Supreme Court rules that only in rare and exceptional cases the High court can exercise its power under Article 226/227

In the case of Bhaven Constructions v. Executive Engineer Sarsar Sarovar Narmada Nigam Ltd., the Supreme Court has observed the power of High Court to interfere with arbitration process under Article 226/227 of the Indian Constitution.

It held that only in exceptional situations, in rare cases, where a party is left without any remedy, the High Court can interfere. If they are allowed to interfere beyond their ambit, then the efficiency of the process will be destructed. The Supreme Court had set aside the order of Gujarat High Court which allowed a writ petition that challenged the jurisdiction of sole arbitrator.

The arbitration Act itself provides for many provisions regarding the forums to challenge the appointment of sole arbitrator. The order of Arbitrator under Section 16(2) of the Act was challenged under Article 226/227. The court observed that the Section 34 of the Act provides for the mechanism of taking recourse against an award. Section 16 of the Act mandates that an aggrieved party should approach the tribunal first for the issue of jurisdiction.

The code itself is complete and lays down procedure for everything. If there is a clear bad faith is shown towards on party, then only the power under Article 226/227 can be used.

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