important. These words are intended to remove any doubt that might arise about the maintainability of an appeal from any order other than those specified. The words emphasise that an appeal only lies from orders specified in the section and no others. The only thing that needs to be seen therefore is whether an appeal lies from an order under section 8 of the Arbitration and Conciliation Act, 1996. It is clear that an appeal is not provided under section 37.
an order which falls in any of the categories specified in section 37 and therefore is not appealable.
5. The view taken by us finds support in a decision of a Division Bench of the Punjab and Haryana High Court in the case of Hind Samachar Limited, Jalandhar - Smt. Sudarshan Chopra and others V. Vijay Kumar Chopra and others, reported in (2002) 4 Company Law Journal 1, pointed out igby Ms Shah, the learned Counsel for the respondent. The Division Bench of Punjab and Haryana High Court observed in para 36 as follows:-
"Having dealt with all issues canvassed by learned counsel, we now endeavour to draw conclusions based on our interpretation of section 37 of the Arbitration Act, 1996. In the absence of judicial precedent on the pointed issue, we will embark upon the controversy on first principles. We have already concluded above that even a remedy of appeal would not be available unless expressly provided for, while interpreting section 5 of the Arbitration Act, 1996. We have also concluded that the term "orders" referred in Section 37 of the Arbitration Act, 1996, refers to orders passed under Part I of the Arbitration Act, 1996. The question then is whether the remedy of appeal is excluded against an order passed by a "judicial authority" under section 8 of the Arbitration Act, 1996? In our view, it is. The reason for the aforesaid conclusion are the words 'and from no others' qualifying the word 'orders' it leaves no doubt that section 37 (1)) of the Arbitration Act, 1996, does not delineate an inclusive list of appealable order, but defines the exhaustive list of orders from which an appeal under the provisions of the Arbitration Act, 1996, is competent. Since the list is exhaustive, and since an order passed by a "judicial authority" under section 8 of the Arbitration Act, 1996, is not included therein, it would been enevitable to conclude that the remedy of appeal there from is expressly excluded."
6. Ms Shah further submitted that in the context of an appeal arising out of another kind of order the Division Bench of this Court construed the provisions strictly in State of Maharashtra and another V. Ramdas Construction Co. and another, reported in 2006 (6) Mh.L.J. 678. An appeal was preferred against an order refusing to condone the delay in making an application for setting aside the arbitral award. It was contended that since the appeal lay against an order setting aside or refusing to set aside the arbitral award, an appeal against an order is an application for condonation of delay in making such application for setting aside the award must be construed to be tenable. The Division Bench held that section 37 does not permit the appeal against the order rejecting an application for condonation of delay even if an order on the application for condonation of delay would result in an order on the application for setting aside an award against which an appeal is tenable. The Division Bench held that an order on an application for condonation of delay is not an appealable order. We are in respectful agreement with the view of the Division Bench.
7. We therefore, conclude that no appeal is provided for in section 37 of the Arbitration and Conciliation Act, 1996 against the order under section 8 of that act.
8. In the result the appeal is liable to be dismissed and is accordingly dismissed.
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