High Court's Power Under Article 226/227 To Interfere With Arbitration Process Needs To Be Exercised In Exceptional Rarity: Supreme Court
4 years ago

High Court's Power Under Article 226/227 To Interfere With Arbitration Process Needs To Be Exercised In Exceptional Rarity: Supreme Court

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The Supreme Court has observed that the power of the High Courts under Article 226/227 of the Constitution of India to interfere with an arbitration process needs to be exercised in exceptional rarity, wherein one party is left remediless under the statute or a clear 'bad faith' shown by one of the parties. If the Courts are allowed to interfere with the arbitral process beyond the ambit of the enactment, then the efficiency of the process will be diminished, the bench comprising Justices NV Ramana, Surya Kant and Hrishikesh Roy observed while setting aside a judgment of Gujarat High Court allowing a writ petition challenging the jurisdiction of the sole arbitrator. In this case, the bench observed that the order passed by the arbitrator under Section 16 of the Arbitration Act was challenged through a petition under Article 226/227 of the Indian Constitution. This power needs to be exercised in exceptional rarity, wherein one party is left remediless under the statute or a clear 'bad faith' shown by one of the parties.

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