DR.

RAM MANOHAR LOHIA NATIONAL LAW

UNIVERSITY, LUCKNOW

ALTERNATE DISPUTE RESOLUTION LAW

FINAL DRAFT
On

Appeal under Section - 37 of the Arbitration and Conciliation,

1996
Under The Guidance of: Submitted By:

Mr. Kirti Singh Abhishek Kumar Singh

Assistant Professor (Law) Roll No. 130101004, Section B

VIII Sem, Batch 2014-19

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Contents
Scope of the Section................................................................................................................................ 3
Appeals under 1940 Act.......................................................................................................................... 3
Appealable order ................................................................................................................................. 3
Non -Appealable orders ...................................................................................................................... 4
Appealable Order under 1996 Act .......................................................................................................... 5
No Appeal against Consent Order .......................................................................................................... 5
Power of Appellate Court ....................................................................................................................... 6
No direct appeal from order of remission of award ................................................................................ 7
Second Appeal and revision application ................................................................................................. 7
No appeals lie on letter patents order ...................................................................................................... 8
Conclusion ............................................................................................................................................... 9
Bibliography .......................................................................................................................................... 10
BOOKS ................................................................................................................................................ 10
Websites ........................................................................................................................................... 10

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Scope of the Section
As per the statutory provision of the Arbitration and Conciliation Act, 1996 clearly talks about
the aspect regarding the entertaining appeals under certain orders. It says that-

Section 37 - Appealable orders - (1) an appeal shall lie from the following orders (and from
no others) to the Court authorised by law to hear appeals from original decrees of the Court
passing the order, namely: ---

a) Refusing to refer the parties to arbitration under section 8;

b) Granting or refusing to grant any measure under section 9:
c) Setting aside or refusing to set aside an arbitral award under section 34.

(2) Appeal shall also lie to a court from an order of the arbitral tribunal----

a) Accepting the plea referred to 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 taken away any right to appeal to the Supreme Court.

Appeals under 1940 Act

An appeal lies from the following orders passed under the arbitration and conciliation Act,
1940 to the court authorised by law to hear appeals from original decree of the court passing
the order.

Appealable order
There is following appealable order namely -

1. Superseding an arbitration
2. On an award stated in the form of an special case
3. Modifying or correcting an award
4. Filing or refusing to file an arbitration agreement,
5. Staying or refusing to stay legal proceeding where there is an arbitration agreement and
6. Setting aside an award

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An application lies against such orders even if they have been incorporated in the decree. No
appeals lies from a decree passed with the consent of parties and also no appeals lies against
any order passed by a small court.

The word “to the court authorised by law to hear appeals from original decrees” prescribed the
forum from appeal. An appeal under section 37 shall lie to the same court to which appeals lies
from the original decrees. The section prescribes the forum for appeal but does not impose any
further limitations1. While considering the provision of the section 39(1) and section 17 of the
Act of 1940, the SC in Essar Construction v. M.P. Ramakrishna Reddy2the court held that “it
is evident that the word ‘refusal’ cannot be assumed to mean only a refusal on merits and that
an application to set aside an award which a rejected on the ground that it is delayed and that
no sufficient cause has been made out under section 5 of the limitation Act, will be an
appealable order”. It may mentioned here that section 34 of the Act provides for recourse to
court against an arbitral award, while section 37 provides for appeal against orders passed by
a court under section 34 in certain circumstances.

Non -Appealable orders

The following orders were non- appealable orders:

a. Dismissing an application for appointment of an arbitrator

b. Dismissing an application for filing in vacancy;
c. Removing an arbitrator and appointing another in his place;
d. Remitting to remit reconsideration;
e. Refusing to remit an award;
f. Not adopting the award but remitting for fresh determination;
g. Dismissing an application for filing an award;
h. Passing a decree in terms of the award, when no application for setting aside the award
is filed;
i. Making or recalling a reference etc.

The Act did not permit a second Appeal from an order passed in appeal U/S -39 of the Act.
However, this provision did not ‘effect or take away any right to appeal to the SC’. No second
Appeal was available against such despite the internal rules of the court or even letters Patent3.

1
Balde Pentaiah v. Balaganti Mallaiah AIR 1968 AP 228, Union of India v. Mahindra Supply Co. AIR 1962 SC 256
2
(2000) 6 SCC 94: 2000 (39) CLA- BL- Supp. 317
3
State of West Bengal v. Gaurangalal Chatterjee (1993) 3 SCC 1; UOI v. AS Dhupia AIR 1972 Del 108.

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Likewise, no second appeal was available even though the order of the first appellate court was
without jurisdiction, by reason of the appeal being incompetent. The only remedy left available
to an aggrieved party was revision4.

Appealable Order under 1996 Act

An Appeal against the order of the arbitral tribunal accepting the plea U/Ss-(2) and (3) of
section 16 and orders granting or refusing to grant an interim measures of protection under
section 17 Shall, under s37 (2), lies to the court authorised by law to hear appeals from original
decrees of the court passing such order. To the same court, an appeal under section 37(1) shall
lie against the order of the court granting or refusing to grant any measure of protection under
section 9 and against the order setting aside or refusing to set aside an arbitral award s 34 of
the Act. Here , the court against the order of which the appeals lies to the appellant court is the
court defined in section 2 (1)(e) –‘the principal civil court of original jurisdiction in a district
and includes HC in exercise of its original civil Jurisdiction, having jurisdiction to decide the
questions for framing the subject matter of the arbitration if the same had been the subject
matter of a suit, but does not includes any civil court of a grade inferior to such principal civil
court, or any court of small cause’.

If the court is lower court than HC, then the appeal shall lies to a single judge of the HC, while
if such court is HC itself, the application U/Ss- 16,17,9 and 34 shall be heard by a single judge
of the HC against which appeals U/S-37 (1) shall lie to the Divisional Bench of the HC.

No Appeal against Consent Order

An appeal against an order passed with the consent of the parties is not maintainable. No appeal
ought to have been field before the SC where an order for appointment of an arbitrator was
passed with the consent of the parties.

The agreement in this case was in respect of supply of sale seeds. Disputes as to the
determination of handling and supervision charges for lifting the sale deeds arose. The HC in
an interim order fixing quantum of handling charges that could be recovered pending disposal
of the writ. An appeal was filed against the order. Arbitration was already appointed with the

4
Achiran Bibi v. Babur Ali Sapui AIR 1945 Cal 156.

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consent of parties. The court said that it was not appropriate to consider the validity of the order
as the whole matter was already before the arbitrator who was to determine all claims5.

Power of Appellate Court

It’s open to the appellate court hearing an appeal under section 39 to consider the legality,
propriety and correctness of non-bailable orders passed by the trial court and affecting the
decision of the case6. The right to appeal is statutory right. It cannot be lost by the mere facts
that the second arbitrator passed his award in accordance with court orders. Such award is also
open to challenge. While considering the validity of the award the court can examine the
validity of the reference itself. While disposing of an appeal it is appeal to the court to set aside
any consequential or incidental order passed by the trial court. The appellate court cannot re-
examine evidence considered by the arbitrator7.

Section 40 of 1940 Act. (Repealed) attracted the provision of section 96(3) of the CPC. In view
of these provisions no appeal would lie from an order passed by consent though the order would
otherwise have been appealable under the Act8. The Gujarat HC restated the powers as follows-

Powers contemplated under section 96 of the CPC following legal proposition may be
highlighted which cannot be disputed:

a. Court cannot substitute its own view in place of Arbitrator’s view.

b. Appellate court cannot examine matter as a regular appeal or as a regular appellate
authority.
c. It is well known that court while considering the question whether award should be set
aside or not, court does not examine the question as an appellate court.
d. There does not appear to be any sure allegation of misconduct.
e. So far as the hearing on the merits of the award is concerned, the court has nothing to
say good or bad or indifferent.
f. Unless and until the case, squarely, falls within one or more grounds incorporated in
section 30, award of the arbitrator cannot be set aside.

5
State of M.P v. Bastar Oil Mills and Industries Ltd. 2001(4) Raj 7.
6
Suraj Prasad v. Munna LAl (1957) ALL LJ 51
7
State of Orissa v. R.N. Misra AIR 1884 Ori 42.
8
UOI v. Mahinder Singh AIR 1971 JK 10

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 g. Parties having chosen to get dispute resolve through the arbitral, process ordinarily
court should not interfere unless of the grounds incorporated in section 30 is
successfully pointed out or is spelt out. Etc.

No direct appeal from order of remission of award

No appeal was allowed from an order remitting an award U/s-16 (1) of 1940 Act9, or refusing
to remit it10. Where an award was remitted and the arbitrator refused to consider the award
which becomes void U/S-16 (3) of 1940 Act. And the court passed a decree on the merit of the
case, the legality of the award could be challenged in appeal11. If the court passed a decree in
accordance with the revised award had been remitted, no appeal would lie against the decree
on the ground that the order of remitted was wrong. An appellate court will not ordinarily
interfere with the discretion of the trial court in declining to remit the award unless there is no
ground for not remitting it or the discretion has been exercised on wrong principles. An order
of court directing the arbitrator to make a fresh award amounted to refusal to file award and
was not appealable12.

Second Appeal and revision application

Revision application is not a second appeal envisaged under Section 39(2) of 1940 Ac.: S-37
(2) of 1996 Act.

A revisional application before HC against an appellant order passed U/S-39 of the Arbitration
Act putting an embargo against filing a revisional application against appellant order under
section -39 of the 1940 Act. The Arbitration Act is a special statute having limited application
relating to matters governed by the Act. Such Special Statute, therefore, must have its
application as provided for in the statute. The revisional jurisdiction of the HC under the code
or under any other statute therefore shall not stand superseded under the Arbitration Act if the
Act does not contain any express bar against exercise of revisional power by the HC provided
that the exercise of such revisional power does not mitigate against giving effect to the
provisions of the Arbitration Act13.

9
Iftikar Ahmad v. syed Meeruban Ali AIR 1974 SC 749
10
Annada Prasad Dutt v. Jogesh Chandra Sen AIR 1914 Cal 497
11
George v. Vastian Souray, ILR 22 Mad 202
12
Saya Pye v. U. Kundinnya, ILR Rang 661.
13
Shyam Sunder Agarwal and Co. v. UOI, AIR 1996 SC 1321.

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In R. McDill and Co. Ltd. v. Gauri Shanker Sarda14 the SC held that the section 41 of the 1940
Act provided that the provision of CPC shall apply to all proceeding before the Court under the
Act. As the arbitration Act had not expressly taken away the application U/S-34 of the said
Act, such provision of order 23 of the CPC was applicable.

Second appeal to the SC is not barred. Writ petition is an extra ordinary constitutional
discretionary remedy. In this case, certain objections U/S-30 and 33(1940 Act) were dismissed.
An appeal against this dismissal was also dismissed. Against the dismissal of this appeal, the
extraordinary constitutional remedy was tried. The court said that this was not permissible in
regular course under normal situations as a substitution as a substitute for second appeal. The
writ petition was not permissible because of the availability of a remedy under Section-39(2)
of 1940 Act and section-37 (3) of the new 1996 Act15.

No appeals lie on letter patents order

Conros16 had filed the suit to recover a sum of about INR 41.9 million together with interest
from Lu Qin. Lu Qin filed a notice of motion for an order that the disputes in the suit be referred
to arbitration in view of an arbitration agreement between the parties as provided for in the
sales contract dated April 28, 2010 and for an order terminating the above suit. The learned
Single Judge of the Bombay High Court granted the prayer made by Lu Qin in the notice of
motion. The learned Single Judge's Order was appealed by Conros before the division bench
of the Court. The division bench referred the matter to the full bench of the Bombay High
Court. It has been held that a Letters Patent appeal is not maintainable from an order passed
under Section 8 of the Act.

14
(1991)2 SCC 548
15
J Qumairjee and Co. v. Third ADJ, Dehradun , (2000) 1 Raj 62.
16
Appeal No. 806 of 2011 in Notice of Motion No. 3709 of 2010 in Suit No. 2358 OF 2010

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Conclusion – Section 37 deals with entertaining appeals under certain orders. No other order
is appealable other than mentioned under Section 37 of Arbitration and Conciliation Act 1996.

Refusal to refer the parties to arbitration under section 8 of Arbitration and Conciliation act
1996 is now appealable. It is inserted in the act by the recent amendment of 2015.

An appeal against an order passed with the consent of the parties is not maintainable. No appeal
ought to have been field before the SC where an order for appointment of an arbitrator was
passed with the consent of the parties. No appeal is allowed from an order remitting an award
U/s 16 (1) of 1940 Act, or refusing to remit it.

In ITI Ltd. v. Siemens Public Communication Network Ltd17 the Supreme Court has
held that an order passed by a civil court in an appeal under section 37 of the Act is revisable
by the High Court under section 115 of CPC. The section only bars a second appeal and not
revision. The applicability of CPC has also not been expressly prohibited. The court said that
the application of the Code cannot be ruled out on the basis of an inference. It cannot be said
that a revision under section 115 would be a judicial interference in the process of arbitration
of such a nature as is not contemplated by section 5 of the Act.

Revision application is not a second appeal envisaged under Section 39(2) of 1940 or S-37 (2)
of 1996 Act.

A three judge bench of the Bombay High Court recently in Conros Steels Private Limited
("Conros") v. Lu Qin (Hong Kong) Company Limited ("Lu Qin") and Others1 has resolved the
question pertaining to the appealability from an order passed under Section 8 of the Arbitration
and Conciliation Act, 1996 ("the Act") under clause 15 of the Letters Patent. It held that Letters
Patent Appeal is not maintainable from an Order Passed under Section 8 of The Arbitration
Act.

17
AIR 2002 SC 2308

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Bibliography

BOOKS
 Halsbury’s law of India, vol-2, lexis Nexis, Butterworth’s, New Delhi.
 Majumdar. P. k, Basu on law of arbitration and conciliation, 10th edition,
2008, orient publishing company, New Delhi.
 Malhotra. O.P., Malhotra Indu, law and practice of arbitration and
conciliation, 2nd edition, 2006, lexis Nexis, Butterworth’s. New Delhi.
 Aiyar. P. Ramanatha, (2006), “the law lexicon, the encyclopaedic law
dictionary with legal maxims, Latin terms, words and phrases”, 2nd ed.,
Wadhwa Nagpur.
 Venugopal. K. K, Law of Arbitration and Conciliation, 4th ed., vol-1, 2005,
Wadhwa & Co. Nagpur.

 Justice Sethi, R. P. ‘Commentary on Law of Arbitration and Conciliation’ (2007

Edition, Ashoka Law House).

Websites
 http://lexarb.blogspot.in/2013/04/section-37-entertaing-appeal-against.html
 http://www.mondaq.com/india/x/452038/trials+appeals+compensation/Limitation+Of
+Time+Under+Section+34+Of+The+Arbitration+And+Conciliation+Act+1996
 http://www.kaplegal.com/upload/pdf/arbitration-law-india-critical-analysis.pdf
 http://manupatra.com/roundup/326/Articles/Arbitration.pdf
 http://www.caclubindia.com/articles/-analysis-of-interim-measures-u-s-9-and-17-of-
arbitration-and-conciliation-act-1996-17637.asp
 http://www.lawteacher.net/free-law-essays/commercial-law/arbitral-tribunal-to-rule-
its-own-jurisdiction-commercial-law-essay.php
 http://www.lawteacher.net/free-law-essays/commercial-law/setting-aside-an-arbitral-
award-commercial-law-essay.php

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