On September 10, 2018, the Hon’ble High Court of Bombay passed a judgement in the matter of M/s Chandan Builders v. Union of India.

The brief facts are as follows: 

- Dispute arose between the parties in relation to an agreement and it is an undisputed fact that the agreement had an arbitration clause.

- Union of India (“Respondents”) had filed a section 16 application claiming that none of the claims were arbitrable; to which M/s Chandan Builders (“Petitioner”) had filed their oppositions.

- Parties granted the arbitrator time to pass an appropriate order.

- The arbitrator passed an order in the nomenclature of an award holding that none of the claims of the Petitioner were arbitrable.

- Aggrieved by the award  (/order), the Petitioner preferred a civil appeal under section 37(2) of the Arbitration and Conciliation Act, 1996 (“the Act”) before the learned Extra Joint Ad-hoc District Judge, Pune.

- The civil appeal was rejected as not maintainable  and it was observed by the learned judge that remedy for the Petitioner was to file an application under section 34 for setting aside of the award (/order).

- A Writ was preferred to the Bombay High Court pursuant to the order of the learned District Judge. 

It was held that, “Merely because the parties had granted extension of time to the learned arbitrator to pass an award would not indicate that the order passed by the learned arbitrator was an arbitral award. Learned arbitrator has not dealt with the claims of the petitioner on merit nor has passed such an order after considering any written statement.” (Para 7)

Also, “If any plea of jurisdiction raised under Section 16 is accepted, the arbitral proceedings have to be terminated, if nothing survives in the proceedings. The remedy of other party would be only to file an appeal under Section 37(2)(a) of the said Act. In my view, the plea of jurisdiction raised by the respondent and accepted by the learned arbitrator cannot amount to an arbitral award within the meaning of an arbitral award under Section 2(1)(c) of the said Act. The arbitral proceedings stood terminated and no claims were left to be determined on the merits.” (Para 8) and “the petitioner had rightly filed an appeal under Section 37(2)(a) of the said Act.” (Para 11)