Writ petitions against Section 37 arbitration orders maintainable despite second-appeal bar, Odisha HC holds

The judgment concerned nine writ petitions involving challenges to orders passed by District Judges exercising appellate jurisdiction under Section 37(1) of the Arbitration and Conciliation Act, 1996 (“1996 Act”).

In the underlying proceedings, arbitral awards had been challenged before the Commercial Courts under Section 34 of the 1996 Act, and the orders of those courts were thereafter challenged before the respective District Judges under Section 37(1).

The present petitions were filed under Articles 226 and 227 of the Constitution against the orders passed in those Section 37 appeals.

The respondents raised a preliminary objection that Section 37(3), which bars a second appeal except an appeal to the Supreme Court, rendered the writ petitions impermissible appeals in disguise and therefore not maintainable.

The Court confined its consideration to this preliminary issue and expressly left the merits of the individual petitions undecided.

1. Whether a writ petition under Articles 226 and 227 of the Constitution is maintainable against an order passed by a District Judge under Section 37(1) of the 1996 Act, notwithstanding the bar on a second appeal under Section 37(3)?

2. Whether Sections 5 and 37 of the 1996 Act restrict or exclude the High Court’s constitutional jurisdiction under Articles 226 and 227?

3. If such petitions are maintainable, what is the permissible scope of the High Court’s supervisory interference under Article 227?

Section 5 of the 1996 Act restricts judicial intervention in arbitration matters to instances provided under Part I of the Act, while Section 37 creates a limited statutory appellate remedy and Section 37(3) bars a second appeal except to the Supreme Court.

However, the constitutional jurisdiction of the High Court under Articles 226 and 227 cannot be curtailed by ordinary legislation; a writ petition is not an appeal and may be entertained in exceptional cases involving jurisdictional error, patent illegality, perversity, breach of natural justice or egregious injustice.

Relying on Nivedita Sharma v. Cellular Operators Association of India, Thansingh Nathmal v. Superintendent of Taxes, Deep Industries Ltd. v. ONGC, Bhaban Construction v. Sardar Sarovar Narmada Nigam Ltd., Punjab State Power Corporation Ltd. v. EMTA Coal Ltd., and Surender Kumar Singhal v. Arun Kumar Bhalotia, the Court held that Article 227 remains available against orders passed under Section 37, but must be exercised with extreme circumspection and only where the order is patently without jurisdiction or suffers from manifest illegality.

The Court also relied on the Supreme Court’s orders in National Aluminium Company Ltd. v. M/s. Maheswari Brothers Coal Ltd. and United India Insurance Company Ltd. v. Odisha Hydro Power Corporation Ltd., which recognized the availability of an Article 226/227 remedy against orders passed under Section 37.

The Court distinguished a statutory second appeal from constitutional judicial review.

Although Section 37(3) prevents a further statutory appeal against an order passed under Section 37, it does not extinguish the High Court’s power under Articles 226 and 227, which derives directly from the Constitution.

The non-obstante clause in Section 5 operates against intervention by a “judicial authority” within the statutory scheme, but cannot reduce the High Court, while exercising constitutional jurisdiction, to an ordinary appellate or statutory authority.

At the same time, the Court emphasized that unrestricted interference would undermine the legislative policy of finality and expedition in arbitration proceedings.

Therefore, the writ jurisdiction may be invoked, but Article 227 review is confined to exceptional cases involving patent lack of jurisdiction, demonstrable perversity, manifest illegality or violation of natural justice, and cannot be used for routine reappreciation of facts or as a substitute for a second appeal.

The Supreme Court’s subsequent orders permitting parties to approach the High Court under Articles 226 and 227 further supported this conclusion.

The Court clarified that maintainability did not imply an unrestricted appellate review; interference would remain limited to exceptional jurisdictional or manifest legal errors.

No finding was made on the merits of any individual writ petition.

The matters were directed to be listed before the regular assigned Bench on 5 October 2026, and interim orders already operating in the respective petitions were continued until the next date.