The Supreme Court has held that a High Court exercising appellate jurisdiction under Section 37(1)(b) of the Arbitration and Conciliation Act, 1996 cannot remit a pending Section 37 appeal to an Arbitral Tribunal and direct it to treat the proceedings as an application for interim relief under Section 17 of the Act.
The case arose from a contract awarded to the respondent company for providing Administrative and Training Infrastructure at NDA Khadakwasla. Disputes arose over adjustments, payment calculations and design issues. After the respondent’s claims were rejected by a Dispute Resolution Board, it invoked arbitration and sought interim protection under Section 9 against termination of the contract. The District Judge dismissed the Section 9 application, following which the respondent filed a Section 37(1)(b) appeal.
During the pendency of the appeal, the Union terminated the work order on January 3, 2026. The High Court stayed the termination and subsequently appointed a sole arbitrator by consent. It then directed that the proceedings pending before it under Section 37 be remitted to the Arbitral Tribunal and treated as an application under Section 17. An SLP was filed against this order in the Supreme Court, where the court considered the following question-
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“Whether the High Court, while exercising statutory appellate jurisdiction under Section 37(1)(b) of the Arbitration and Conciliation Act, 1996 against rejection of an application under Section 9 can by consent of the parties, remit the appellate proceedings to the 1 subsequently constituted Arbitral Tribunal and direct the Tribunal to treat such proceedings as an application under Section 17 of the Act?”
The Bench of Justice Aravind Kumar and Justice Prasanna B Varale held that the direction could not be sustained, observing that the appellate jurisdiction under Section 37 is vested exclusively in the ‘Court’ and an Arbitral Tribunal exercising powers under Section 17 does not exercise appellate jurisdiction over a Section 9 order. The Court held that the powers under Sections 37 and 17 are distinct and “cannot be interchanged merely by transmitting or remitting the appellate proceedings to the Tribunal.”
The Court clarified that, after the constitution of the Arbitral Tribunal, the High Court could have granted liberty to the respondent to independently approach the Tribunal under Section 17 for interim measures available in law. It also noted that the prayer seeking protection against termination had become spent after the contract was actually terminated.
Accordingly, the Supreme Court set aside the High Court’s direction only to the extent that it remitted the Section 37 proceedings to the Tribunal as a Section 17 application. Since the Tribunal had already taken up the remaining disputes and the parties had subsequently entered into a Supplementary Agreement dated April 24, 2026, the Court left the other issues to be adjudicated by the Tribunal.
