An order of remand by Court under Sec. 37 of Arbitration Act can be made only in exceptional cases where remand is unavoidable: Supreme Court sends arbitration case back to Bombay High Court for reconsideration
Justices Abhay S Oka & Pankaj Mithal [08-07-2024]

Read Order: Bombay Slum Redevelopment Corporation Private Limited v. Samir Narain Bhojwani [SC- CIVIL APPEAL NO.7247 OF 2024]

LE Correspondent

New Delhi, July 9, 2024: The Supreme Court has set aside an order of the Bombay High Court in an arbitration case between the Bombay Slum Redevelopment Corporation Private Limited and one Samir Narain Bhojwani while remanding the case back to the High Court for fresh consideration. The apex court expressed its “serious concerns” over the practice of arbitral proceedings having become synonymous with very bulky pleadings and evidence and very long, time­consuming submissions, leading to very lengthy awards and a tendency to rely upon a large number of precedents, relevant or irrelevant.

“The result of all this is that we have very long hearings before the Courts in Sections 34 and 37 proceedings,” a Division bench of the top court observed.

The case arose out of an arbitral award in favour of Bhojwani, which was later set aside by a single judge bench of the Bombay High Court under Section 34 of the Arbitration and Conciliation Act, 1996. Bhojwani appealed this order under Section 37 of the Act. A division bench of the High Court then set aside the single judge's order and remanded the case back for reconsideration, without delving into the merits.

The Supreme Court, in its judgment, noted that the High Court's remand order was unwarranted as the single judge had already made an elaborate consideration of the issues while setting aside the arbitral award. The apex court emphasized that the scope of interference under Section 37 is even narrower than under Section 34.

The top court held that an appellate court under Section 37 can remand a case only in exceptional circumstances where it is unavoidable. Routine remand orders would make the arbitral process inefficient and defeat the very purpose of the Arbitration Act to provide an expeditious dispute resolution mechanism.

Given the lack of a reasoned High Court order on merits, the Supreme Court found it inappropriate to exercise jurisdiction under Article 136 to adjudicate the matter. It set aside the division bench's order and requested it to decide the Section 37 appeal on merits after considering the arbitral award and the single judge's decision.

The top court also expressed concern over increasingly lengthy arbitration proceedings and bulky pleadings, evidence and submissions, making the process inefficient. It called upon all stakeholders, especially lawyers, to exercise brevity and restraint to make arbitration an effective tool for expeditious and cost-effective dispute resolution in the spirit of the law.