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Synopsis

The Delhi High Court while dismissing a petition challenging an Arbitrator's order on an amendment application held that every interlocutory order of the arbitral tribunal is not an interim award that can be challenged under Section 34 of the Arbitration and Conciliation Act, 1996 (A&C Act). A Bench of Justice Prateek Jalan, held that Section 23(3) of the Arbitration & Conciliation Act, 1996 (A&C Act) gives the Arbitrator discretion to reject a late amendment application, and such an order cannot be challenged under Section 34 of the A&C Act.

It noted that the factors that cloth the orders of the Arbitral Tribunal’s order with the quality of finality make them vulnerable to challenge as interim awards under Section 34 of the A&C Act.

The petitioner originally filed a suit against three defendants, the respondent being the main defendant and the other two being pro forma defendants. The suit, along with five other suits pending in the High Court were referred to arbitration before a former Judge by an order of November 7, 2016.

In the arbitral proceedings between the parties, the arbitrator had taken up six proceedings. The petitioner sought a decree of declaration declaring the Sale Deed dated July 28, 2010, obtained by the Respondent from the Petitioner void and canceled in the suit.

Petitioner also sought for a decree directing the Respondent to recover/transfer title to the Petitioner of the property in dispute. While the respondent objected to the amendment, and the arbitrator denied the application for amendment in the impugned order dated November 4, 2019, under Section 23(3) of the A&C Act, the application was denied as it was filed late in 2017 and was not pursued until November 4, 2019. However, the arbitrator stated in the impugned order "expression of any view herein will not be treated as an expression on the merits of the case."

The respondent represented by Advocate Siddharth Batra raised a preliminary objection to the petition's maintainability under Section 34 of the A&C Act, directed against an arbitrator's order rejecting an application for amendment. Batra argued that an interim interlocutory order lacks the trappings of an interim award as defined by Section 2(1)(c) of the A&C Act and thus cannot be heard by the High Court under Section 34.

The Court emphasized on Container Corporation, M/s Cinevistaas Ltd v. M/s Prasar Bharti and Lt. Col. H.S. Bedi Retd,  wherein it observed that the Tribunal dismissed the application having regard to the gross delay in making the application and such an order cannot be termed as an interim award amenable to challenge under Section 34. 

On the contrary, the Court concluded that the orders challenged in the aforementioned judgments had reached finality and were thus maintainable under Section 34 of the Act, and the rejection of the amendments constituted final adjudication of the proposed claims and defences.

Considering the facts of the present matter, Court noted that the arbitrator proceeded solely on the basis that the amendment was requested late and did not rule on the merits of the case. Thus, the challenged order dated November 4, 2019, was not an interim award.

The Court thus stated, “I am of the view that the impugned order in the present case does not constitute an interim award, susceptible to challenge under Section 34 of the Act.”

Accordingly, the court dismissed the petition as not maintainable.

Case Title: Punita Bharadwaj v. Rashmi Juneja