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2021 (2) TMI 510 - SUPREME COURTCondonation of delay in filing an application u/s 34 of the Arbitration Act, 1996 - appealable order or not - whether a learned single Judge’s order refusing to condone the Appellant’s delay in filing an application under section 34 of the Arbitration and Conciliation Act, 1996 is an appealable order under section 37(1)(c) of the said Act? HELD THAT:- The “effect doctrine” referred to in ESSAR CONSTRUCTIONS VERSUS NP. RAMA KRISHNA REDDY [2000 (5) TMI 1062 - SUPREME COURT] is statutorily inbuilt in section 37 of the Arbitration Act, 1996 itself. For this purpose, it is necessary to refer to sections 37(1)(a) and 37(2)(a). So far as section 37(1)(a) is concerned, where a party is referred to arbitration under section 8, no appeal lies. This is for the reason that the effect of such order is that the parties must go to arbitration, it being left to the learned Arbitrator to decide preliminary points under section 16 of the Act, which then become the subject matter of appeal under section 37(2)(a) or the subject matter of grounds to set aside under section 34 an arbitral award ultimately made, depending upon whether the preliminary points are accepted or rejected by the arbitrator. It is also important to note that an order refusing to refer parties to arbitration under section 8 may be made on a prima facie finding that no valid arbitration agreement exists, or on the ground that the original arbitration agreement, or a duly certified copy thereof is not annexed to the application under section 8. In either case, i.e. whether the preliminary ground for moving the court under section 8 is not made out either by not annexing the original arbitration agreement, or a duly certified copy, or on merits – the court finding that prima facie no valid agreement exists – an appeal lies under section 37(1)(a). Likewise, under section 37(2)(a), where a preliminary ground of the arbitrator not having the jurisdiction to continue with the proceedings is made out, an appeal lies under the said provision, as such determination is final in nature as it brings the arbitral proceedings to an end. However, if the converse is held by the learned arbitrator, then as the proceedings before the arbitrator are then to carry on, and the aforesaid decision on the preliminary ground is amenable to challenge under section 34 after the award is made, no appeal is provided. The question of law is answered by stating that an appeal under section 37(1)(c) of the Arbitration Act, 1996 would be maintainable against an order refusing to condone delay in filing an application under section 34 of the Arbitration Act, 1996 to set aside an award - impugned judgment of the Division Bench under appeal is set aside, and the matter is remitted to a Division Bench of the High Court of Delhi to decide whether the Single Judge’s refusal to condone delay is or is not correct. Appeal allowed.
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