1. With the consent of the parties, all the aforesaid Petitions were
taken up together for hearing. Since they arise out of the same
Impugned Order and involve substantially similar grounds and issues,
this Court proceeds to adjudicate them by way of the present
consolidated judgment.
2. These Petitions have been filed under Section 34 of the
Arbitration and Conciliation Act, 19961 assailing the Orders dated
25.07.2025, 22.09.2025 and 09.10.20252 passed by the Learned Sole
Arbitrator, in arbitral proceedings titled "M/S Regency Jewellers and
twenty-five others (Batch-A &B)" and "Asian Hotels (North) Ltd.
AND Asian Hotels (North) Ltd (Batch-C) and Madonna's".
3. All the Petitions, namely, O.M.P. (COMM) 449/2025, O.M.P.
(COMM) 460/2025 and O.M.P. (COMM) 475/20253, arise out of
the same arbitral proceedings and challenge the same Impugned
Orders. The Petitioners in the present Petitions, namely, H.S. Nag and
Ors., Ajay Kumar Rastogi and Late Meena Rastogi through LRs4,
respectively, belong to the same Batch of claimants, i.e., Batch B,
before the Arbitral Tribunal.
4. It is common ground that all the Petitioners had initially sought
identical reliefs in their respective Statement of Claims5 and had
thereafter moved applications seeking identical amendments to their
prayer clause of the SOCs.
5. The said applications for amendment, as well as subsequent
review applications, having been disallowed by way of common
orders, which are the Impugned Orders herein, the present Petitions
were connected and taken up together for consideration.
6. Shorn of unnecessary details, the facts leading to the present
Petitions are as follows:
(d) Subsequently, Claimant Nos. 23 to 25 also engaged counsel
appearing for Batch-A. Over time, the composition of the
batches crystallised such that Batch-A comprised Claimant Nos.
1 to 22, Batch-B comprised Claimant Nos. 23 to 25, and Batch-
C comprised Claimant No. 26. One Claimant from Batch-A
later withdrew from the proceedings upon settlement, leaving a
total of 25 claimants before the learned Arbitrator.
(e) The present Petitioners constitute Batch-B and comprise
Claimant No. 23 (Late Meena Rastogi through LRs), Claimant
No. 24 (Ajay Kumar Rastogi), and Claimant No. 25 (H.S. Nag
& Ors.).
(f) During the course of the arbitral proceedings, claimants from
both batches, i.e., Batch-A and Batch-B, filed applications
seeking amendment of their respective SOC, with respect to the
reliefs prayed therein.
(g) On 25.07.2025, when the said applications were taken up for
consideration, learned counsel appearing for Batch-B stated
before the Arbitral Tribunal that the claimants of Batch-B did
not wish to press their application for amendment and intended
to prosecute their claims on the basis of their existing SOC, and
therefore, their application for amendment may not be
considered. The relevant portion of the Order dated 25.07.2025
records the said submissions as follows:
(h) Consequently, by the said order, the learned Arbitrator allowed
the amendment applications filed by Batch-A, permitting
amendment to their SOC, while the application pertaining to
Batch-B was dismissed in view of the statement recorded on
their behalf.
(i) It is the case of the Petitioners that the aforesaid statement was
made due to miscommunication between the Petitioners and
their counsel. According to the Petitioners, they had intended to
seek amendments similar to those sought by Batch-A, except
deletion of the alternate relief, and therefore had never intended
to forgo amendment altogether.
(j) Pursuant to the amended SOC filed by Batch-A, the Respondent
filed its amended Statement of Defence.
(k) By an Order dated 14.08.2025, the learned Arbitrator framed
the Points of Determination and issued directions for filing
affidavits of evidence, lists of witnesses, and fixed the next date
of hearing for 09.10.2025.
(l) Thereafter, on 08.09.2025, the Petitioners filed a fresh
application seeking amendment of their SOC, along with an
amended SOC broadly on the same lines as that permitted in
respect of Batch-A, and requested that the application be taken
up prior to the next scheduled date.
(m) The said application was taken up on 22.09.2025, on which date
the learned Arbitrator rejected the same, inter alia, on the
grounds that the Petitioners had earlier stated that they did not
intend to amend their pleadings and that the application was
belated, having regard to the stage of the proceedings and the
timelines stipulated under Section 29A of the Act. The relevant
portion of the said order passed by the learned Arbitrator is
reproduced herein under for ready reference:
for completion of the "statement of claim and defence". With
consent of the learned Counsel for the parties, the pleadings in
all twenty-six matters of Batch-A and Batch-B (except that of
Claimant no. 14) were treated as completed (subject to filing of
amended statements of Defence and Rejoinders in such wake),
post the order dated 25.07.2025, and Issues were framed on
14.08.2025. Without doubt, this was much beyond the period of
six months stipulated in statute but then this was with consent of
all parties.
8. No doubt, sub-section (3) of Section 29A permits extension
of time for completion of the arbitral process by another six
months but then that is contingent upon both parties acting
together "by consent" at the time when the statutory period of
twelve months is expiring. An arbitral tribunal cannot permit
delays to occur so as to let the period of twelve months to be
frittered away in the hope that both parties would eventually
agree with each other to exercise the discretion to extend by six
months. Unlike the provision in Section 23(4), sub-section (4)
of Section 29A mandates that "if the award is not made within
the period specified in sub-section (1) or the extended period
specified under sub-section (3), the mandate of the arbitrator(s)
shall terminate". These consequences stipulated by law cannot
be ignored. Thus, it is the bounding duty of the arbitral tribunal
to ensure proceedings are held expeditiously and that no party
indulges in dilatory tactics so as to defeat the mandate of law. It
is with this in view that it has been repeatedly impressed upon
the parties to assist for expeditious conclusion of the process,
lastly by directions in (para 11 of) order dated 14.08.2025.
9. There is no inexhaustible right to amend the pleadings, not
the least in arbitral process. The permissibility to "amend or
supplement his claim or defence during the course of the arbitral
proceedings", in terms of subsection (3) of section 23, is subject
to scrutiny by the tribunal which may reject the move if it
"considers it inappropriate to allow the amendment or
supplement having regard to e delay in making it". A liberty was
given by order dated 24.05.2025 in wake of withdrawal of
common applications for amendment to move afresh but the
applicants at hand (Claimant nos. 23 to 25) took a conscious call
and informed on 25.07.2025 that they "wished to prosecute the
Claim on basis of existing pleadings" and so forfeited the said
liberty. The procedural steps of the kind under consideration are
matters which cannot be at the mercy of whims or caprice of a
party. There is no explanation offered as to why these
applications had to be moved in the teeth of earlier such
submissions forfeiting the opportunity. The plea that no
prejudice shall be caused to the Respondent by such application
being entertained because the proceedings are "in their infancy"
10. The submissions that certain reliefs sought by the
Claimants/Applicants have overlapped and thus may not require
adjudication in the form claimed or further that there are certain
mathematical errors by themselves do not justify the
proceedings to be wound back to the initial stages for another
round of amended pleadings to be invited. The overlap and
errors (if any) can always be explained by evidence at trial.
11. For the foregoing reasons, the captioned applications are
found to be unnecessary and portend to dilate and protract the
proceedings and, therefore, dismissed."
(n) Aggrieved thereby, the Petitioners filed an application before
the learned Arbitral Tribunal seeking review of its Orders dated
25.07.2025 and 22.09.2025. The said review application was
rejected by the learned Arbitrator by Order dated 09.10.2025.
The relevant portions of said order dismissing the review
application are reproduced herein under:
7. It is these three Impugned Orders, namely, those dated
25.07.2025, 22.09.2025 and 09.10.2025, which are the subject matter
of challenge before this Court in the present Petitions under Section
34 of the Act.
14. It would be emphasised that procedural orders passed to regulate
the conduct of arbitration, such as those relating to the filing of
pleadings, admission of documents, or other procedural aspects, do
not finally determine any matter in dispute between the parties and,
therefore, do not qualify as arbitral awards.
2023 SCC OnLine Del 1894
15. Learned counsel would therefore submit that since the Impugned
Orders merely reject the Petitioners‟ applications for amendment and
do not adjudicate any substantive issue or claim on merits, the same
are purely procedural in nature and fall outside the ambit of challenge
under Section 34 of the Act.
16. Learned counsel for the Respondent would further place reliance
upon the decision of the Coordinate Bench of this Court in Rhiti
Sports Management Private Limited vs. Power Play Sports & Events
Limited9, to submit that an order can qualify as an arbitral award,
whether final or interim, only if it finally settles a matter in
controversy between the parties.
17. It would be emphasised that procedural orders, which do not
conclusively determine any substantive issue or dispute but merely
regulate the conduct of arbitral proceedings, cannot assume the
character of an arbitral award. Learned counsel would further rely
upon Paragraph No. 23, which draws support from an earlier
Judgement of this Court in Shyam Telecom Ltd. Vs. Icomm Ltd.10, to
submit that an interim award must partake the colour of a final award
inasmuch as it finally determines rights of the parties on a matter in
issue, a test which the Impugned Orders herein clearly fail to satisfy.
18. It would further be contended that the amendments sought by the
Petitioners were, in any event, not substantive in character. In respect
of one the claims, the Petitioners merely sought deletion of the
quantified amount originally pleaded, while in respect of the
remaining claims, the proposed amendments were confined to a
reduction in the quantum of compensation or damages claimed.
2018 SCC OnLine Del 8678
(2010) 116 DRJ 456
19. It would therefore be urged that the rejection of such
amendments neither adjudicates any issue on the merits nor results in
any final determination between the parties. Equally, such rejection
does not foreclose the Petitioners from leading evidence in support of
a claim for a lesser amount than that originally quantified.
20. Learned counsel for the Respondent, to fortify the aforesaid
submission, would draw the attention of this Court to the Order dated
14.08.2025 passed by the Arbitral Tribunal, which preceded the
disallowance of the Petitioners‟ application seeking amendment vide
Order dated 22.09.2025, whereby the Point of Determination
governing the disputes inter se the parties was framed by the learned
Arbitrator.
21. It would be contended that the said Points of Determination were
consciously structured and framed in a manner that rendered the
amendments sought for by the Petitioners wholly redundant and
inconsequential to the adjudication of the disputes. Learned counsel
would, in particular, submit that the Points of Determination framed
do not stipulate any specific rate or quantified amount of damages or
compensation, the same having been deliberately kept open by the
learned Arbitrator to be determined on the basis of evidence adduced
by the parties and the adjudication thereupon.
22. Learned counsel would also bring to the notice of this Court that
the relevant Points of Determination, insofar as they pertain to the
reliefs sought, are expressly marked with the notation "OPC", thereby
unequivocally placing the onus of proof upon the Claimants therein,
namely, the Petitioners.
23. Learned Counsel for the Respondent would further rely upon the
decision of a Coordinate Bench of this Court in Punita Bhardwaj v.
Rashmi Juneja11, wherein the Court was seized of a challenge under
Section 34 of the Act to an order disallowing an application for
amendment of pleading.
24. It would further be contended that an Arbitral Tribunal is
expressly vested with discretion under Section 23(3) of the Act to
refuse amendment or supplementation of pleadings on the ground of
delay. Such rejection, it was urged, is purely procedural in nature and
does not amount to a final adjudication of any substantive rights of the
parties.
25. Learned Counsel for the Respondent would also advert to the
decision in NTPC Ltd. v. L&T & Anr.12, which followed the ratio laid
down in Punita Bhardwaj (supra), wherein this Court declined to
entertain a petition under Section 34 of the Act challenging an order
rejecting an amendment application on the ground of delay, holding
that such an order does not partake the character of an interim award.
26. Learned counsel for the Respondent, applying the aforesaid
principles to facts of the present case, would submit that the learned
Arbitrator rejected the Petitioners‟ applications for amendment solely
on the ground of delay, in exercise of discretion statutorily conferred
under Section 23(3) of the Act, and that such rejection does not finally
determine any claim or defence so as to attract the rigours of Section
34 of the Act.
27. Per contra, learned counsel appearing on behalf of the
Petitioners would submit that the preliminary objection raised by the
Respondent is fundamentally misconceived and rests on a narrow,
hyper-technical construction of the Act. It would be contended that the
2022 SCC OnLine Del 2691
2023:DHC:2154
Respondent, by placing undue emphasis on the nomenclature of the
Impugned Orders as procedural, seeks to elevate form over substance,
while overlooking the legal effect and operative consequences of the
Impugned Orders.
28. Learned counsel for the Petitioners would further submit that the
true test is not the label affixed to the orders, but whether they
conclusively and finally determine substantive rights of the parties,
and in the present case, the Impugned Orders, by irrevocably
foreclosing the Petitioners‟ entitlement to amend their SOC,
decisively affect their rights and the manner in which their claims may
be adjudicated. On this premise, it would be urged that the Impugned
Orders partake the character of interim awards within the meaning of
Section 31(6) of the Act and are, therefore, amenable to challenge
under Section 34 of the Act.
29. In support of the aforesaid submission, learned counsel would
place reliance on the judgment of the Hon‟ble Supreme Court in
Indian Farmers Fertilizer Cooperative Ltd. v. Bhadra Products13
["IFFCO"], to contend that an interim award is not confined to a final
determination of the entire dispute, but may also conclusively decide
any issue or matter forming part of the arbitral proceedings.
30. It would also be submitted that the Hon‟ble Supreme Court has
authoritatively held that the expression "any matter" occurring in
Section 31(6) of the Act is of wide amplitude and includes any point
of dispute between the parties which the Arbitral Tribunal is
competent to finally determine.
31. Relying upon the said principle, learned counsel would contend
that where an order of the Arbitral Tribunal finally and irrevocably
(2018) 2 SCC 534
forecloses a party‟s right to amend its pleadings and pursue its claims
in the manner sought, such an order is not a mere procedural direction,
but one which conclusively determines a matter in issue, and therefore
squarely answers the description of an interim award amenable to
challenge under Section 34 of the Act.
32. Learned counsel for the Petitioners, further addressing the
objection with respect to maintainability, would also rely upon the
Judgement of the Hon‟ble Supreme Court in Lt. Col. H.S. Bedi Retd.
& Ors. v. STCI Finance Ltd.14, to contend that the true test is not the
nomenclature of the order, but its substance and effect. It would be
submitted that the Hon‟ble Supreme Court has held that where an
order passed by the Arbitral Tribunal conclusively determines an issue
or finally affects the rights of the parties, such an order would partake
the character of an interim award, notwithstanding that it is rendered
at an intermediate stage of the arbitral proceedings.
33. Applying the said principle, learned counsel would contend that
the Impugned Orders, by finally rejecting the Petitioners‟ applications
for amendment and thereby foreclosing the Petitioners from pursuing
their claims in the manner sought, conclusively determine a matter in
issue and are thus amenable to challenge under Section 34 of the Act.
34. Learned counsel for the Petitioners would thereafter proceed to
address the merits of the present Petitions and submit that the arbitral
proceedings comprise two distinct sets of claimants, namely, Batch-A
and Batch-B, i.e., the present Petitioners, both of whom had filed
applications seeking amendment of their respective SOC prior to the
framing of issues.
2020:DHC:3495
35. It would be urged that while the amendment applications
preferred by Batch-A were allowed by the learned Arbitrator vide
Order dated 25.07.2025, the applications filed by the Petitioners came
to be rejected. Learned counsel would therefore submit that this has
resulted in manifestly unequal treatment, notwithstanding that the
reliefs sought were substantially similar and the applications were
moved at an identical procedural stage in the arbitral proceedings.
36. Learned counsel for the Petitioners would further submit that the
rejection of the Petitioners‟ amendment applications proceeded on an
erroneous assumption that the Petitioners had undertaken not to seek
any amendment.
37. Learned counsel would submit that such an observation was
founded upon a miscommunication between the Petitioners and their
counsel and that the Petitioners had never intended to forgo
amendment altogether, rather, they had merely indicated that, unlike
Batch-A claimants, they did not seek to incorporate a relief of specific
performance. The impugned rejection, it would be urged, therefore
rests on a mistaken factual premise, which has materially prejudiced
the Petitioners‟ right to pursue their claims in an appropriate and
clarified form, and calls for this Court's intervention under Section 34
of the Act.
38. Learned counsel for the Petitioners would further submit that the
Impugned Orders suffer from patent illegality and therefore warrants
interference of this Court under Section 34 of the Act. It would be
contended that the learned Arbitrator, while dismissing the
amendment applications as well as the subsequent review
applications, passed an inadequately reasoned order, only stating that
the application for amendment of pleading was barred by limitation
and placed undue reliance on Section 29A of the Act and the alleged
time constraints, without appreciating that the arbitral proceedings
were still at a nascent stage.
39. It would also be pointed out that pleadings had been completed
only on 25.07.2025, issues had not been framed at the time of filing
the amendment applications, and the statutory period under Section
29A was available till July 2026, extendable by a further six months.
40. Learned counsel, while concluding, would contend that
permitting the arbitral proceedings to continue without allowing the
Petitioners to amend their claims would render the entire exercise
futile, as the Petitioners would be compelled to prosecute claims on an
artificial footing, ultimately leading to multiplicity of proceedings and
avoidable prejudice. It would, therefore, be submitted that the
Impugned Orders suffer from patent illegality and warrant interference
under Section 34 of the Act.
41. In rejoinder to the preliminary objections, the learned counsel
for the Respondent would further invite the attention of this Court to
the factual matrix and corresponding legal reasoning in H.S. Bedi
(supra) and IFFCO (supra), in order to distinguish the reliance placed
thereon by the Petitioners. Learned counsel for the Respondent would,
therefore, contend that the ratio of the aforesaid decisions cannot be
mechanically invoked, as these cases pertain to orders which
conclusively adjudicated substantive issues between the parties.
42. Learned counsel for the Respondent would further place a
negative reliance upon the decision of this Court in Cinevistaas Ltd. v.
Prasar Bharti15 to contend that the Court has exercised caution in
treating an order rejecting an amendment application as an interim
2019 SCC OnLine Del 7071
award. It would be submitted that in Cinevistaas (supra), the order
was held to partake the character of an interim award only because the
rejection of the amendment conclusively foreclosed the claim relating
to the quantum sought to be introduced, thereby attaching finality to
that aspect of the dispute.
43. In contradistinction, it would be urged that in the present case,
the Points of Determination framed by the learned Arbitrator
explicitly keep open the question of quantum of damages,
compensation and rate of interest, to be determined on the basis of
evidence led by the parties. The Impugned Orders, therefore, do not
finally extinguish or conclusively decide any quantified claim, but
merely regulate the manner in which the pleadings stand.
Consequently, it was submitted that the reliance on Cinevistaas
(supra) clearly draws the distinction as to why the Impugned Orders
are not to be termed as „interim orders‟.
44. Learned counsel for the Respondent, in the backdrop of these
negative reliances, would contend that the aforesaid decisions, far
from lending support to the Petitioners‟ case, in fact operate to their
detriment.
45. Learned counsel would submit that in aforesaid decisions, the
orders under challenge were found to affect substantive rights of the
parties and to attach finality to distinct components of their claims or
defences, whereas the present matter stands on a different footing,
since the Impugned Orders in the present matter do not conclusively
determine any claim, issue, or substantive right inter se the parties, but
merely decline amendment on procedural considerations. As such,
they remain within the realm of procedural directions and cannot be
elevated to the status of interim awards and hence, fall outside the
ambit of Section 34 of the Act.
46. Further, learned counsel for the Respondent, adverting to the
submissions advanced by the Petitioners on merits, would contend
that the Impugned Orders neither suffer from patent illegality nor can
they be said to be in conflict with the public policy of India.
47. Further, despite such liberty and the opportunities that were
granted, the Petitioners, as recorded in the Order dated 25.07.2025,
expressly stated that they did not wish to amend the SOC and would
proceed on the basis of the pleadings already on record. In this
backdrop, it would be submitted that the rejection of the subsequent
amendment applications on the ground of delay was well within the
discretionary domain of the learned Arbitrator and does not warrant
interference under Section 34 of the Act.
48. Learned counsel for the Respondent would vehemently refute
the allegation of patent illegality and submit that the Impugned Orders
disclose a conscious and reasoned exercise of discretion by the learned
Arbitrator.
49. It would be contended that the Arbitrator did not reject the
amendment applications on a mechanical invocation of limitation, but
after taking into account the stage of the proceedings, the earlier
withdrawal of similar applications, and the express statement of the
Petitioners that they would proceed on the basis of the pleadings
already filed. The reliance placed on Section 29A of the Act by the
Learned Arbitrator, it would be urged, was neither misplaced nor
undue, but reflective of the statutory mandate that arbitral proceedings
be conducted in a time-bound manner and without avoidable delays.
50. Learned counsel for the Respondent, while concluding, would
submit that the application for amendment was in fact filed belatedly
and that the mere fact that pleadings had recently been completed or
that the outer timeline under Section 29A had not yet expired does not
ipso facto confer an unfettered right to amend. The discretion under
Section 23(3) of the Act vests squarely with the Arbitral Tribunal, and
the Petitioners cannot seek to convert a procedural determination into
a jurisdictional error.
51. It would thus be contended that the Impugned Orders neither
disclose perversity nor contravene any fundamental policy of Indian
law. The applications for amendment were filed at a belated stage and
their dismissal on the ground of delay does not merit the interference
of this Court under the circumscribed scope of Section 34 of the Act.
ANALYSIS:
52. Heard the learned counsel for parties at length and, with their
able assistance, perused the material available on record.
53. The aforestated contentions, submissions and reliances of the
learned counsel for both the parties, as noticed hereinabove, crystallise
into a narrow yet determinative jurisdictional issue bearing upon the
maintainability of the present Petitions.
54. The Respondent asserts that the Impugned Orders are in the
nature of procedural directions, which do not attract the interference
of this Court under Section 34 of the Act. The Petitioners, on the other
hand, contend that though coloured as procedural, the Impugned
Orders operate with finality, affecting their substantial rights, thereby
assuming the character of interim awards.
55. In this backdrop, before embarking upon an examination of the
merits, this Court deems it apposite to first address the preliminary
objection as to the maintainability, since the adjudication upon the
merits of the present Petitions necessarily hinges upon whether the
Impugned Orders are amenable to challenge under Section 34 of the
Act.
56. In view of the apparent divergence in approach, discernible from
various precedents and the consequent uncertainty surrounding the
question as to what constitutes an „interim award‟, this Court deems it
apposite to examine the statutory scheme, the governing jurisprudence
as established by various judicial precedents, with some degree of
clarity.
57. Accordingly, the discussion that follows is organised along three
distinct yet interrelated facets, viz., first, the scope and limits of
judicial interference permissible under Section 34 of the Act vis-à-vis
an Order passed in the course of arbitral proceedings; second, the legal
contours and attributes of what constitutes an „Interim Award‟; and
third, whether the Impugned Orders, when examined on the
touchstone of the settled principles, satisfy the parameters so as to fall
within the ambit of an „Interim Award‟ amenable to challenge under
Section 34 of the Act.
Interference under Section 34 of the Act extends to an Arbitral
Award, including an 'Interim Award'
58. It is well settled that the jurisdiction under Section 34 of the Act
is neither appellate nor supervisory in the conventional sense. The
Court does not sit in appeal over the findings of the Arbitral Tribunal,
nor does it re-appreciate evidence or correct errors of fact or law, save
where such errors fall within the narrowly tailored grounds statutorily
prescribed. The provision thus reflects a conscious legislative
departure from expansive judicial review and is rooted in the principle
of party autonomy and finality of arbitral adjudication.
59. The Hon‟ble Supreme Court, inter alia, in a catena of decisions
including Dyna Technology Private Limited v. Crompton Greaves
Limited16, has succinctly crystallised the legal position governing the
scope of interference under Section 34 of the Act. The relevant
observations, in Dyna Technology (supra), which delineate the
contours of judicial review in arbitral matters, are reproduced below for
ready reference:
"24. There is no dispute that Section 34 of the Arbitration Act limits
a challenge to an award only on the grounds provided therein or as
interpreted by various courts. We need to be cognizant of the fact
that arbitral awards should not be interfered with in a casual and
cavalier manner, unless the court comes to a conclusion that the
perversity of the award goes to the root of the matter without there
being a possibility of alternative interpretation which may sustain
the arbitral award. Section 34 is different in its approach and cannot
be equated with a normal appellate jurisdiction. The mandate under
Section 34 is to respect the finality of the arbitral award and the
party autonomy to get their dispute adjudicated by an alternative
forum as provided under the law. If the courts were to interfere with
the arbitral award in the usual course on factual aspects, then the
commercial wisdom behind opting for alternate dispute resolution
would stand frustrated.
25. Moreover, umpteen number of judgments of this Court have
categorically held that the courts should not interfere with an award
merely because an alternative view on facts and interpretation of
contract exists. The courts need to be cautious and should defer to
the view taken by the Arbitral Tribunal even if the reasoning
provided in the award is implied unless such award portrays
perversity unpardonable under Section 34 of the Arbitration Act."
60. Further, Section 2(1)(c) of the Act defines the expression
„Arbitral award‟, which expressly includes interim awards. Section 2
of the Act is reproduced herein under for the sake of clarity:
"2. Definitions. --
(1) In this Part, unless the context otherwise requires, --
(2019) 20 SCC 1
***
(c) "arbitral award" includes an interim award;"
61. A conjoint reading of Section 2(1)(c) and Section 34 of the Act
makes it abundantly clear that the jurisdiction of the Court under
Section 34 extends to the setting aside of an interim award as well,
provided such interim award satisfies the statutory requirements and
falls within the limited grounds expressly enumerated under Section
34 of the Act and their consistent interpretations by the Courts.
62. To complete the scheme of the Act, Section 31(6) of the Act is
also material. It empowers an Arbitral Tribunal to render an interim
award at any stage of the arbitral proceedings, prior to the
pronouncement of the final award, in respect of any matter on which it
may make a final determination. The same is reproduced herein under
for the sake of completeness:
"31. Form and contents of arbitral award. --
*****
(6) The arbitral tribunal may, at any time during the arbitral
proceedings, make an interim arbitral award on any matter with
respect to which it may make a final arbitral award."
63. A holistic reading of the aforesaid statutory provisions leads to
two clear and inescapable conclusions. First, that an Arbitral Tribunal
is vested with the authority to render an interim award during the
pendency of the arbitral proceedings, prior to the culmination of final
adjudication. Second, that such interim awards, being statutorily
subsumed within the definition of an arbitral award, are amenable to
judicial scrutiny under Section 34 of the Act, subject to the same
limited and well-settled grounds on which a final arbitral award may
be interfered with.
64. At the same time, it must be underscored that though the statute
includes an „interim award‟ within the ambit of an arbitral award, it
does not follow that every interlocutory or procedural order passed
during arbitral proceedings partakes such character.
65. However, this statutory inclusion does not efface the fundamental
distinction between a determination that conclusively adjudicates an
issue and, a direction that merely regulates the conduct of
proceedings. It is this nuanced yet decisive distinction that now
warrants closer judicial scrutiny.
Distinction between a Procedural Order and an Interim Award
passed by an Arbitral Tribunal
66. Having thus established that the jurisdiction of this Court under
Section 34 of the Act extends, in principle, to an interim arbitral
award, the enquiry must now turn to the equally significant question,
namely, what, in law, qualifies as an „interim award‟.
67. Further, since the Act does not expressly define what constitutes
an „interim award‟, this Court deems it necessary to advert to the
judicially evolved principles which illuminate its nature, attributes and
legal contours. The classification of an order cannot depend upon
nomenclature alone but must be determined by its substance and legal
effect.
68. The Hon‟ble Supreme Court in IFFCO (supra), while
authoritatively interpreting the expression „interim award‟, held that
an Arbitral Tribunal is empowered under Section 31(6) of the Act to
render an interim award on any matter in respect of which it is
competent to make a final award. The Court clarified that the
expression "any matter" is of wide import and encompasses any point
of dispute between the parties that calls for a definitive adjudication.
69. At the same time, the decision underscores that such a
determination must possess the element of finality in respect of the
issue decided, so as to qualify as an interim award within the statutory
framework. The relevant observations of IFFCO (supra) are extracted
herein under for ready reference:
"8. The language of Section 31(6) is advisedly wide in nature. A
reading of the said sub-section makes it clear that the jurisdiction
to make an interim arbitral award is left to the good sense of the
arbitral tribunal, and that it extends to"any matter" with respect to
which it may make a final arbitral award. The expression "matter"
is wide in nature, and subsumes issues at which the parties are in
dispute. It is clear, therefore, that any point of dispute between the
parties which has to be answered by the arbitral tribunal can be the
subject matter of an interim arbitral award. However, it is
important to add a note of caution. In an appropriate case, the issue
of more than one award may be necessitated on the facts of that
case. However, by dealing with the matter in a piecemeal fashion,
what must be borne in mind is that the resolution of the dispute as
a whole will be delayed and parties will be put to additional
expense. The arbitral tribunal should, therefore, consider whether
there is any real advantage in delivering interim awards or in
proceeding with the matter as a whole and delivering one final
award, bearing in mind the avoidance of delay and additional
expense. Ultimately, a fair means for resolution of all disputes
should be uppermost in the mind of the arbitral tribunal.
9. To complete the scheme of the Act, Section 32(1) is also
material. This section goes on to state that the arbitral proceedings
would be terminated only by the final arbitral award, as opposed to
an interim award, thus making it clear that there can be one or
more interim awards, prior to a final award, which conclusively
determine some of the issues between the parties, culminating in a
final arbitral award which ultimately decides all remaining issues
between the parties."
70. The Hon‟ble Supreme Court, in the aforesaid judgment,
underscored that although arbitral proceedings culminate only upon
the pronouncement of the final award, the statutory scheme
unmistakably contemplates rendering of one or more interim awards
during their pendency. Such interim awards are not mere procedural
directions, rather they are determinations that finally and conclusively
adjudicate specific issues or claims between the parties. The interim
orders decisively settle the discrete facets of the dispute, and thus,
progressively narrow the field of controversy and pave the way toward
the final award.
71. In Cinevistaas (supra), a Coordinate Bench of this Court,
drawing sustenance from the principles enunciated by the Hon‟ble
Supreme Court in Shah Babulal Khimji vs. Jayaben D. Kania17,
elucidated that the determinative touchstone for ascertaining whether
an order of an Arbitral Tribunal qualifies as an „interim award‟ lies in
examining whether the order conclusively determines, or directly and
substantially impacts, the rights of the parties. It was observed that
only such determinations which finally settle a substantive issue or
crystallise a component of the dispute can be elevated to the status of
an interim award. Conversely, orders that merely regulate procedure,
manage the conduct of proceedings, or remain ancillary to the final
adjudication do not acquire the attributes of an interim award. The
relevant paragraph of Cinevistaas (supra) is reproduced below:
"35. Arbitral proceedings are not meant to be dealt with in a
straightjacket manner. Arbitral proceedings cannot also be
conducted in a blinkered manner. There could be various situations
wherein, due to inadvertent or other errors, applications for
amendments/corrections may have to be moved. So long as the
disputes fall broadly within the reference, correction and
amendments ought to be permitted and a narrow approach cannot
be adopted. The principles of Shah Babulal Khimji (supra) would
have greater application in arbitral proceedings as the said
judgment lays down the principle, that the substantive rights
affected ought to be seen, while determining what kind of orders
are challengeable. An interim order of the present kind rejecting a
large number of additional amounts/claims would constitute an
interim award under Section 2(1)(c) of the Act.
36. In the facts of this case, it is clear that the quantification of
claims was done correctly in the notice invoking arbitration, in the
(1981) 4 SCC 8
application under Section 11 as also in the writ petition filed by the
Petitioner. The rejection of the additional claims has in fact
resulted in greater delay rather than expeditious disposal. The bona
fides of the Petitioner are not in question. Rejection of additional
claims by the impugned order have all the trappings of an award
and hence the Section 34 petition is clearly maintainable. On the
basis of the tests laid down in Shah Babulal Khimji (supra), the
rejection of the application to add or expand the amounts claimed
under certain heads results in a conclusive determination that the
said claims cannot be adjudicated. Thus, there is not just formal
adjudication but in fact a final rejection of the said claims. This
constitutes a dismissal of the claims and hence would constitute an
award within the meaning of Section 2(1)(c) of the Act."
(emphasis supplied)
72. Another coordinate bench of this Court, in ONGC Petro
Additions Limited vs. Technimont S.P.A. & Anr.18, has
authoritatively held that the decisive test for determining whether an
order assumes the stature of an interim award hinges upon two
interwoven considerations, viz., (i) the element of finality, and (ii) the
conclusive determination of an issue forming part of the arbitral
reference. The Court clarified that an order would qualify as an
interim award only where it finally and conclusively adjudicates upon
a substantive issue in dispute between the parties. An order may well
attain finality qua the application disposed of by the Tribunal,
however, unless it conclusively resolves a component of the arbitral
controversy itself, it does not satisfy the statutory threshold. The mere
fact that an application stands finally decided does not, by itself,
elevate such determination to the status of an „arbitral award‟ within
the meaning of Section 2(1)(c) of the Act. The relevant extract of the
said judgment is reproduced below:
"13. In the present case, the impugned order does not decide or
finally dispose of any issue. Dr. Singhvi has attempted to
overcome the objection of maintainability by focusing on the
O.M.P. (COMM) 424/2020
question of finality of the decision. He has also relied upon certain
decisions to contend that the right to lead evidence is a valuable
right and is inherently related to due process and fairness in
proceedings. There may not be much quarrel on this proposition n
law, however, the Court has to be mindful of the fact that the order
impugned in the present petition is nothing but a procedural order.
The Arbitral Tribunal while passing such procedural order may
determine certain valuable rights of the parties. However, it does
not mean that such determination renders an order to be an award
within the meaning of Section 2(1)(c) of the Act. The
determination of a valuable right in any legal proceedings would
not necessarily result in an immediate actionable right. In order to
ascertain whether an order is an interim award or partial award, the
two most important factors that would weigh upon the Court are
the concept of "finality" and "issue". If the nature of the order is
"final" in a sense that it conclusively decides an issue in the
arbitration proceedings, the order would qualify to be an interim
award. This is not the situation in the present case. The impugned
order only rejects OPaL‟s application for placing additional
documents on record. It does not decide an issue or the subject
matter of adjudication between the parties. The arbitral tribunal has
only decided the question as to whether the Petitioner would be
permitted to file additional documents at a later stage. The order
impugned though conclusively determines the application,
however, it cannot be said that the subject matter of arbitration and
the rights of the parties in respect thereof have been finally
determined. One cannot ignore the fact there is no provision under
the Act that permits OPaL to challenge a procedural order passed
by the Arbitral Tribunal. For an order to qualify as an "award", the
test of finality is undoubtedly essential, but that does not mean that
any final view of the Arbitral Tribunal would come within the
ambit of an "award". Dr. Singhvi also argued that the Courts
should always step in to advance the cause of justice. He submitted
that there may not be any case law directly dealing with identical
or similar facts but that should not prevent the Court to adopt an
incremental progressive attitude towards development of law. The
argument is outwardly attractive and enchanting but, I feel that
there are no milestones that the Court has to accomplish. The role
of the Court is to interpret the law and apply it to the facts of the
case. Imagine the scenario, where the Court‟s perspective on
growth in law runs counter to the legislative intention that is in
sync with the modern trends. If the Act does not permit a challenge
at this stage, the Court would not take upon itself the burden to
adopt an approach that is perceived to be a rational one. The Court
has the bounden duty to apply the law as it exists and not interpret
it merely because it appears to be a more satisfactory view. I
cannot create an opening, if the door is tightly shut. If the law
permits an entry, only then the Court can decide the extent for
opening the door. The Courts may advance development of law,
but that cannot be achieved by assuming the role of a legislator.
Such move should be well guarded and well considered. It is
critical that Courts do not go beyond the legislative intent. The
Courts would also not remove the deficiencies, if such are shown
to exist in a legislation. It is for the legislature to make amends.
Heavy weight of the claims does not allow the Court to lift the bar
or bend it to suit a particular view. I also have reservations to say
that permitting a challenge to final decisions on procedural aspects
would be a progressive approach. Under the current scheme of the
Act, the intent is clear that such matters be left for the Arbitral
Tribunal to decide. The crux of the matter regarding the question
of maintainability cannot be clouded by reasons and grounds that
touch upon matters of merits. I also cannot see any opening
granted by the Court in Cinevistaas (supra) that can be widened to
allow this petition, no matter how strong the case may be on
merits."
(emphasis supplied)
73. Further, in Goyal MG Gases Pvt. Ltd. (supra), the Division
Bench of this Court reiterated and refined the governing principles for
determining whether an order passed by an Arbitral Tribunal qualifies
as an interim award. It was held that an order can be regarded as an
award or interim award only when it decides a substantive dispute
existing between the parties and bears the attributes of a decision on
the merits. The Court emphasised that to qualify as an award, the
determination must conclusively settle a dispute pertaining to a core
or vital issue forming part of the arbitral reference. The relevant
portion of the said judgment reads as follows:
"20. It is reflecting that an order would said to be an award or
interim award when it decides a substantive dispute which exists
between the parties. It is essential before an order can be
understood as an award that it answers the attributes of the decision
on the merits of the dispute between the parties or accords in
conclusively settling a dispute which pertains to core issue.
Therefore to qualify as an award it must be with respect to an issue
which constitutes a vital aspect of the dispute. As held in the case
of Rhiti Sports the order passed by the arbitral tribunal would have
the attributes of an interim award when same decides the matters of
moment' or disposes of a substantive claim raised by the parties.
Accordingly, an order passed by the Arbitral Tribunal rejecting the
application for impleadment neither decides the substantive
question of law nor touches upon the merits of the case. The
impugned order, as such, has not travelled the distance to answer
the attributes of determination of an issue."
(emphasis supplied)
74. In MBL Infrastructure Limited vs. Rites Limited & Anr.19, the
Division Bench of this Court reiterated the principles as established in
the IFFCO (supra). The relevant paragraph of the said judgment is
reproduced herein under for ready reference:
"45. In our view, the extract from the judgement of the Supreme
Court in IFFCO case (supra) is clear and categoric. A decision of
an Arbitral Tribunal which brings a quietus to an issue before it
and is an order which the Arbitral Tribunal is empowered to pass at
the final stage would constitute an interim award within the
meaning of Section 31(6) as also Section 34 of the Act."
75. The common thread running through the aforesaid decisions is
that the twin pillars of „finality' and „substantive issue determination'
form the bedrock of the test. An order that merely regulates procedure,
even if it affects a valuable right, does not cross the statutory threshold
unless it conclusively determines a substantive component of the
arbitral reference.
76. In view of the foregoing discussion, it stands well settled that an
interim award must bear the hallmark of finality in respect of the issue
it addresses. The determinative consideration is whether the arbitral
tribunal has conclusively adjudicated a substantive component of the
dispute and rendered itself functus officio qua that issue. If nothing
further remains to be decided on that aspect within the arbitral
proceedings, such a determination would fall within the ambit of an
interim award and would be amenable to challenge under Section 34
2023 SCC OnLine Del 2736
of the Act, notwithstanding that the arbitration continues in respect of
other matters.
77. Therefore, the question as to whether an order constitutes an
„interim award‟ is no longer res integra. The determination does not
hinge upon the nomenclature employed by the Arbitral Tribunal, but
upon the substance, effect, and legal consequences of the order in
question. The Court must examine whether the order conclusively
adjudicates a substantive issue between the parties at an intermediate
stage of the proceedings, thereby leaving nothing further to be decided
on that issue.
Nature of the Impugned Orders: Procedural or Interim Award
78. Having delineated the statutory framework and crystallised the
principles as to what constitutes an „interim award‟ within the
meaning of Sections 2(1)(c) and 31(6) of the Act, this Court now
proceeds to examine whether the Impugned Orders, in substance and
effect, meet the settled parameters so as to attract the jurisdiction of
this Court under Section 34 of the Act.
79. In this backdrop, this Court shall now examine the rival
submissions advanced by learned counsel for the parties and the
judicial precedents relied upon by them.
80. Learned Counsel for the Petitioners primarily relied upon the
Judgement of the Hon‟ble Supreme Court in IFFCO (supra) to draw
force from the interpretation of the expression „interim award‟. In this
decision, the order passed by the learned Arbitrator affirming that the
claims of the claimant therein had not become time-barred was held to
be an interim award by the Apex Court. In light of this, the Petitioners
placed reliance on the said decision to substantiate their contention
that the order passed in the present case as well falls within the ambit
of an interim award.
81. However, the reliance placed upon IFFCO (supra), in the
considered view of this Court, is clearly distinguishable on the facts.
In the said case, the arbitral tribunal had framed the issue of limitation
as a preliminary issue and proceeded to finally determine the same.
The decision on limitation conclusively adjudicated upon a
substantive issue, which was framed and decided as a preliminary
issue and therefore attained finality, leaving nothing further for the
Tribunal to decide on that aspect. It was in these circumstances that
the Hon‟ble Supreme Court held that such a determination constituted
an „interim award‟. The relevant portions, specifically Paragraph Nos.
9 to 13, of the said decision are reproduced herein under for ready
reference:
"9. To complete the scheme of the Act, Section 32(1) is also
material. This section goes on to state that the arbitral proceedings
would be terminated only by the final arbitral award, as opposed to
an interim award, thus making it clear that there can be one or
more interim awards, prior to a final award, which conclusively
determine some of the issues between the parties, culminating in a
final arbitral award which ultimately decides all remaining issues
between the parties.
10. The English Arbitration Act, 1996, throws some light on what
is regarded as an interim award under English Law. Section 47
thereof states:
"47. Awards on different issues, & c.--(1) Unless
otherwise agreed by the parties, the tribunal may make
more than one award at different times on different aspects
of the matters to be determined.
(2) The tribunal may, in particular, make an award
relating--
(a) to an issue affecting the whole claim, or
(b) to a part only of the claims or cross-claims submitted
to it for decision.
(3) If the tribunal does so, it shall specify in its award the
issue, or the claim or part of a claim, which is the subject-
matter of the award."
11. By reading this section, it becomes clear that more than one
award finally determining any particular issue before the Arbitral
Tribunal can be made on different aspects of the matters to be
determined. A preliminary issue affecting the whole claim would
expressly be the subject-matter of an interim award under the
English Act. The English Act advisedly does not use the
expression "interim" or "partial", so as to make it clear that the
award covered by Section 47 of the English Act would be a final
determination of the particular issue that the Arbitral Tribunal has
decided.
12. In Exmar BV v. National Iranian Tanker Co., (1992) 1
Lloyd's Rep 169 an interim final award was made, which
contained the decision that it would not issue any such award in the
claimant's favour pending determination of the respondent's
counterclaims. Detailed reasons were given for this decision. The
Judge, therefore, characterised the aforesaid award as an award
finally deciding a particular issue between the parties, and
concluded that as a result thereof, he had jurisdiction to review the
Tribunal's decision.
13. In Satwant Singh Sodhi v. State of Punjab, (1999) 3 SCC
487, an interim award in respect of one particular item was made
by the arbitrator in that case. The question before the Court was
whether such award could be made the rule of the Court separately
or could be said to have been superseded by a final award made on
all the claims later. This Court held:
"6. The question whether interim award is final to the
extent it goes or has effect till the final award is delivered
will depend upon the form of the award. If the interim
award is intended to have effect only so long as the final
award is not delivered it will have the force of the interim
award and it will cease to have effect after the final award
is made. If, on the other hand, the interim award is
intended to finally determine the rights of the parties it
will have the force of a complete award and will have
effect even after the final award is delivered. The terms of
the award dated 26-11-1992 do not indicate that the same
is of interim nature."
On the facts of the case, the Court then went on to hold:
"11. This Court in Rikhabdass v. Ballabhdas, AIR 1962
SC 551 held that once an award is made and signed by the
arbitrator, the arbitrator becomes functus officio. In
Juggilal Kamlapat v. General Fibre Dealers Ltd., AIR
1962 SC 1123 this Court held that an arbitrator having
signed his award becomes functus officio but that did not
mean that in no circumstances could there be further
arbitration proceedings where an award was set aside or
that the same arbitrator could never have anything to do
with the award with respect to the same dispute. Thus, in
the present case, it was not open to the arbitrator to
redetermine the claim and make an award. Therefore, the
view taken by the trial court that the earlier award made
and written though signed was not pronounced but
nevertheless had become complete and final, therefore,
should be made the rule of the court appears to us to be
correct with regard to Item 1 inasmuch as the claim in
relation to Item 1 could not have been adjudicated by the
arbitrator again and it has been rightly excluded from the
second award made by the arbitrator on 28-1-1994. Thus
the view taken by the trial court on this aspect also appears
to us to be correct. Therefore, the trial court has rightly
ordered the award dated 28-1-1994 to be the rule of the
court except for Item 1 and in respect of which the award
dated 26-11-1992 was ordered to be the rule of the court."
It is, thus, clear that the first award that was made that finally
determined one issue between the parties, with respect to Item 1 of
the claim, was held to be an interim award inasmuch as it finally
determined Claim 1 between the parties and, therefore, could not
be re-adjudicated all over again."
(emphasis supplied)
82. It is apposite to note that in Paragraph No. 15 of IFFCO (supra),
the Hon‟ble Supreme Court had categorically observed that the award
therein was an interim award because the learned Arbitrator had
"disposed of one matter between the parties, i.e., the issue of
limitation finally." The element of final adjudication of a specific
issue was thus central to the Court‟s conclusion. The above-stated
Paragraph No. 15 is reproduced herein under for ready reference:
"15. Tested in the light of the statutory provisions and the case law
cited above, it is clear that as the learned arbitrator has disposed of
one matter between the parties i.e. the issue of limitation finally,
the award dated 23-7-2015 is an "interim award" within the
meaning of Section 2(1)(c) of the Act and being subsumed within
the expression "arbitral award" could, therefore, have been
challenged under Section 34 of the Act."
83. Tested on this touchstone, the Impugned Orders in the present
case plainly fall short of the threshold delineated in IFFCO (supra).
Since in the present matter, the Impugned Orders do not adjudicate
upon any substantial issue affecting the rights of the parties, nor do
they decide upon any of the Points of Determination framed, nor do
they finally determine any component of the arbitral reference. Thus,
the element of finality qua a framed issue, which weighed heavily
with the Hon‟ble Supreme Court in IFFCO (supra), is conspicuously
absent.
84. In the considered view of this Court, the reliance, far from
advancing the Petitioners‟ case, in fact reiterates the indispensable
requirement of a conclusive determination of a substantive issue.
Consequently, the reliance placed upon the said decision stands
clearly distinguished on facts and principle, and does not carry the
Petitioners across the jurisdictional threshold under Section 34 of the
Act.
85. Further, reliance was placed by the Petitioners upon the decision
of a Coordinate Bench of this Court in H.S. Bedi (supra), contending
that an order rejecting an application for amendment of pleadings
must necessarily be regarded as an interim award. In the said decision,
drawing support from Cinevistaas (supra), the order rejecting the
amendment on the ground of delay was held to assume the character
of an interim award. Attention was drawn to Paragraph No. 19 of the
said decision, wherein the following was observed:
"19. I am of the view that Mr. Vachher is justified in relying upon
the judgment in the case of Cinevistaas Ltd. (supra) and the
impugned dated October 17, 2020 passed by the learned Arbitrator
is in the form an interim award, making this petition maintainable."
86. However, the reliance placed is clearly distinguishable from
facts. In H.S. Bedi (supra), the amendment sought pertained to a plea
of equitable set-off amounting to Rs. 15 Crores. The Coordinate
Bench found that rejection of such an amendment had the effect of
finally foreclosing a substantive monetary claim and thereby
conclusively determined a component of the rights asserted by the
petitioners therein. It was in that backdrop that the Court held that the
order rejecting the amendment bore the attributes of an interim award.
The relevant paragraphs, being Paragraph Nos. 26 & 29, are
reproduced herein under:
"26. Further, the plea of the petitioners for equitable set-off, is
primarily with regard to Rs.15 Crores of loan advanced by the
respondent in the two loan accounts. It is the petitioners‟ case
before the learned Arbitrator that there was no outstanding dues in
the account of Cedar and Sukhmani. That apart, they are seeking
adjustment of Rs.15 Crores, which was taken as loan from the
respondent and returned on the same day to the respondent as was
received by the petitioners.
*****
29. Even the judgment on which reliance has been placed by Mr.
Vachher in the case of State of Bihar (supra) and Baldev Singh
(supra), the Supreme Court; had allowed the amendment to the
written statement even after the conclusion of the plaintiff‟s
evidence. Similarly, in the case of Jitendra Kumar Khan (supra) the
Supreme Court upheld the order of the Division Bench of the
Calcutta High Court allowing the appeal of the respondent
challenging the order of the learned Single Judge not allowing the
amendment to the written statement incorporating a counter claim.
That apart, in the case in hand, what is important is by such a
rejection, the substantive rights of the petitioners have been
decided, which means that the petitioners cannot in future claim
the relief as they have sought for by way of an amendment".
(emphasis supplied)
87. In contradistinction, the amendments sought in the present case
did not operate to finally foreclose, extinguish, or conclusively
determine any independent or substantive claim of the Petitioners. A
comparative reading of the original prayers, the proposed
amendments, and the Points of Determination framed by the learned
Arbitral Tribunal on 14.08.2025 clearly demonstrates that the core
issues relating to entitlement to compensation, as well as the quantum,
rate, and period thereof, were expressly kept open for adjudication.
88. The Points of Determination were framed in broad and inclusive
terms, with the onus of proof placed upon the Claimants, and the
determination of rate and amount left to be decided on the basis of
evidence to be adduced during the course of the arbitral proceedings.
The relevant comparative table, evidencing that all substantive rights
and claims were consciously kept open by the Arbitral Tribunal, is
reproduced below for ready reference:
Original Prayer Amendment Sought Covered by Issue
framed by the Arbitral
Tribunal
"If prayers A-D are not E. Award may be Whether, in the
granted. Award may be passed in favour of the alternative to the claims
passed in favour of the Claimant against the which are subject matter
Claimants against the Respondent for of preceding issues, the
Respondent for compensation on Claimant is entitled to
compensation on account account of having recover from the
of having suffered and suffered and been Respondent
deprived of the use and deprived of the use and compensation on
enjoyment of the subject enjoyment of the account of deprivation
matter shops since subject matter shops of use and enjoyment of
29.05.2020 being since 29.05.2020. At subject shop(s) along
computed at the present the present cost/value with cost of
cost/value of the subject of the subject matter proportionate plot of
matter shops along with shops along with the land underneath it? If so,
cost of proportionate plot cost of a proportionate at what rate, for which
of land underneath which plot of land underneath, period and in what
may be calculated at the which may be amount? (OPC)
current prevailing ascertained upon
market value of evidence and trial"
approximately Rs.1.60
Lacs Per Sq. Ft."
E. Award a sum of Rs. F. Award a Whether the Claimant is
3,75,96,200/- (rupees three 2,78,25,000/- (Rupees entitled to recover from
crores seventy five lakhs Two Crore sum of Rs. the Respondent money
ninety six thousand two Seventy-Eight Lakhs on account of loss of
hundred only) towards all Twenty-Five Thousand regular income and other
the loss of regular income Only) towards loss of pecuniary damages
and other pecuniary regular income and suffered as well as for
damages suffered by the further pecuniary loss of goodwill of the
claimants as detailed in the damages suffered by business from June 2020
claim petition in para 51 in the Claimants as to 31.10.2024? If so, at
favour of the Claimants detailed in the claim what rate, and in what
and against the Respondent petition in paragraph amount? (OPC)
along with interest at 18% no. 51 in favour of the
per annum from June, Claimants and against
2020 till 31.10.2024 and the Respondent along
further award pendent-lite with interest @ 12%
and future interest at the per annum from June
same rate till the Claimants 2020 till 31.10.2024
receive the actual amount and further award
so awarded by this Hon'ble pendent-lite and future
Tribunal. interest at the same rate
till the Claimants
receive the actual
amount so awarded by
this Hon'ble Tribunal.
F. Award may also be G. Award may also be Whether the Claimant is
passed in favour of the passed in favour of the entitled to recover from
claimants against the Claimants and against the Respondent money
Respondent for recovery of the Respondent for a on account of
pendent lite and future sum of Rs. 5,25,000/- damages/compensation
damages/compensation in (Rupees Five Lakhs due to running loss of
the sum of Rs.6,26,850/- Twenty-Five income and business
per month calculated at the Thousand) calculated profits from November
rate of Rs. 450/-per sq. ft. for 53 months 2024 onwards till
for the subject matter shops calculated at the rate of restoration of access to
admeasuring 1393.9 sq. ft.( Rs. 350/-per sq. ft. for the subject shop(s)? If
129.5 sq. mtr.) on account the subject shops so, at what rate, and in
of recurring loss of income admeasuring 1500 sq. what amount? (OPC)"
and business profits from ft. towards recurring
November, 2024 onwards loss of income and
till the access of the subject business profits
matter shops is restored calculated from
back to the Claimants. November 2024 till the
Further interest may also access to the subject
be awarded on the above shops is restored to the
claim @ 18% per annum. Claimants by this
Hon'ble Tribunal as
prayed above. The
amount to be awarded
is calculated @ 12%
interest per annum on
the amount which may
be ascertained.
89. Thus, unlike in H.S. Bedi (supra), where the rejection of the
amendment resulted in a conclusive denial of a quantified equitable
set-off claim, in the present case, the rejection of the amendment
applications did not result in any substantial issues raised, attaining
finality, nor did it curtail or prejudice any substantive right of the
Petitioners. The claims, as framed, remained fully amenable to
adjudication on merits, and the Petitioners are not precluded from
leading evidence in support thereof.
90. Accordingly, the reliance placed does not advance the
Petitioners‟ case. The factual matrix and the legal consequences in
that matter are, as discussed, materially distinct from the present case.
Hence, the ratio of H.S. Bedi (supra) stands clearly distinguishable.
91. Further, the learned counsel for the Respondent, in support of
the preliminary objection, placed reliance upon a line of authorities to
contend that not every order passed by an Arbitral Tribunal can be
elevated to the status of an interim award. Particular emphasis was
laid on the settled jurisprudence concerning orders rejecting
applications for amendment of pleadings.
92. In this context, reliance was placed upon the decision of this
Court in Container Corporation of India (supra), where, on facts, the
Petitioners had sought to amend their written statement to incorporate
a counter-claim at a belated stage. The learned Arbitrator rejected the
amendment on the ground of limitation, and the challenge under
Section 34 was dismissed on the ground that such rejection did not
constitute an interim award.
93. The Court, in Paragraph Nos. 5 and 6 of the said judgment,
clarified that an interim award partakes the nature of a decision on a
part of the claim, akin to a preliminary decree or a decree on
admission, and must bear the character of a determination on a
substantive claim. It was further held that dismissal of an application
for amendment of pleadings does not amount to such a determination
and, therefore, cannot be assailed as an interim award. The relevant
paragraphs, specifically Paragraph Nos. 5 and 6, are reproduced herein
under for ready reference:
"5. An interim award is in the nature of a decision of the Arbitral
Tribunal on some of the claims of the parties. Occasionally, the
Arbitral Tribunal is called upon to give a part award particularly
when a part of the claim of the claimant stands admitted by the
opposite party either in the pleadings or otherwise. The act does
not define an interim award. Section 2(c) of the Act, however
provides that an arbitral award included an interim award.
Generally an interim award is like a preliminary decree within the
meaning of Section 2(2) of the Civil Procedure Code or it is like a
decree based on the admissions of parties as envisaged under Order
12 Rule 6 CPC. However, in any case, an interim award must make
a provisional arrangement by the Arbitral Tribunal during the
proceedings pending before it, but before passing the final award.
6. I consider that dismissing of an application for amendment of
the written statement whereby the petitioner was not allowed to
include the counter claim at a belated stage cannot be termed as an
interim award so as to allow challenging such order under Section
34. The petitioner would be at liberty to assail the final award and
can take all the ground of challenge as available under law as and
when final award is passed by the learned Arbitral Tribunal. The
petitioner cannot be allowed to challenge dismissal of its
application for amendment as an interim award. One of the
purposes of enactment of Arbitration & Conciliation Act, 1996 was
to minimize the intervention of the courts during arbitral
proceedings and that is why Section 5 of the Act prohibits the
Courts from interfering in the arbitration process. The judicial
intervention during arbitral proceedings is not permissible unless it
is specifically provided by Part-I of the Act. The effect of non-
obstantive clause in Section 5 is that the provisions of Part-I of the
Act will prevail over any other law for the time being in force in
India. This provision recognizes minimum role of judicial
intervention in arbitral proceedings. It clearly brings out the object
of the Act i.e. to minimize the judicial intervention and to
encourage speedy and economic resolution of disputes by the
arbitral tribunal, in case where the disputes are entered by the
arbitration agreement."
94. This Court has carefully considered the reliance placed by the
Respondent on Container Corporation of India (supra). A perusal of
the said decision reveals that the Court drew a clear distinction
between an interim award, which partakes the nature of a
determination on a substantive claim, and a procedural order
regulating the conduct of arbitral proceedings. It was observed therein
that dismissal of an application seeking amendment of pleadings,
including incorporation of a counter-claim at a belated stage, does not
amount to a decision on any part of the claim itself and therefore
cannot be characterised as an interim award amenable to challenge
under Section 34 of the Act.
95. The reasoning adopted in the said decision is rooted in the
legislative intent underlying Sections 5 and 34 of the Act, which
circumscribe judicial intervention during arbitral proceedings. The
Court underscored that permitting challenges to procedural orders
under the guise of interim awards would defeat the object of the
statute, namely, expeditious and minimal-interference resolution of
disputes. The remedy, if any, lies in assailing the final award, wherein
all permissible grounds may be urged.
96. Further, in Rhiti Sports (supra), reliance would be placed on
Paragraph Nos. 17 and 18. The same are reproduced herein under for
ready reference:
"17. As indicated above, a final award would necessarily entail of
(i) all disputes in case no other award has been rendered earlier in
respect of any of the disputes referred to the arbitral tribunal, or (ii)
all the remaining disputes in case a partial or interim award(s) have
been entered prior to entering the final award. In either event, the
final award would necessarily (either through adjudication or
otherwise) entail the settlement of the dispute at which the parties
are at issue. It, thus, necessarily follows that for an order to qualify
as an arbitral award either as final or interim, it must settle a matter
at which the parties are at issue. Further, it would require to be in
the form as specified under Section 31 of the Act.
18. To put it in the negative, any procedural order or an order that
does not finally settle a matter at which the parties are at issue,
would not qualify to be termed as "arbitral award"."
97. This Court has considered the reliance placed on Rhiti Sports
(supra), specifically on Paragraph Nos. 17 and 18 of the said decision,
wherein the Court lucidly articulated that for an order to qualify as
either a final or interim award, it must settle a matter at which the
parties are in issue. The determinative requirement, therefore, is that
the order must bring about a conclusive adjudication of a substantive
dispute forming part of the arbitral reference. Conversely, any order
that does not finally settle such a matter and merely regulates the
conduct of proceedings would not satisfy the statutory attributes of an
„arbitral award‟.
98. The emphasis in Rhiti Sports (supra) is thus squarely on the
element of finality coupled with adjudication of a matter in dispute.
The decision makes it abundantly clear that procedural directions,
even if they incidentally affect the manner in which a party presents
its case, do not, by that reason alone, elevate themselves to the status
of an interim award.
99. This Court has also considered the reliance placed by the
Respondent on Punita Bhardwaj (supra). In the said decision, the
Court undertook a nuanced examination of the jurisprudence emerging
from Container Corporation (supra), Cinevistaas (supra) and H.S.
Bedi (supra), and distilled the governing principle that the
determinative factor for maintainability under Section 34 is whether
the impugned order finally adjudicates a substantive claim or defence.
The relevant paragraphs of said judgment are reproduced herein under
for ready reference:
"18. The three judgments of this Court cited by learned counsel for
the parties must be read in the context of this provision. The statute
clearly vests discretion in the arbitral tribunal to disallow a party to
amend or supplement its pleadings on the ground that the
application is belated. In Container Corporation, the amendment
was rejected by the arbitral tribunal on this ground and the
challenge under Section 34 of the Act was held not to be
maintainable. In M/s Cinevistaas and Lt. Col. H.S. Bedi Retd. on
the other hand, the Court came to the conclusion that the rejection
of the amendments were in the nature of final adjudication of the
claims and defences proposed to be raised. It is this factor which
clothed the orders of the tribunal with the characteristic of finality
and rendered them susceptible to challenge as interim awards. This
distinction, in my view, is the key to determining the
maintainability of the present petition.
19. In the facts of the present case, the learned arbitrator has
proceeded only on the ground that the amendment was sought
belatedly. Paragraphs 12 and 13 of the impugned order make this
position clear, and in fact, in paragraph 13, the learned arbitrator
has stated that expression of any view herein before will not be
treated as expression on the merit of the case.
20. Further, it is evident that the suit was filed before this Court as
far back in 2014 and referred to arbitration in the year 2016. The
application for amendment was filed by the petitioner only on
21.07.2017. Even thereafter, it is recorded by the learned arbitrator
that the matter proceeded without the petitioner seeking an
adjudication of the said application until 04.11.2019, when the
impugned order was passed. In the meanwhile, proceedings
continued before the learned arbitrator, and issues appear to have
been framed in these proceedings on 17.05.2018. During the
pendency of the present petition before this Court also, I am
informed that the parties have proceeded to lead evidence before
the learned arbitrator and the proceedings are now at the stage of
final arguments.
21. In view of the aforesaid position, I am of the view that the
impugned order in the present case does not constitute an interim
award, susceptible to challenge under Section 34 of the Act. The
petition is, therefore, dismissed as not maintainable, leaving it open
to the parties to take such remedies as may be available to them in
accordance with law."
100. In Punita Bhardwaj (supra), the arbitral tribunal had rejected an
application for amendment of the pleadings solely on the ground of
delay. The Court noted that the learned arbitrator had expressly
clarified that no opinion was being expressed on the merits of the
case, and that the order did not determine any claim or defence with
finality. The rejection was thus procedural in character and did not
clothe the order with the attributes of an interim award.
101. Significantly, the Court emphasised that while the Act vests
discretion in the arbitral tribunal under Section 23(3) to disallow
belated amendments, such exercise of discretion does not, ipso facto,
translate into an adjudication of substantive rights. The distinction
drawn was clear that where rejection of an amendment results in final
determination of a claim or defence, the order may assume the
character of an interim award, however, where it merely regulates the
conduct of proceedings without foreclosing adjudication on merits, it
remains procedural.
102. Applying that reasoning, the petition in Punita Bhardwaj (supra)
was dismissed as not maintainable, with liberty to assail the final
award. The decision, therefore, reinforces the principle that the mere
rejection of an amendment application, absent a conclusive
determination of a matter in dispute, does not elevate the order to the
status of an interim award within the meaning of Sections 2(1)(c) and
31(6) of the Act.
103. This Court finds substantial force in the reliance placed by the
learned counsel for the Respondent upon the line of authorities
wherein analogous questions have been examined and the governing
principles authoritatively settled by the Courts.
104. The judicial precedents cited and analysed hereinabove yield a
clear and consistent position in law, i.e., an order disposing of an
application for amendment of pleadings does not, by that circumstance
alone, acquire the status of an interim award. The determinative
consideration is not the nature of the application, but the legal effect
of its rejection.
105. The position may thus be summarised as first, not every order
passed by an Arbitral Tribunal qualifies as an interim award; second,
there exists no straight-jacket rule that an order rejecting an
amendment application necessarily constitutes an interim award; and
third, it is the element of finality in respect of a substantive issue,
resulting in crystallisation of a right, that determines whether an order
crosses the threshold into the domain of an interim award.
Governing Test for determining what constitutes an „Interim Award‟
106. In light of the foregoing discussion and the judicial precedents
noticed hereinabove, the governing test for determining whether an
order qualifies as an „interim award‟ may now be articulated.
(a) Whether the Order finally adjudicates a substantive dispute or
claims between the parties;
(b) Whether such adjudication attains finality and has a binding
effect insofar as that issue is concerned; and
(c) Whether, upon such determination, the Arbitral Tribunal
becomes functus officio qua that issue and retains no further
adjudicatory discretion thereon.
107. Therefore, if an order answers to all the aforesaid three elements
in affirmative, the order transcends the realm of a mere procedural
order and assumes the character of an Interim Award within the
meaning of Sections 2(1)(c) and 31(6) of the Act, and consequently
becomes susceptible to scrutiny under Section 34, subject to its
limited and circumscribed scope.
108. Tested on this anvil, this Court is of the considered view that the
Impugned Orders do not satisfy the essential indicia of an interim
award. It would be observed as under:
(a). First, the rejection of the amendment applications does not
decide any substantive dispute or independent claim between
the parties, it merely preserves the pleadings in the form in
which they already stood.
(b). Second, the determination lacks finality in respect of any issue
forming part of the arbitral reference, inasmuch as the Points
of Determination framed by the learned Arbitral Tribunal
expressly leave open the questions of entitlement, quantum,
rate and period of compensation to be adjudicated on the basis
of evidence.
(c). Third, the Arbitral Tribunal has not rendered itself functus
officio in respect of any such issue, nor has it exhausted its
adjudicatory discretion thereon.
109. The Impugned Orders, therefore, operate purely in the procedural
realm, regulating the conduct of proceedings without conclusively
settling any matter in controversy. Consequently, they do not meet the
statutory threshold of an interim award amenable to challenge under
Section 34 of the Act.
DECISION:
110. In light of the foregoing discussion, this Court holds that the
Impugned Orders do not qualify as „Interim Awards‟ within the
meaning of Sections 2(1)(c) and 31(6) of the Act.
111. Consequently, the present Petitions are dismissed as not
maintainable under Section 34 of the Act.
112. It is clarified that this Court has not entered into the merits of the
controversy or examined the substantive issues raised in the
proceedings as before the learned Arbitrator. Nothing contained in the
present adjudication shall be construed as an expression of opinion on
the merits of the disputes between the parties, so as to cause any
prejudice before the learned Arbitrator. The arbitral proceedings shall
proceed independently and uninfluenced by any observations made by
this Court.
113. Accordingly, the present Petitions, along with pending
Application(s), if any, are disposed of.
114. No Order as to costs.
HARISH VAIDYANATHAN SHANKAR, J.
FEBRUARY 18, 2026/'DJ
