The Delhi High Court has dismissed a batch of petitions challenging orders of a sole arbitrator rejecting applications for amendment of statements of claim, holding that such orders are purely procedural in nature and do not qualify as “interim awards” amenable to challenge under Section 34 of the Arbitration and Conciliation Act, 1996.
A Single Judge Bench of Justice Harish Vaidyanathan Shankar rejected petitions arising out of common arbitral proceedings involving multiple claimants.
The petitions assailed three orders of the learned sole arbitrator dated 25 July 2025, 22 September 2025, and 9 October 2025, by which the arbitrator had declined amendment of pleadings sought by one batch of claimants (Batch-B) and subsequently dismissed review applications. The petitioners invoked Section 34, contending that rejection of their amendment applications conclusively affected their substantive rights and therefore amounted to an ‘interim award’.
At the outset, the Court examined the maintainability of the petitions. The respondent objected to the Section 34 challenge, arguing that the impugned orders merely regulated procedure and did not finally determine any claim, issue, or right between the parties. Reliance was placed on settled precedent to submit that not every order passed during arbitral proceedings can be treated as an arbitral award.
The Court undertook an extensive survey of the statutory scheme and judicial precedent, including decisions of the Supreme Court and the Delhi High Court, to delineate the distinction between procedural orders and interim awards. It reiterated that while Section 31(6) permits an arbitral tribunal to make interim awards, such awards must possess the element of finality and must conclusively determine a substantive issue forming part of the arbitral reference.
Applying these principles, the Court held that the impugned orders did not finally adjudicate any claim or issue referred to arbitration. The rejection of amendment applications, though final as far as the applications themselves were concerned, did not decide the merits of the claims, nor did it foreclose adjudication on quantum or entitlement, which were expressly kept open under the points of determination framed by the arbitrator. The Court observed that an order may finally dispose of an application, yet still remain procedural if it does not conclusively determine any part of the dispute between the parties.
The Court also rejected the petitioners’ argument that there was unequal treatment vis-à-vis another batch of claimants whose amendments had been allowed earlier. It noted that the arbitrator’s decision was influenced by the petitioners’ own recorded statement that they wished to proceed on the basis of existing pleadings, the advanced stage of proceedings, and the statutory mandate under Section 29A for expeditious conclusion of arbitration.
On the plea of patent illegality, the Court found no perversity or arbitrariness in the arbitrator’s reasoning. It held that the arbitrator had exercised discretion vested under Section 23(3) of the Act, having regard to delay, stage of proceedings, and earlier conduct of the parties. Such discretionary procedural decisions, the Court emphasised, fall squarely within the domain of the arbitral tribunal and are not open to interference under Section 34.
Concluding that the impugned orders were procedural directions and not interim awards, the Court held that the petitions under Section 34 were not maintainable, and dismissed them accordingly.
Cases relied/discussed:
1. Container Corporation of India Ltd. v. Texmaco Limited, 2009 SCC OnLine Del 1594.
2. Rhiti Sports Management Pvt. Ltd. v. Power Play Sports & Events Ltd., 2018 SCC OnLine Del 8678
3. Shyam Telecom Ltd. v. Icomm Ltd. (2010) 116 DRJ 456
4. Goyal MG Gases Pvt. Ltd. v. Panama Infrastructure Developers Pvt. Ltd. 2023 SCC OnLine Del 1894
5. Punita Bhardwaj v. Rashmi Juneja (2022 SCC OnLine Del 2691
6. NTPC Ltd. v. L&T & Anr. 2023:DHC:2154
7. ONGC Petro Additions Ltd. v. Technimont S.P.A. (O.M.P. (COMM) 424/2020)
8. MBL Infrastructure Ltd. v. Rites Ltd. 2023 SCC OnLine Del 2736
Cases Distinguished on Facts:
1. Indian Farmers Fertilizer Cooperative Ltd. v. Bhadra Products (2018) 2 SCC 534
2. H.S. Bedi (Retd.) v. STCI Finance Ltd.2020:DHC:3495
Appearances:
For the Petitioner: Mr. Deepak Dhingra and Ms. Sneh Somani, Advocates.
For the Respondent: Ms. Aakanksha Kaul, Mr. Aman Sahani, Ms. Ashima Chopra and Mr. Saptarshi Sarmah, Advocates.
