Appeals
Appeals under the Arbitration and Conciliation Act, 1996
The Act primarily aims to reduce court intervention and promote speedy and final resolution of disputes through arbitration. However, it provides limited and specific grounds on which appeals can be filed against arbitral awards and certain orders.
1. Nature of Appeals under the Act
Arbitration awards are final and binding on the parties.
Appeals are strictly limited by the statute.
Unlike ordinary court judgments, appeals on merits of arbitral awards are generally not allowed.
Appeals are mostly confined to questions of law arising out of arbitral awards or challenge to orders passed by courts related to arbitration.
2. Relevant Provisions for Appeals
A. Section 37: Appeals from Certain Orders
Section 37 deals with appeals against specific interlocutory orders passed by courts under the Act.
Orders against which appeals lie include:
Appointment or removal of arbitrators.
Setting aside or refusing to set aside an interim measure.
Granting, refusing, modifying, or vacating interim measures.
Granting or refusing to grant a stay of arbitration proceedings.
Appeals under this section are to the High Court.
The legislature has expressly excluded appeals against arbitral awards under this section.
B. Section 34: Challenge to Arbitral Award (Setting Aside)
Section 34 is the only provision under which a party can challenge an arbitral award before a court.
The grounds for setting aside are limited, including:
Incapacity of a party.
Invalid arbitration agreement.
Improper constitution of tribunal.
Violation of natural justice.
Award beyond the scope of arbitration agreement.
Award in conflict with the public policy of India.
Section 34 is not an appeal but a challenge to the validity of the award.
Courts generally do not re-appreciate evidence or interfere with the merits of the award.
Case Law:
ONGC Ltd. v. Saw Pipes Ltd. (2003)
Supreme Court emphasized that courts should exercise restraint and interfere only on narrow grounds of public policy.
Renusagar Power Co. Ltd. v. General Electric Co. (1994)
Set strict limits on court intervention on grounds of public policy.
C. Section 50: Appeal Against Arbitration Tribunal's Fees
Parties can appeal to the High Court against the order of the arbitral tribunal fixing its fees.
D. Section 43: Appeal Against Court's Order Refusing to Refer Parties to Arbitration
When a court refuses to refer parties to arbitration under Section 8, an appeal lies before the High Court.
E. Section 87: Appeal in the case of International Commercial Arbitration
The Supreme Court and High Courts can entertain appeals on questions of law arising out of awards in international commercial arbitration if the parties have expressly agreed to such appeals.
3. Key Points on Appeals
No appeal against arbitral awards on merits: The Act encourages finality of awards.
Appeals are allowed against interlocutory orders of courts dealing with arbitration.
Limited appeals on questions of law in international commercial arbitrations, if agreed by parties.
Challenge to awards is through setting aside petitions, not appeal.
4. Important Case Laws on Appeals
| Case | Principle |
|---|---|
| ONGC Ltd. v. Saw Pipes Ltd. (2003) | Courts should not interfere with arbitral awards except on limited grounds. |
| Renusagar Power Co. Ltd. v. General Electric Co. (1994) | Public policy is narrowly construed for setting aside awards. |
| Kvaerner Cementation India Ltd. v. Bajranglal Agarwal (2019) | Section 37 excludes appeals against arbitral awards. |
| Chloro Controls India Pvt. Ltd. v. Severn Trent Water Purification Inc. (2013) | Allowed appeals on questions of law in international commercial arbitration if parties agreed. |
5. Conclusion
The Arbitration and Conciliation Act, 1996, reflects a strong pro-arbitration policy aimed at minimizing judicial intervention.
Appeals are not a general remedy and are allowed only in specific circumstances.
The finality of awards is preserved to promote arbitration as an effective alternative dispute resolution mechanism.
Courts act as supervisors, ensuring fairness but not re-litigating the dispute.
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