Orissa High Court held that writ petitions under Articles 226/227 are maintainable against orders under Section 37(1) of the Arbitration and Conciliation Act, 1996, where there is egregious illegality, perversity, or lack of jurisdiction.
Writ Jurisdiction Preserved Against Arbitration Orders with Jurisdictional Defects
The Orissa High Court has ruled that writ petitions under Articles 226 and 227 of the Constitution are maintainable against orders passed under Section 37(1) of the Arbitration and Conciliation Act, 1996, when they suffer from patent illegality, perversity, or manifest lack of jurisdiction. The Court emphasized that while arbitration proceedings are intended to be autonomous, constitutional remedies cannot be excluded in cases where there is a clear violation of principles of natural justice or statutory mandate.
The High Court clarified that supervisory jurisdiction under Articles 226 and 227 remains available as a safeguard against orders that are not merely erroneous on facts but fundamentally flawed in law.
"The writ jurisdiction cannot be rendered illusory where a decision is passed without jurisdiction, or in utter disregard of statutory provisions and fundamental principles,"the Court observed. The ruling is significant in balancing the finality of arbitration while preserving constitutional oversight in cases of egregious error.
For practitioners, this decision reaffirms the importance of judicial review in exceptional cases where arbitration rulings fail the test of legality. It provides a basis for challenging arbitral orders through writ petitions where jurisdictional or procedural overreach is evident, thereby maintaining a necessary check on arbitral authority.
Citations
- Arbitration and Conciliation Act, 1996, Section 37(1)
- Constitution of India, Articles 226, 227
