A bench of justices PS Narasimha and R Mahadevan invoked constitutional theorist AV Dicey to reiterate that “however high you may be, the law is above you”, stressing that “law, and law alone, is the source of power”.
The ruling on Thursday came while deciding whether an application to extend the mandate of an arbitral tribunal under Section 29A of the Arbitration and Conciliation Act, 1996, must be moved before a high court merely because the arbitrator was appointed by it under Section 11, or whether such an application lies before the civil or commercial court as defined under the Act.
Rejecting arguments centred on hierarchy and institutional status, the bench said that such perceptions cannot be used as “context” to deviate from a definition expressly supplied by Parliament. “Interpretation based on a perception of status or hierarchy of courts is opposed to the fundamental conception of rule of law,” the court held.
The dispute arose from arbitration proceedings between members of the Chowgule family, initiated under a memorandum of family settlement executed in January 2021. After arbitration was invoked, one party moved the commercial court for extension of time under Section 29A when the tribunal failed to conclude proceedings within the stipulated period. Around the same time, following the resignation of the presiding arbitrator, the high court appointed a new arbitrator under Section 11.
The commercial court subsequently, in January 2024, allowed the application for extension of time. This was challenged before the high court of Bombay at Goa on the ground that once arbitrators were appointed by the high court, only it could extend their mandate, and not a civil court. A division bench of the high court accepted this reasoning, citing concerns of “conflict of power” and “jurisdictional anomaly”, and set aside the commercial court’s order.
Allowing the appeal, the Supreme Court traced divergent high court rulings on the interpretation of “court” under Section 29A. While one line of authority held that the term must carry the meaning assigned under Section 2(1)(e) of the Act, another adopted a contextual approach to exclude civil courts where arbitrators had been appointed by constitutional courts.
Advocate Abhay Anil Anturkar represented appellant Jagdeep Chowgule while advocate Amit Pai appeared for respondent Sheela Chowgule and others.
In its judgment, the bench firmly rejected the latter approach. It clarified that the jurisdiction exercised by high courts and the Supreme Court under Section 11 is special and limited to the appointment of arbitrators, and stands exhausted once the tribunal is constituted. “To read Section 11 as conferring enduring supervisory control would be to conflate appointment with supervision,” said the court, cautioning against treating referral courts as perpetual overseers of arbitral proceedings.
Emphasising the scheme of the Act, the court held that Section 29A, introduced in 2015 to ensure efficiency and time-bound arbitration, vests the power to extend time, impose penalties for delay, and even substitute arbitrators in the “court” as defined under Section 2(1)(e), namely the principal civil court of original jurisdiction or a high court exercising original civil jurisdiction.
The fear that a civil court might substitute an arbitrator appointed by a high court, the bench said, does not justify rewriting the statute. “Hierarchical difficulties, conflict of power or jurisdictional anomaly” cannot override the plain text enacted by Parliament, it ruled.
Setting aside the high court orders, the Supreme Court restored the commercial court’s decision extending the arbitral mandate and clarified that parties remain free to seek further extensions before the commercial court under Section 29A. The court directed that any such application be decided on merits after hearing all sides.
