2002 (1) TMI 1251 - HC - Companies Law

Summary

Issues Involved:
1. Maintainability of appeals under Section 37 of the Arbitration and Conciliation Act, 1996.
2. Nature of orders passed by the sole arbitrator and their classification under Section 17 of the Act.
3. Procedural aspects and the role of experts in arbitral proceedings.

Issue-wise Detailed Analysis:

1. Maintainability of Appeals under Section 37 of the Arbitration and Conciliation Act, 1996:
The primary issue is whether the appeals filed under Section 37 of the Act are maintainable. The court examined whether the orders dated 19-8-2001 and 10-9-2001 issued by the sole arbitrator qualify as orders granting or refusing to grant an interim measure under Section 17 of the Act. Section 37(1) specifies the orders from which an appeal can lie, emphasizing that appeals are limited to orders granting or refusing interim measures under Section 9, setting aside or refusing to set aside an arbitral award under Section 34, and certain orders of the arbitral tribunal under Section 16 and Section 17. The court concluded that the orders in question do not fall under these categories, thus rendering the appeals non-maintainable.

2. Nature of Orders Passed by the Sole Arbitrator and Their Classification under Section 17 of the Act:
The court analyzed whether the orders/findings of the sole arbitrator on 19-8-2001 and 10-9-2001 could be considered as interim measures of protection under Section 17. The appellant argued that these orders were part of the proceedings initiated under Section 17 and were thus appealable. However, the court found that these orders were procedural in nature and related to the appointment and actions of experts, rather than interim measures of protection. The court emphasized that the orders were not final and did not grant or refuse any interim relief, hence they could not be classified under Section 17.

3. Procedural Aspects and the Role of Experts in Arbitral Proceedings:
The court examined the procedural aspects related to the appointment of experts and the objections raised by the appellant regarding the report submitted by Ernst & Young. The appellant contended that the review was conducted by S.R. Batliboi & Co., not Ernst & Young, and that the sole arbitrator's findings were erroneous. The court noted that the sole arbitrator had appointed Ernst & Young by consent of the parties and had the authority to appoint experts under Section 26 of the Act. The court held that the findings of the sole arbitrator regarding the expert report were procedural and did not constitute interim measures of protection under Section 17.

Conclusion:
The court concluded that the appeals were misconceived and not maintainable under Section 37 of the Act, as the orders in question were procedural and did not qualify as interim measures of protection under Section 17. The court emphasized the objective of the Act to minimize judicial intervention in arbitral proceedings and dismissed the appeals with costs. The interim orders dated 19-9-2001 were vacated.