Arbitration gives parties a private process for resolving civil disputes, primarily commercial disputes, without going through a full civil trial. However, an arbitral tribunal's decision is not beyond judicial review. In certain situations, a party can approach a court to challenge an arbitral award or appeal an order passed during the course of arbitration proceedings. Section 37 arbitration is important because it provides a statutory appeal against several orders specified under Section 37 passed by courts and arbitral tribunals.
Under the Arbitration and Conciliation Act, 1996 ( hereinafter referred to as the A&C Act), Section 37 identifies the orders that are appealable. These include certain orders under Sections 8, 9, and 34, as well as orders passed by an arbitral tribunal under Sections 16 and 17.
When can an arbitration order be challenged before a higher court? The answer depends on the order's nature, the authority that issued it, and the available legal remedy. The Arbitral Award passed by the Arbitral Tribunal, rather it is akin to a decree of a court, containing facts, analysis of evidence, findings, and the conclusion,n i.e., the outcome of the arbitration proceedings. Therefore, an arbitral award as such cannot be called an appealable order and therefore cannot be the subject matter of appeal under Section 37; however, that does not mean that there will not be any judicial scrutiny of the award and the award is something carved in stone. For that purpose, the A&C Act contemplates a different mechanism of judicial review, i.e., through Section 34 of the A&C Act.
An arbitral tribunal may issue various orders during arbitration on jurisdiction, interim measures, evidence, hearings, or other procedural matters; Section 377 of the A&C Act provides a limited judicial scrutiny of such procedural orders. While Section 3 addresses applications to challenge an arbitral award after the award has been passed, Section 37 specifies the orders passed during the life cycle of arbitral proceedings, against which an appeal may be maintained in the Court of Law.
Can an Arbitral Award Be Challenged?
Yes. An arbitral award can be challenged before the competent court under Section 34 of the A&C Act, having said that it is important to keep in mind that the scope of such challenge is extremely limited and therefore, Section 34 does not turn the court into a regular appellate forum for the entire arbitration.
What order can be challenged under section 37 of the A&C Act?
To answer the above question, it becomes imperative to read the text of section 37 of the A&C Act:-
- Notwithstanding anything contained in any other law for the time being in force, an appeal shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely:
(a) refusing to refer the parties to arbitration under section 8;
(b)granting or refusing to grant any measure under section 9;
(c)setting aside or refusing to set aside an arbitral award under section 34.
(2) 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;
(b) granting or refusing to grant an interim measure under section 17.
(3) 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.
Perusal of the text of section 37 of the A&C Act makes it abundantly clear that only the orders which are mentioned in section 37 of the A&C Act alone are appealable and beyond such orders no order is appealable. Sub-section 37 (1) deals with orders which are passed by the courts and not by the tribunal, while sub-section 37(2) exclusively deals with orders passed by the Arbitral Tribunal.
Thus, an appeal may be filed against certain orders passed by the court, including:
- An order refusing to refer parties to arbitration under Section 8; however, referring the parties to arbitration is not appealable;
- An order granting or refusing an interim measure under Section 9; and
- An order setting aside or refusing to set aside an arbitral award under Section 34.
Therefore, a Section 37 appeal can arise before an arbitral award is made as well as after a Section 34 decision.
Can an Arbitral Tribunal's Order Be Appealed Under Section 37?
Yes, but only for the specific orders listed in Section 37(2).
These include:
- An order passed regarding tribunal jurisdiction under sub-section 16(2)
- An order passed regarding exceeding the arbitral tribunal's scope of authority under sub-section 16(3); and
- An order granting or refusing an interim measure under Section 17.
Other orders are not appealable under Section 37.
When Is section 37 arbitration Available After a Section 34 Decision?
A Section 34 decision is one of the most common situations involving Section 37 arbitration.
If a court sets aside an arbitral award, the affected party may appeal under Section 37. If the court refuses to set aside the award, the party seeking annulment may also have a statutory right to appeal. However, it has to bare in mind that challenging order passed by the Court under section 34 before the higher court under section 37 will not enlarge the scope of appeal, the court deciding an appeal under section 37 against an order passed under section 34 has to decide the appeal within the narrow grounds of challenge to award mentioned under section 34 of A&C Act, meaning thereby the court exercising appellate jurisdiction under section 37 of A&C Act cannot venture out to reappreciate the evidence and substitute its opinion in place of the decision of the arbitral tribunal just because such opinion is plausible, unless the decision of the arbitral suffers from any of the infirmities mentioned in sub-section 2 & 2(A) of section 34.
What Is the Difference Between Section 34 and Section 37?
A Section 34 arbitration proceeding asks the court to set aside an arbitral award on recognized statutory grounds.
Section 37 creates a specific right of appeal against certain orders.
The structure can be understood simply:
Section 8 order → Section 37 appeal may be available.
Section 9 order → Section 37 appeal may be available.
Final arbitral award → Section 34 challenge may be available.
Section 34 order → Section 37 appeal may be available.
Specified Section 16 order → Section 37(2) appeal may be available.
Section 17 order → Section 37(2) appeal may be available.
This makes it important to determine the exact order before selecting a legal remedy.
What Is the Limitation Period for a Section 37 Appeal?
The Arbitration and Conciliation Act does not prescribe a separate limitation period for every Section 37 appeal.
Section 43 makes the Limitation Act, 1963 applicable to arbitration proceedings. Depending on the appellate route, Articles 116 and 117 of the Limitation Act may provide 90 days for an appeal to the High Court or 30 days for an intra-High Court appeal.
For certain commercial disputes, Section 13(1-A) of the Commercial Courts Act may prescribe a 60-day limitation period for appealing a judgment or order.
Therefore, the limitation period must be determined based on the type of order, the appellate forum, and the statute governing the appeal. It should not be treated automatically as the same three-month period applicable to a Section 34 application.
Can a Party Directly Approach the High Court Against an Arbitrator's Order?
Not against every order.
Section 37(2) applies only to specified tribunal orders, including certain jurisdictional orders under Section 16 and interim-measure orders under Section 17.
Other procedural decisions may not be immediately appealable. Before filing a High Court arbitration appeal, a party should identify the provision under which the order was issued and confirm that Section 37 permits an appeal.
What Grounds Can Be Used to Challenge an Arbitral Award?
A challenge to an arbitral award proceeding under Section 34 must be based on a recognised statutory ground.
1. Lack of a Valid Arbitration Agreement
If the arbitration agreement is invalid or a party was not legally bound by it, this may constitute a ground for challenging the award.
2. Inability to Present the Case
Serious procedural unfairness or denial of a reasonable opportunity to present a case may be relevant.
3. Tribunal Acting Beyond Its Authority
If the tribunal decides matters outside the scope of the arbitration agreement or the reference, the affected portion of the award may be challenged.
4. Conflict With Public Policy
An award may be challenged where it falls within the statutory meaning of a conflict with India's public policy.
5. Patent Illegality
For a domestic award, patent illegality on the face of the award can provide a ground under Section 34(2A). However, not every legal or factual error amounts to patent illegality.
Can the Supreme Court Hear an Arbitration Appeal?
Yes, but the route is different from an ordinary second appeal.
Section 37(3) provides that no second appeal lies from an order passed in an appeal under Section 37. However, the provision preserves the right to approach the Supreme Court.
An appropriate matter may therefore reach the Supreme Court under Article 136 of the Constitution via a Special Leave Petition.
This is a discretionary jurisdiction, not an automatic right to have the arbitration dispute reheard. A party considering a Supreme Court arbitration appeal should therefore understand that this stage differs from the statutory appeal under Section 37.
Is Every Arbitration Order Open to Challenge?
No.
The Arbitration and Conciliation Act adopts a limited-intervention approach. Section 5 restricts judicial intervention to situations the Act provides for.
The practical sequence may be:
Section 8 order → Check Section 37.
Section 9 order → Check Section 37.
Final award → Consider Section 34.
Section 34 order → Consider Section 37.
Specified Section 16 order → Consider Section 37(2).
Section 17 order → Consider Section 37(2).
Section 37 decision → No second appeal under the Arbitration Act, but the Supreme Court's jurisdiction remains available in an appropriate case.
What Is the Time Limit for Challenging an Arbitral Award?
The limitation period for a Section 34 challenge differs from that applicable to a Section 37 appeal.
Section 34(3) generally requires that an application to set aside an arbitral award be filed within three months of the date the party received the award. The court may allow a further period of up to 30 days if sufficient cause is shown, but not thereafter.
Section 37 appeals are subject to the applicable limitation provisions discussed above. Because the period can vary by the type of appeal, limitation should be calculated separately for each proceeding.
Does Filing a Challenge Automatically Stop Enforcement?
No.
Filing a challenge to an arbitral award does not, by itself, automatically render the award unenforceable.
Section 36 sets forth the framework for enforcement and the stay of enforcement. A party seeking to prevent enforcement should consider whether a separate stay application is required.
Similarly, filing an appeal does not necessarily mean that enforcement has automatically ceased.
What Should a Party Do After Receiving an Unfavourable Order?
A party that receives an unfavourable arbitration order should act promptly.
The legal team should check:
- What type of order has been passed?
- Was it passed by a court or arbitral tribunal?
- Does Section 37 specifically provide an appeal?
- Which court has jurisdiction?
- When was the order received or pronounced?
- Which limitation provision applies?
- Does the Commercial Courts Act apply?
- Is a stay of enforcement required?
- What legal grounds support the appeal?
These questions can help determine whether an appeal is available and whether any limitation issue exists.
Why Legal Advice Matters in Arbitration Challenges
Arbitration appeals are governed by specific statutory provisions and procedural requirements. The right to appeal depends heavily on the specific order entered.
A party challenging a Section 34 decision may have a Section 37 remedy, whereas another procedural order may not be immediately appealable.
The limitation period must also be checked under the applicable law rather than assumed to apply.
This is especially important in commercial disputes involving financial claims, construction contracts, shareholder disputes, infrastructure projects, supply agreements, and other business arrangements.
An arbitration lawyer can review the order, identify the relevant statutory provision, calculate the applicable statute of limitations, and assess whether the proposed appeal has a recognized legal basis.
Final Words
An arbitration decision cannot ordinarily be appealed to a higher court simply because a party disagrees with the outcome. Indian arbitration law provides specific statutory routes for judicial review, and Section 37 Arbitration Act plays an important role at several stages of an arbitration dispute.
Section 37 is not limited to appeals arising after a Section 34 challenge. It also covers certain orders refusing to refer to arbitration under Section 8, granting or refusing interim measures under Section 9, and specified orders issued by an arbitral tribunal under Sections 16 and 17.
A party considering an appeal should identify the exact order, the applicable statutory provision, the correct appellate forum, and the limitation period before taking further action. In commercial matters, the 60-day period under the Commercial Courts Act may apply, whereas Articles 116 and 117 of the Limitation Act may govern other Section 37 appeals.
The right remedy and timely filing can be decisive in protecting a party's position in arbitration.