This short post discusses the supposed anomaly identified by the SC in Section 11 of the 1996 Act (as amended) in that it provides that while an order in Section 8 is appealable under Section 37 and an order under Section 11 is not. The relevant quotes from the judgment of the SC in the recent case of Pravin Electricals Pvt Ltd v Galaxy Infra and Engineering Pvt Ltd. are posted at the end of this post.
In short, the suggestion of the SC may not be workable and could lead to further delays in the constitution of the Tribunal. The law as it stands today is that an appeal from an order under Section 11 is not appealable except through the SLP route. Note that S. 11 is not a trial by itself but is only intended to aid the parties to constitute the arbitral tribunal. If the suggestion of the SC is accepted, it would simply add one more layer to the current process which is already time-consuming, costly and cumbersome. See, this article, which empirically provides an overview of how long it takes for the arbitral tribunal to be constituted where appeals are filed to the SC from HC orders.
The following table, noted in the above article, represents the time taken from the date of application to the High Court (HC) for appointment of arbitrator till the date of final disposal by the Supreme Court of appeal from the order of the HC:
|
Time taken (Months) |
Petitions from
date of appointment to final disposal by Supreme Court |
Petitions from date of arbitration notice to final disposal by Supreme Court |
|
Up to 12 |
3 |
2 |
|
13-36 |
40 |
38 |
|
37-60 |
17 |
18 |
|
61-84 |
15 |
15 |
|
Over 84 |
8 |
10 |
|
Total |
83 |
83 |
The data collected up to 2011 is available here.
As the data shows above, in most cases, it has taken more than a year for the courts from the date of notice of arbitration till the data of final disposal (of appeal) appointing or rejecting appointment petition for arbitrator. The data since 2011 could be collected and analysed but this blawgger is not really sure if there would be a remarkable improvement in the disposal rate necessitating a contrary view from what is noted above. [this para has been slightly modified after posting]
The purpose of Section 8 is totally different from that of Section 11. The limited purpose of Section 11 is to enable constitution of tribunal. Whether any point would be served if an additional layer of courts would be added needs to be examined. There might be an "anomaly" in treatment of S. 8 petitions and S. 11 petitions insofar as appeal is concerned but that does not mean that an amendment has to be carried out. Doctrinal consonance cannot triumph necessity.
Extracts from Pravin Electricals Pvt Ltd v Galaxy Infra and Engineering Pvt Ltd.
"21. However, by a process of judicial interpretation, Vidya Drolia (supra) has now read the “prima facie test” into Section 11(6A) so as to bring the provisions of Sections 8(1) and 11(6) r/w 11(6A) on par. Considering that Section 11(7) and Section 37 have not been amended, an anomaly thus arises. Whereas in cases decided under Section 8, a refusal to refer parties to arbitration is appealable under Section 37(1)(a), a similar refusal to refer parties to arbitration under Section 11(6) read with Sections 6(A) and 7 is not appealable. In the light of what has been decided in Vidya Drolia (supra), Parliament may need to have a re-look at Section 11(7) and Section 37 so that orders made under Sections 8 and 11 are brought on par qua appealability as well."
