In a recent ruling, the Delhi High Court clarified that a writ petition under Article 227 of the Constitution is indeed maintainable to contest a commercial court’s dismissal of a challenge to an arbitral award on jurisdictional grounds. The decision arose from a petition challenging the District Judge’s refusal to consider an appeal under Section 34 of the Arbitration Act.
A Bench of Justice Yashwant Varma and Justice Ravinder Dudeja examined whether the District Judge’s order could be treated as a refusal to set aside an arbitral award—a refusal that traditionally permits an appeal under the Arbitration and Conciliation Act. Dr. Amit George, serving as amicus curiae, highlighted a Supreme Court precedent indicating that dismissing a challenge on jurisdictional grounds does not equate to rejecting an award’s validity.
In this case, the District Judge declined to entertain the Section 34 petition on the basis that an earlier application for appointing an arbitrator under Section 11 had already been filed with the High Court. According to Section 42 of the Arbitration Act, once an application involving an arbitration agreement is made in one court, only that court retains authority over subsequent related applications. The High Court, however, noted that the Section 11 petition does not constitute an application under the purview of Section 42, meaning that the District Court retained the jurisdiction to hear the matter.
The court underscored its constitutional authority of judicial review under Article 227, permitting it to assess whether the District Judge erred in handling the Section 34 challenge. Finding the District Judge’s decision misguided, the High Court set aside the order and directed the Section 34 petition to be revived on the Commercial Court’s docket for a fresh hearing, considering the latest observations.
This ruling underscores the High Court’s supervisory role in ensuring lower courts properly interpret jurisdictional boundaries within the context of arbitration, providing a critical safeguard for parties seeking recourse under the Arbitration Act.
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