Supreme Court: In an appeal arising from Madras High Court’s judgment dated 3 February 2023, dismissing a civil revision petition filed by the appellant challenging an arbitral award on the ground that appropriate remedy lays under the Arbitration and Conciliation Act, 1996 (Arbitration and Conciliation Act) and not under Article 227 of the Constitution of India, the Division Bench of Sanjay Karol* and Vipul M. Pancholi, JJ., affirmed the impugned order, holding that the appropriate relief for a legal representative to challenge an arbitral award was under Section 34, Arbitration and Conciliation Act and not under Article 227 or Section 115, Civil Procedure Code, 1908 (CPC). The Court also reaffirmed that the Arbitration Act is a self-contained code and that judicial interference outside its framework is permissible only in exceptional circumstances.
Read More: Arbitration Appellate Tribunals and Section 34: Balancing Speed, Finality, and Certainty
Factual Matrix
A deed of agreement for sale dated 20 April 2007 was executed between appellant’s paternal uncle (deceased) and Respondent 1 for sale of the subject property. Shortly thereafter, appellant’s uncle died on 28 July 2007.
Subsequently, in 2011, Respondent 1 initiated arbitration proceedings alleging breach of the agreement. These proceedings were instituted against Respondent 2, who was projected as the legal representative of the deceased. The appellant’s consistent stand has been that such representation was false and unauthorised.
The sole arbitrator passed an award dated 21 February 2011 directing Respondent 2 to execute the sale deed in favour of Respondent 1. Thereafter, execution proceedings were initiated on 10 August 2011.
The appellant claimed that he became aware of the arbitration proceedings only on 28 August 2012. He was impleaded in the execution proceedings pursuant to an order dated 14 September 2021 passed by the High Court.
Parallelly, the appellant had earlier instituted a partition suit concerning ancestral properties. In that suit, a preliminary decree dated 2 January 2018 declared his entitlement to a 1/3rd share in the subject property.
In the meantime, the appellant had challenged the arbitral award through a civil revision petition under Article 227, which was dismissed by the High Court, giving rise to the present appeal.
Issue for Determination
Whether a legal representative aggrieved by an arbitral award must seek recourse under Section 34, Arbitration and Conciliation Act, or can invoke Article 227 or Section 115 CPC to challenge such an award?
Parties’ Contentions
The appellant contended that he was the sole surviving legal heir of the deceased, who died unmarried and issueless. The arbitral award stands vitiated as he was never impleaded or heard in the arbitration proceedings despite having a substantial interest in the property. Further, the arbitrator failed to conduct any enquiry into whether Respondent 2 was genuinely the legal representative. Since he was not a party to the arbitration proceedings, he could not invoke Section 34, Arbitration and Conciliation Act; hence, the only available remedy was under Article 227.
However, Respondent 3 argued that the appellant himself claimed to be the legal heir of the deceased and in such circumstances, the appropriate statutory remedy is under Section 34, Arbitration and Conciliation Act not Article 227. It was emphasised that arbitration law provides a complete mechanism for challenge.
On the other hand, the Amici Curiae suggested that there was no binding arbitration agreement between the parties and the award may not be enforceable against successors-in-interest.
Analysis and Reasoning
At the outset, the Court chose to confine itself to the legal issue of maintainability and not delve into the merits of the arbitration agreement.
The Court stated that the Arbitration and Conciliation Act was a self-contained and complete Code, and Section 34 provided the exclusive mechanism for challenging an arbitral award. The use of the word “only” in Section 34(1) underscored the legislative intent that recourse against an award must be strictly in accordance with that provision.
Referring to Bhaven Construction v. Sardar Sarovar Narmada Nigam Ltd., (2022) 1 SCC 75, the Court reiterated that judicial interference outside the framework of Section 34 was permissible only in “exceptional rarity”, particularly where a party is rendered remediless or where there is manifest bad faith.
Interpretating the term “party” and as to whether legal representatives fall within its ambit, the Court examined definition under Sections 2(1)(g), 35 and 40, Arbitration and Conciliation Act and held that arbitration proceedings do not abate upon the death of a party, legal representatives “step into the shoes” of the deceased and arbitral awards bind not only the parties but also to “parties claiming under them”.
Thus, the Court reasoned that if legal representatives are bound by an award and can enforce it, they must equally possess the right to challenge it under Section 34. Denying such a right would defeat the object of the Act and leave them remediless despite being saddled with liability.
The Court also noted the inconsistency in the appellant’s stand, on one hand claiming to be the sole legal heir, and on the other disclaiming representation of the estate, which further weakened his case.
Decision
The Court upheld the impugned order dismissing the civil revision petition, holding that it was correct in law. Accordingly, the appeal was dismissed with liberty to appellant to exercise his remedies under the Arbitration and Conciliation Act. It was clarified that limitation for filing such petition should run from the date of this judgment.
Also Read: Section 34(4) and the Power to Remit: Where Did the Law Finally Settle?
[V.K. John v. S. Mukanchand Bothra, 2026 SCC OnLine SC 640, decided on 20-4-2026]
*Judgment by Justice Sanjay Karol
Buy Arbitration and Conciliation Act, 1996 HERE
Buy Constitution of India HERE
