HC's Power Under Article 226/227 To Interfere With Arbitration Process And Recent News Related To It


HC's Power Under Article 226/227 To Interfere With Arbitration Process And Recent News Related To It

POWERS OF COURT UNDER ARTICLE 226

  • The article deals with the power of High Courts to issue certain writs notwithstanding anything in Article 32.
  • The court is authorised to entertain these types of writs- Habeas Corpus, Mandamus, Prohibition, Quo warranto, Certiorari.
  • Along with this, Article 227 determines that every High Court shall have superintendence over all courts and tribunals throughout the territories in relation to which it exercises jurisdiction (except a court formed under a law related to armed forces).

The High Court, can, under Article 227 –

- Call for returns from such courts,
- Make and issue general rules and prescribe forms for regulating the practice and proceedings of such courts.
- Prescribe forms in which books, entries and accounts be kept by the officers of any such courts.
- Settle tables of fees to be allowed to the sheriff and all clerks and officers of such courts.

  • Arbitration has been defined as "A reference to the decisions of one or more persons either with or without the umpire, a particular matter in difference between the parties."
  • In India, Arbitration is governed by the Arbitration And Conciliation Act, 1996.

WHAT IS THE ISSUE?

  • The issue here was whether under Article 226 and 227, the arbitral process interferes and what are conditions under which this can be made possible.
  • The Court here noted that the Arbitration Act itself gives various procedures and forums to challenge the appointment of an arbitrator and that the existing framework provides a mechanism to address the problems within the ambit of the Act itself.
  • It was stressed that if parties fail to refer a matter to arbitration or to appoint an arbitrator in accordance with the procedure agreed by them, then a party can take recourse for court assistance under Section 8 or 11 of the Arbitration Act.
  • The Court held that it would be prudent for a judge to not exercise discretion to allow judicial interference beyond the procedure established under the enactment and that it needs to be exercised in exceptional rarity, wherein the party is left with no other remedy.

COURT'S JUDGEMENT

  • The Supreme Court set aside the judgement of the Gujarat High Court where it had allowed a writ petition challenging the jurisdiction of an arbitrator.
  • While setting aside the judgement, the court held that though the scope of Article 227 is broad and pervasive, it was not right on the part of the HC to interject the arbitral process at this stage.
  • The court set aside the High Court judgement and stated that as per the Act jurisdictional questions have to be first looked into by the tribunal before they can be brought to the court under Section 34. Therefore, Respondent No.1 was not remediless and had a chance given by the statute to appeal.

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