Summary
The Supreme Court upheld the High Court’s power to recall an arbitrator’s appointment made during a Section 9 hearing on an unauthorised municipal officer’s consent. The contractual clauses provided internal dispute resolution, not arbitration, and the officer could not create a separate arbitration agreement. As no arbitration agreement arose, the Arbitration Act’s restriction on judicial intervention did not apply. Interim protection against encashment continued for four weeks to permit recourse to the appropriate forum.
Issues
- Whether the contractual internal dispute process constituted an arbitration agreement.
- Whether an unauthorised officer’s consent supported the appointment.
- Whether the High Court could recall the appointment notwithstanding the Arbitration Act.
Provisions considered
- Article 215, Constitution of IndiaAs a superior court of record, the High Court possessed inherent jurisdiction to recall its orders and correct apparent errors. (¶¶ 11, 13, 14)
Held
- The contract expressly excluded arbitration. The alternative clause provided an internal committee process and recourse to competent Mumbai courts; it did not constitute an agreement to arbitrate. (¶¶ 3, 4, 10)
- The arbitrator was appointed during a Section 9 hearing on the municipal officer’s consent, independently of either contractual clause. His lack of authority was undisputed, so that consent could not create an arbitration agreement. (¶¶ 5, 6, 10)
- The High Court’s power to recall its own order inhered in its status as a court of record. The Arbitration Act did not bar recall here because there was no arbitration agreement and the Act therefore did not apply. (¶¶ 11, 13, 14, 15)
- The Division Bench’s contrary judgment was set aside. The earlier interim order was continued for four weeks to enable the respondent to approach the appropriate forum. (¶ 16)
Result
Appeal disposed of by setting aside the Division Bench judgment. Interim order dated 23 June 2017 continued for four weeks.