Appeal Under The Arbitration and Conciliation Act, 1996
Section 37 - Appealable Orders
📘 Overview of Appeal Provision
Section 37 of The Arbitration and Conciliation Act, 1996 is a crucial provision that governs the right to appeal against specific orders passed under the Act. This section is designed to balance the need for judicial oversight with the principle of minimal court interference in arbitration proceedings.
Key Objectives:
- Limited Scope: Appeals are restricted to specific orders only
- Finality: No second appeal is permitted (except to Supreme Court)
- Efficiency: Promotes speedy resolution of disputes
- Judicial Balance: Maintains minimal court intervention while ensuring justice
⚖️ Legal Provisions - Section 37
Section 37(1) - Appealable Orders from Courts:
An appeal shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals:
- (a) Refusing to refer the parties to arbitration under Section 8
- (b) Granting or refusing to grant any measure under Section 9 (Interim Measures)
- (c) Setting aside or refusing to set aside an arbitral award under Section 34
Section 37(2) - Appeals from Arbitral Tribunal:
An appeal shall also lie to a Court from an order of the arbitral tribunal:
- (a) Accepting the plea referred to in sub-section (2) or sub-section (3) of Section 16 (jurisdiction)
- (b) Granting or refusing to grant an interim measure under Section 17
Section 37(3) - Limitation on Second Appeal:
No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court.
📋 Appealable Orders - Detailed Breakdown
1. Order Refusing Reference to Arbitration (Section 8)
Context: When a judicial authority refuses to refer parties to arbitration despite existence of arbitration agreement
Appeal lies to: Court authorized to hear appeals from original decrees
Significance: Protects party's right to arbitrate contractual disputes
2. Orders on Interim Measures (Section 9)
Context: Court grants or refuses interim protection before or during arbitration
Examples: Attachment of property, appointment of receiver, interim injunction
Appeal lies to: Appellate court
3. Orders on Setting Aside Award (Section 34)
Context: Most important - challenges to arbitral awards
Two scenarios:
- Court sets aside the award
- Court refuses to set aside the award
Appeal lies to: High Court/Commercial Appellate Court
4. Tribunal's Jurisdictional Orders (Section 16)
Context: Tribunal accepts plea that it lacks jurisdiction
Impact: Terminates arbitration proceedings
Appeal lies to: Principal Civil Court or High Court
5. Tribunal's Interim Measure Orders (Section 17)
Context: Tribunal grants or refuses interim measures during proceedings
Examples: Conservation of goods, security for costs
Appeal lies to: Principal Civil Court or High Court
⏰ Limitation Period for Filing Appeals
For Commercial Disputes (Specified Value ≥ ₹3,00,000):
Time Limit: 60 Days
As per Section 13(1A) of Commercial Courts Act, 2015
For Non-Commercial Disputes (Value < ₹3,00,000):
Appeal to High Court: 90 Days
As per Article 116, Limitation Act, 1963
Intra-High Court Appeal: 30 Days
As per Article 117, Limitation Act, 1963
Condonation of Delay:
- Section 5 of Limitation Act applies
- Only "short delays" can be condoned
- Requirement: Sufficient cause and bona fide conduct
- Maximum period: Courts generally consider up to 120 days total
- Beyond 120 days: Generally not condoned (as per Borse Brothers case)
⚖️ Landmark Case Laws
1. Government of Maharashtra v. Borse Brothers Engineers & Contractors (2021)
Citation: Civil Appeal No. 995/2021
Court: Supreme Court of India (3-Judge Bench)
Key Issue: Limitation period for filing appeals under Section 37
Facts:
- Different High Courts applied varying limitation periods
- Bombay and Delhi HC refused to condone delays beyond 120 days
- MP High Court held Section 5 of Limitation Act applies
- Conflict arose regarding condonation of delay
Held:
- Appeals under Section 37 must be filed within 60 days for commercial disputes
- Overruled N.V. International v. State of Assam
- Section 5 of Limitation Act applies for condonation
- Only "short delays" can be condoned, not long delays
- Condonation is exception, not rule
- Emphasized speedy disposal objective of Arbitration Act
Significance:
Established uniform limitation period across India and balanced speedy disposal with justice
2. Punjab State Civil Supplies Corporation Ltd. v. Sanman Rice Mills (2024)
Court: Supreme Court of India
Judges: Justice PS Narasimha & Justice Pankaj Mithal
Key Issue: Scope of appellate court's power under Section 37
Facts:
- Section 34 petition dismissed by Additional District Judge
- High Court in appeal set aside both order and arbitral award
- Question arose about extent of appellate interference
Held:
- Scope of appeal under Section 37 is restricted and limited
- Appellate court's power not akin to normal civil appellate jurisdiction
- Cannot set aside award merely because appellate view is "better"
- Must defer to arbitral tribunal's view unless award shows perversity
- Grounds limited to those under Section 34 only
- Courts should not reappraise evidence
Significance:
Reinforced minimal judicial intervention principle and finality of arbitral awards
3. Consolidated Engineering Enterprises v. Principal Secretary Irrigation (2008)
Court: Supreme Court of India
Key Issue: Applicability of Limitation Act to Arbitration Act proceedings
Held:
- Section 43 of Arbitration Act makes Limitation Act applicable
- Limitation Act applies broadly to arbitration proceedings
- Articles 116 and 117 govern appeal periods
- Established foundation for limitation jurisprudence in arbitration
Significance:
Clarified that Limitation Act provisions apply unless explicitly excluded
4. Union of India v. Varinendra Constructions Ltd. (2018)
Court: Supreme Court of India
Key Issue: Maximum time limit for Section 37 appeals
Held:
- Maximum period of 120 days (90 + 30) for filing appeals
- Appeals are continuation of original proceedings
- Same time limits as Section 34 applications apply
- Delay beyond 120 days generally not condonable
Significance:
Created "hard stop" at 120 days for Section 37 appeals (later refined by Borse Brothers)
📊 Comparison Table: Section 37 Appeals
| Aspect | Section 37(1) - Court Orders | Section 37(2) - Tribunal Orders |
|---|---|---|
| Source of Order | Courts (District Court/High Court) | Arbitral Tribunal |
| Related Sections | Sections 8, 9, 34 | Sections 16, 17 |
| Nature of Issues | Reference to arbitration, Interim measures, Challenge to award | Jurisdictional pleas, Interim measures by tribunal |
| Appeal Lies To | Court authorized to hear appeals from original decrees | Principal Civil Court/High Court |
| Limitation (Commercial) | 60 days (Section 13(1A), Commercial Courts Act) | 60 days (Section 13(1A), Commercial Courts Act) |
| Limitation (Non-Commercial) | 90 days (Article 116, Limitation Act) | 90 days (Article 116, Limitation Act) |
| Second Appeal | No (except to Supreme Court) | No (except to Supreme Court) |
| Scope of Review | Limited - only on Section 34 grounds | Limited - jurisdictional/interim measures |
| Condonation of Delay | Only short delays (Borse Brothers) | Only short delays (Borse Brothers) |
| Purpose | Judicial oversight on court decisions | Judicial oversight on tribunal decisions |
📊 Limitation Period Comparison
| Type of Dispute | Specified Value | Limitation Period | Legal Provision | Condonation |
|---|---|---|---|---|
| Commercial Disputes | ₹3,00,000 or more | 60 Days | Section 13(1A), Commercial Courts Act, 2015 | Short delays only |
| Non-Commercial (High Court) | Less than ₹3,00,000 | 90 Days | Article 116, Limitation Act, 1963 | Short delays only |
| Intra-High Court Appeal | Any value | 30 Days | Article 117, Limitation Act, 1963 | Short delays only |
| Maximum Period (General) | Any value | 120 Days | Judicial interpretation (Varinendra) | Rarely beyond this |
🔄 Flowchart: Appeal Process Under Section 37
Order Passed Under:
Section 8/9/34 (Court) or
Section 16/17 (Tribunal)
under Section 37?
Order is Final
Commercial Dispute
(Value ≥ ₹3 Lakhs)?
60 Days
(Commercial Courts Act)
90 Days
(Limitation Act)
Before Appellate Court
(High Court/Commercial Appellate Court)
Limitation Period?
Under Section 5,
Limitation Act
(Only Short Delays)
Appellate Court
Hears Appeal
Limited Scope Review
(Section 34 grounds only)
Confirm/Modify/Set Aside
(Section 37(3))
Except to Supreme Court
Supreme Court Appeal
(Special Leave Petition)
Article 136, Constitution
📝 Practical Examples
Example 1: Appeal Against Section 34 Order
Situation:
ABC Ltd. obtained an arbitral award of ₹50 lakhs against XYZ Corporation. XYZ filed a Section 34 application to set aside the award on grounds of patent illegality. The District Court dismissed the Section 34 application, upholding the award.
Question: Can XYZ Corporation appeal?
Answer:
- Yes, appeal lies under Section 37(1)(c)
- Appeal against order refusing to set aside award
- File before High Court/Commercial Appellate Division
- Time limit: 60 days (commercial dispute value ≥ ₹3 lakhs)
- Grounds limited to Section 34 parameters
Example 2: Appeal Against Refusal to Refer to Arbitration
Situation:
A construction contract contains an arbitration clause. When disputes arose, the contractor filed a suit in court. The builder filed an application under Section 8 requesting reference to arbitration. The District Court rejected the Section 8 application, holding that no valid arbitration agreement exists.
Question: Can the builder appeal?
Answer:
- Yes, appeal lies under Section 37(1)(a)
- Appeal against order refusing to refer parties to arbitration
- File before High Court
- Time limit: Depends on whether commercial dispute
- Purpose: Protect right to arbitrate disputes
Example 3: No Second Appeal
Situation:
Party A obtained an arbitral award. Party B challenged it under Section 34, which was dismissed. Party B filed appeal under Section 37 before High Court. The High Court also dismissed the appeal. Party B now wants to file another appeal before a Division Bench.
Question: Can Party B file a second appeal?
Answer:
- No, second appeal does not lie under Section 37(3)
- Only remedy: Special Leave Petition to Supreme Court under Article 136
- SLP requires substantial questions of law or injustice
- Supreme Court has discretionary jurisdiction
- Ensures finality and prevents prolonged litigation
Example 4: Delay in Filing Appeal
Situation:
A commercial dispute with value ₹25 lakhs. Section 34 order passed on 1st January 2025. Party files appeal under Section 37 on 15th April 2025 (105 days delay). Party cites COVID-related difficulties and counsel's illness as reasons.
Question: Can delay be condoned?
Answer:
- Possibly, but requires strong justification
- Original limitation: 60 days (expired 2nd March 2025)
- Delay: 45 days beyond prescribed period
- As per Borse Brothers case: Only short delays condoned
- Party must show: (a) Sufficient cause, (b) Bona fide conduct, (c) No negligence
- Court will examine each reason carefully
- Delays beyond 120 days total rarely condoned
❓ Questions & Answers
Answer: The main purpose of Section 37 is to provide a limited right of appeal against specific orders passed under the Arbitration Act, while maintaining the principle of minimal judicial intervention in arbitration proceedings. It balances the need for judicial oversight with the efficiency and finality of arbitration. The section ensures that only certain critical orders can be appealed, thereby preventing unnecessary delays and preserving the arbitration process's effectiveness.
Answer: Under Section 37(1), appeals can be filed against the following orders passed by Courts:
- (a) Orders refusing to refer parties to arbitration under Section 8
- (b) Orders granting or refusing to grant interim measures under Section 9
- (c) Orders setting aside or refusing to set aside an arbitral award under Section 34
These are exhaustive - no other court orders under the Arbitration Act can be appealed.
Answer: The limitation period depends on the nature and value of the dispute:
- Commercial Disputes (value ≥ ₹3,00,000): 60 days as per Section 13(1A) of Commercial Courts Act, 2015
- Non-Commercial Disputes (value < ₹3,00,000): 90 days for appeals to High Court (Article 116, Limitation Act) or 30 days for intra-High Court appeals (Article 117)
- Condonation: Only "short delays" can be condoned under Section 5 of the Limitation Act, as held in Borse Brothers case
- Maximum Period: Courts generally do not condone delays beyond 120 days total
Answer: No, Section 37(3) explicitly states that "No second appeal shall lie from an order passed in appeal under this section." This means once the appellate court decides an appeal under Section 37, no further appeal lies to another court. However, this prohibition does not affect the right to file a Special Leave Petition (SLP) to the Supreme Court under Article 136 of the Constitution of India. The Supreme Court has discretionary power to hear such petitions if substantial questions of law or justice are involved.
Answer: In Government of Maharashtra v. Borse Brothers Engineers & Contractors (2021), the Supreme Court made several important clarifications:
- Overruled: The earlier decision in N.V. International v. State of Assam
- Limitation Period: Established 60 days for commercial disputes under Commercial Courts Act
- Condonation: Held that Section 5 of Limitation Act applies, but only "short delays" can be condoned
- Principle: Condonation is exception, not rule, and party must show bona fide conduct
- Objective: Emphasized speedy disposal of disputes as core objective of Arbitration Act
- Delay Beyond 120 Days: Generally not condoned except in exceptional circumstances
Answer: As clarified in Punjab State Civil Supplies Corporation v. Sanman Rice Mills (2024), the scope is very limited:
- Not Normal Appellate Power: Not akin to civil court's regular appellate jurisdiction
- Restricted Grounds: Limited to grounds available under Section 34 of the Act
- Deference to Tribunal: Courts must defer to arbitral tribunal's view unless perverse
- No Reappraisal: Cannot reappraise evidence or substitute its view
- Better View Not Enough: Cannot set aside merely because appellate court's view is "better"
- Limited Interference: Can only check if court/tribunal acted within prescribed limits
This reinforces the principle of minimal judicial intervention and finality of arbitral awards.
Answer: Yes, under Section 37(2), appeals can be filed against specific orders passed by the Arbitral Tribunal:
- (a) Jurisdictional Orders: When tribunal accepts the plea under Section 16(2) or 16(3) that it does not have jurisdiction - this terminates the arbitration
- (b) Interim Measures: When tribunal grants or refuses to grant interim measures under Section 17
Appeal Lies To: Principal Civil Court (where value is less than jurisdiction of District Court) or High Court (in case of international commercial arbitration or as prescribed)
Important Note: Not all tribunal orders are appealable - only these specific orders can be challenged under Section 37(2).
Answer: If an appeal is filed after the prescribed limitation period:
- Application Required: Must file application for condonation of delay under Section 5 of Limitation Act
- Burden of Proof: Party must prove "sufficient cause" for the delay
- Factors Considered:
- Length of delay (short vs. long)
- Reasons for delay (bona fide or negligence)
- Conduct of party
- Prejudice to other party
- Short Delays: May be condoned if sufficient cause shown
- Long Delays: Generally not condoned, especially beyond 120 days
- If Rejected: Appeal is dismissed as time-barred, and the original order becomes final
Answer: In an appeal under Section 37 against orders under Section 34, the grounds are limited to those specified in Section 34 itself:
- Incapacity: Party was under incapacity
- Invalid Agreement: Arbitration agreement not valid under applicable law
- Lack of Notice: Party not given proper notice of arbitration proceedings
- Beyond Scope: Award deals with disputes beyond the arbitration agreement
- Improper Composition: Composition of tribunal or procedure not in accordance with agreement
- Non-Arbitrability: Subject matter not capable of settlement by arbitration
- Public Policy: Award in conflict with public policy of India, including:
- Fraud or corruption
- Violation of fundamental policy of Indian law
- Contrary to justice or morality
- Patent illegality appearing on face of award
Important: Mere errors of law or fact are NOT grounds for setting aside unless they constitute patent illegality.
Answer: Section 37 is crucial for the arbitration framework in India for several reasons:
- Balance: Balances finality of arbitration with judicial oversight
- Limited Intervention: Ensures minimal court interference as per UNCITRAL Model Law
- Prevents Abuse: Provides remedy against erroneous judicial orders without opening floodgates
- Finality: Prohibition of second appeal ensures quick resolution
- Efficiency: Strict limitation periods promote speedy disposal
- Certainty: Exhaustive list of appealable orders provides certainty to parties
- Pro-Arbitration: Supports arbitration as effective alternative to litigation
- International Standards: Aligns with international best practices
- Investment Climate: Enhances India's attractiveness for commercial arbitration
Overall, Section 37 is a carefully calibrated provision that protects parties' rights while respecting arbitration's autonomy.
