While arbitration aims for a conclusive resolution through arbitral awards, the Arbitration and Conciliation Act, 1996 (the "Act"), carves out specific pathways for judicial intervention via appeals against particular court orders. Section 37 acts as a carefully calibrated mechanism, offering recourse in defined scenarios where a court's decision warrants appellate scrutiny.

Appealable Court Orders Under Section 37(1) - Statutory Exceptions to Finality:

Section 37(1) explicitly enumerates the court orders that are amenable to appeal, overriding any conflicting legal provisions. These exceptions are:

• Refusal to Refer to Arbitration (Section 8): An appeal is permissible when a court declines to direct parties to arbitration despite the existence of a valid arbitration agreement, thereby impeding the arbitral process at its inception.
• Grant or Refusal of Interim Relief (Section 9): Decisions concerning provisional measures aimed at protecting the subject matter of the dispute (e.g., injunctions, asset preservation orders) are appealable, recognizing the potential impact of such orders on the parties' rights during the pendency of arbitration.
• Setting Aside or Refusal to Set Aside an Award (Section 34): Judgments either upholding or rejecting challenges to the validity of an arbitral award are subject to appeal. Notably, appeals under Section 37 frequently stem from decisions made under Section 34, making it a crucial juncture for appellate intervention.

Judicial Interpretation - Defining the Contours of Appellate Review:

The judiciary has played a significant role in shaping the scope and limitations of Section 37 appeals:

• Circumscribed Scope of Review: In Punjab State Civil Supplies Corporation Ltd. v. Ramesh Kumar and Co., the Supreme Court held that appellate review under Section 37 is confined to examining the legality and correctness of the Section 34 order itself, not the merits of the underlying arbitral decision.
• Introduction of New Grounds: In State of Chhattisgarh v. Sal Udyog Private Limited, the Court held that new grounds—such as "patent illegality"—can be introduced during a Section 37 appeal, even if not raised under Section 34 initially.

Jurisdictional Hierarchy for Section 37 Appeals:

• Order by a Single Judge of a High Court: Appeal lies to a Division Bench of the same High Court.
• Order by a District Court or a Single Judge in original jurisdiction: Appeal lies to the High Court.
• Order by a Division Bench of a High Court in a first appeal: Further appeal lies only to the Supreme Court under Article 136, as Section 37(3) bars a second statutory appeal.

Further Judicial Interpretations - Refining Scope and Timelines:

• Exclusion of Merits: In Haryana Tourism Limited v. M/s Kandhari Beverages Limited, the Court reaffirmed that merits of the arbitration cannot be revisited under Section 37.
• Appealability of Delay Refusal: In Chintels India Ltd v. Bhayana Builders Pvt Ltd, the refusal to condone delay in filing a Section 34 application was held appealable under Section 37.
• Stipulated Limitation Period: The Court in Union of India v. Varindera Constructions Ltd. and N.V. International v. State of Assam fixed a 120-day deadline for filing appeals under Section 37, with no further extension. However, in M.P. Poorv Kshetra Vidyut Vitran Co. Ltd. v. Swastik Wires, the MP High Court diverged, illustrating regional variation.

Appealable Orders of the Arbitral Tribunal (Section 37(2)):

• Accepting a Plea on Jurisdiction (Sections 16(2) & (3)): Appeal is allowed if the tribunal rules that it has jurisdiction.
• Grant or Refusal of Interim Measures (Section 17): Tribunal decisions on interim relief are also appealable, paralleling court powers under Section 9.

Bar on Second Appeal (Section 37(3)):

Section 37(3) explicitly prohibits a second appeal against an order made in a first appeal under Section 37. This ensures limited judicial interference in arbitration, except via the Supreme Court under Article 136.

Limitation Period for Filing Appeals - The Role of the Limitation Act:

Though the Arbitration Act is silent on time limits, the Limitation Act, 1963 applies:

• Appeals from a lower court to a High Court: Governed by Article 116 – 90 days.
• Intra-High Court appeals: Governed by Article 117 – 30 days.

Impact of the Commercial Courts Act, 2015:

Section 13(1A) of the Commercial Courts Act imposes a 60-day limitation for filing appeals under Section 37 in commercial disputes. This promotes faster resolution and enforcement of arbitral awards.
Conclusion - A Carefully Circumscribed Right to Appeal:
Section 37 of the Arbitration and Conciliation Act, 1996, provides a limited yet crucial avenue for appeal against specific court and tribunal orders in arbitration proceedings. It encompasses appeals against refusals to refer to arbitration, decisions on interim relief, and rulings on the setting aside of arbitral awards. Judicial interpretations have further refined the scope of this appellate review, emphasizing its focus on the legality of the underlying order rather than a re-examination of the merits.

While the Limitation Act, 1963, generally governs the timelines for filing these appeals, the Commercial Courts Act, 2015, introduces a shorter 60-day period for commercial disputes. Parties must be acutely aware of these timelines to avoid their appeals being time-barred, highlighting the importance of diligent and timely action within the statutory framework of arbitration.

Written By: Md.Imran Wahab, IPS, IGP, Provisioning, West Bengal
Email: [email protected], Ph no: 9836576565