Delhi High Court
M/S. Evolve Marketing Services Pvt Ltd. vs M/S. Aircel Ltd. & Anr. on 7 September, 2015
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
*IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 7th September, 2015
+ W.P.(C) No.2839/2015 & CM No.5102/2015 (for stay).
M/S. EVOLVE MARKETING SERVICES
PVT LTD.. .....Petitioner
Through: Mr. Krishnamohan K. Menon, Adv.
Versus
M/S. AIRCEL LTD. & ANR. ..... Respondents
Through: Mr. Rohit Jain, Adv. for R-1.
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
RAJIV SAHAI ENDLAW, J
1. The petitioner, engaged in an arbitration with the respondent no.1 M/s
Aircel Limited, under Arbitration and Conciliation Act, 1996 and under the
aegis of the respondent no.2 Delhi International Arbitration Centre, Delhi
High Court Campus, New Delhi (DAC), has filed this petition under Articles
226 and 227 of the Constitution of India impugning the order dated 20th
December, 2014 of the sole Arbitrator of dismissal of application dated 10 th
September, 2014 of the petitioner. Axiomatically, reliefs of (i) allowing the
application dated 10th September, 2014 of the petitioner; (ii) directing the
respondent no.1 M/s Aircel Limited to deposit 50% share of the fees of
arbitration with the respondent no.2 DAC; (iii) refund of the said amount to
W.P.(C) No.2839/2015 Page 1 of 5
the petitioner; and, (iv) a direction to the Arbitrator to strike off the record of
the reply filed by the petitioner, are claimed.
2. Notice of the petition was issued to the respondent no.1 M/s Aircel Ltd.
only. The counsel for the respondent no.1 M/s Aircel Ltd. has appeared.
3. I have at the outset enquired from the counsel for the petitioner as to
how this petition under Articles 226 and 227 of the Constitution of India with
respect to arbitral proceedings is maintainable.
4. The only argument forthcoming is that the petitioner though aggrieved
has no other remedy. It is contended that, (i) as per the Rules of the
respondent no.2 DAC the parties to the arbitration had to deposit 100% of the
fee in advance; (ii) the petitioner deposited its share of 50% of the fees
totaling to Rs.6,26,765/-; (iii) though the respondent no.1 M/s Aircel Ltd.
was required to deposit Rs.6,26,765/- plus Rs.5,000/-, but did not deposit;
(iv) the rules of the respondent no.2 DAC require the petitioner to deposit the
same; (v) though the petitioner represented to the respondent no.2 DAC but
without any avail; and, (vi) the petitioner then filed application dated 10th
September, 2014 supra but the learned Arbitrator vide impugned order dated
20th December, 2014 dismissed the application.
W.P.(C) No.2839/2015 Page 2 of 5
5. The petition is entirely misconceived. It is the settled position in law
that the writ petitions with respect to the arbitral proceedings are not
maintainable. The seven Judge Bench of the Supreme Court in S.B.P. and Co.
Vs. Patel Engineering Ltd. (2005) 8 SCC 618 held that there is no warrant for
the approach adopted by some of the High Courts that any order passed by an
Arbitral Tribunal during arbitration would be capable of being challenged
under Article 226 or 227 of the Constitution of India. It was held, (i) that
Section 37 of the Arbitration Act makes certain orders of the Arbitral
Tribunal appealable; (ii) under Section 34, the aggrieved party has an avenue
for ventilating his grievance against the award including any in-between
orders that might have been passed by the Arbitral Tribunal acting under
Section 16 of the Act; (iii) that the party aggrieved by any order of the
Arbitral Tribunal, unless has a right of appeal under Section 37 of the Act, has
to wait until the award is passed by the Tribunal - this appears to be the
scheme of the Act; (iv) the Arbitral Tribunal is after all the creature of a
contract between the parties i.e. Arbitration Agreement even though if the
occasion arises, the Chief Justice may constitute it based on the contract
between the parties; but that would not alter the status of the Arbitral
Tribunal; it will still be a forum chosen by the parties by agreement; that thus
W.P.(C) No.2839/2015 Page 3 of 5
the orders passed by the Arbitral Tribunal are incapable of being corrected by
the High Court under Article 226 or 227 of the Constitution and such an
intervention by the High Courts, is not permissible; (v) that the object of
minimizing judicial intervention while the matter is in the process of being
arbitrated upon, will certainly be defeated if the High Court could be
approached under Article 227 or under Article 226 of the Constitution against
every order made by the Arbitral Tribunal; and, (vi) therefore it is necessary
that once the arbitration has commenced in the Arbitral Tribunal, parties have
to wait until the award is pronounced unless of course a right of appeal is
available to them under Section 37 of the Act even at an earlier stage.
6. A Division Bench of this Court in Awasthi Construction Co. Vs. Govt.
of NCT of Delhi MANU/DE/5926/2012, faced with the same issue was
shown a judgment of the High Court of Patna in Senbo Engineering Limited
v. State of Bihar AIR 2004 Patna 33 and noticed that the High Courts of
Bombay and Allahabad also have held the writ remedy to be available against
an order of the Arbitral Tribunal against which no remedy was available but
differed from the same. The same view has been reiterated by the subsequent
Division Benches in ATV Projects India Ltd. Vs. Indian Oil Corporation
Ltd. 200 (2013) DLT 553 and in Dhanraj Bajaj and Company vs. Navodaya
W.P.(C) No.2839/2015 Page 4 of 5
Vidayala Samiti MANU/DE/2288/2014.
7. The Supreme Court in Lalitkumar V. Sanghavi Vs. Dharamdas V.
Sanghavi (2014 ) 7 SCC 255 held that the view taken by the Bombay High
Court, that against an order of the Arbitral Tribunal jurisdiction of the High
Court under Article 226 of the Constitution can be invoked, is not in
accordance with law laid down in S.B.P. and Co. supra.
8. It is immaterial that the arbitration in the present case is under the aegis
of respondent No.2 DAC. Moreover, the petitioner, by agreeing to arbitration
under the aegis of respondent No.2 DAC, consented / is deemed to have
consented to the Rules of DAC and as per which, on one of the parties not
paying its share of costs, the other party has to pay the same.
9. There is thus no merit in the petition. Dismissed.
No costs.
RAJIV SAHAI ENDLAW, J.
SEPTEMBER 07, 2015 'pp' (corrected & released on 21st October, 2015) W.P.(C) No.2839/2015 Page 5 of 5