Court says Section 37(3) of the Arbitration Act bars only a second statutory appeal, not the High Court’s constitutional power under Articles 226 and 227
The Orissa High Court has ruled that writ petitions challenging orders passed by District Judges in appeals under Section 37(1) of the Arbitration and Conciliation Act, 1996 are maintainable, despite the statutory bar on a second appeal under Section 37(3).
Justice B.P. Routray, hearing a batch of writ petitions involving multiple parties, said the Arbitration Act is indeed a self-contained code and Section 37 provides the final statutory remedy, except for an appeal to the Supreme Court. However, the Court clarified that the constitutional jurisdiction of the High Court under Articles 226 and 227 cannot be taken away by parliamentary legislation.
The petitions arose from orders passed by the District Judge acting as the Commercial Appellate Court under Section 37(1), after arbitral awards had first been challenged under Section 34 before the Commercial Court. The opposite parties had raised a preliminary objection, arguing that the writ petitions were not maintainable because entertaining them would amount to allowing a second appeal, which is expressly barred by Section 37(3).
Rejecting this objection, the Court held that a writ petition under Article 226 or a supervisory petition under Article 227 is not an appellate remedy. The High Court emphasized that while such petitions can be entertained, interference must be exercised very sparingly and only in exceptional cases involving patent lack of jurisdiction, manifest illegality, perversity, or violation of natural justice.
The Court relied on several Supreme Court precedents, including Deep Industries Ltd. v. ONGC, Bhaben Construction v. Sardar Sarovar Narmada Nigam Ltd., and recent Supreme Court orders in National Aluminum Company Ltd. and United India Insurance Company Ltd., which had granted liberty to parties to approach the High Court under Articles 226 and 227 in similar arbitration matters.
In particular, the High Court noted that the Supreme Court had recently recognized the availability of constitutional remedies even where the Arbitration Act bars further statutory appeals. According to the Orissa High Court, this reinforced the position that Section 37(3) cannot be read as excluding writ jurisdiction.
At the same time, the Court made it clear that it had not examined the merits of the individual disputes. All factual and legal questions in the connected cases were left open for consideration by the regular assigned Bench. The matters have been listed for further hearing on 5 October 2026, and interim orders passed earlier will continue until then.
Bottom Line :
Arbitration and Conciliation Act, 1996 - Bar of second appeal under Section 37(3) does not oust constitutional jurisdiction of High Court under Articles 226 and 227 - Writ petitions challenging orders passed by District Judge in appeal under Section 37(1) are maintainable, though interference must be exercised very sparingly and only in cases of patent lack of jurisdiction, manifest illegality or perversity.
Statutory provision(s): Section 5, Section 37(1), Section 37(3) of the Arbitration and Conciliation Act, 1996, Articles 226 and 227 of the Constitution of India, 1950
State of Odisha v. M/s. Dhanurdhar Champatiray, (Orissa) : Law Finder Doc id # 2982883
