The Kerala High Court ruled that when a statutory remedy under Section 37 Arb. exists, Article 227 cannot be invoked to Challenge Section 34 Arb. Judgment
- Nyayshastram
- Mar 30
- 2 min read
In a significant ruling, the Kerala High Court dismissed a petition filed under Article 227 of the Constitution challenging the Commercial Court’s decision to set aside an arbitral award. The Court held that the appropriate remedy for the petitioner lies in filing an appeal under Section 37 of the Arbitration and Conciliation Act, 1996.
Background of the Case
The dispute arose from a contract dated July 31, 2013, between government contractor M.I. Mohammed and M/s. HLL Life Care Ltd. for constructing a Multidisciplinary Research Laboratory and Animal House at Medical College, Thiruvananthapuram. Originally set for completion by June 2, 2015, the project was delayed until May 15, 2018, allegedly due to the respondent’s lapses.
Following disputes over payment, the matter was referred to arbitration. In an award dated August 18, 2021, the arbitrator directed the respondents to pay ₹7.31 crore to the petitioner while rejecting the respondents’ counterclaims. However, the Commercial Court, Ernakulam, later set aside the award on November 29, 2023, citing the arbitrator’s ineligibility under Section 12(5) of the Arbitration Act.
Key Legal Issues
Jurisdiction of the High Court under Article 227: The petitioner contended that the Commercial Court’s order was beyond the scope of Section 34 of the Arbitration Act, necessitating High Court intervention.
Validity of Arbitrator’s Appointment: The respondents argued that the arbitrator’s appointment violated Section 12(5) of the Act, which disqualifies certain categories of arbitrators unless expressly waived in writing.
Availability of Statutory Remedy: The Court considered whether an alternative remedy under Section 37 barred the petitioner from invoking Article 227.
High Court’s Observations
The Kerala High Court ruled that when a statutory remedy under Section 37 exists, Article 227 cannot be invoked. It noted that the petitioner’s challenge should be pursued through the appellate mechanism prescribed in the Arbitration Act rather than seeking constitutional intervention.
Verdict
The Court dismissed the petition, clarifying that the petitioner must file an appeal under Section 37 if they wish to challenge the Commercial Court’s decision.
This judgment reinforces the principle that arbitration-related challenges should follow the statutory appeal framework and discourages parties from bypassing prescribed legal remedies.
Petitioner were represented by Adv K.Babu Thomas, Marykutty Babu, Drisya Dileep
The respondents were represented by Four Pillars Chambers headed by Advocate Nikhilesh Krishnan, assisted by Abhishek Bhushan Singh, Aju Mathew, and Abu Mathew, Advocates.
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