The court ruled that appeals under Section 37 of the Arbitration and Conciliation Act do not apply to procedural orders during pending arbitration challenges.
In a significant ruling, the Gauhati High Court has dismissed an appeal filed by the National Highways Authority of India (NHAI) challenging a lower court's order to release Rs. 73,27,009 to respondent Rajib Boruah. The court held that the appeal was not maintainable under Section 37 of the Arbitration and Conciliation Act, 1996, as the order in question was a procedural one during pending Section 34 proceedings and not a final adjudication.
The case originated from the acquisition of land owned by Rajib Boruah for the widening of a National Highway. Dissatisfied with the initial compensation, Boruah sought arbitration, resulting in an enhanced compensation award of Rs. 73,27,009. The NHAI challenged the procedural order allowing the release of this amount, arguing that it amounted to a final order and was self-contradictory given the pending challenge to the award.
Presiding judge Mr. Robin Phukan clarified that under Section 37, appeals are restricted to specific orders, such as those refusing to refer parties to arbitration or setting aside an arbitral award. The court emphasized that the order to release the compensation was interlocutory and procedural, thus not appealable under the prescribed legal framework.
The court's decision highlighted that the appellant's remedy lies in seeking modification or review of the order within the same court, or through a revision petition under Section 115 of the Civil Procedure Code or a writ petition under Article 227 of the Indian Constitution.
In its analysis, the court reiterated precedents from the Supreme Court, including the case of MMTC Ltd. v. Vedanta Ltd., underscoring the limited scope of appellate jurisdiction under Section 37, which does not extend to re-evaluating the merits of an award but only to checking compliance with Section 34 grounds.
Ultimately, the Gauhati High Court granted the NHAI the liberty to pursue alternative legal remedies but dismissed the appeal due to lack of maintainability under the current statutory provisions.
Bottom line:-
Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 is not maintainable against an interlocutory or procedural order passed in pending Section 34 proceedings, such as an order allowing release of deposited sums.
Statutory provision(s): Arbitration and Conciliation Act, 1996 - Sections 34, 37; Civil Procedure Code, 1908 - Section 115; Constitution of India - Article 227.
The National Highways Authority of India v. Rajib Boruah, (Gauhati) : Law Finder Doc id # 2933164
