The Allahabad High Court has reaffirmed that judicial intervention under Section 11 of the Arbitration and Conciliation Act, 1996 is strictly limited to appointment, and post-appointment attempts to recall orders on grounds of contractual misinterpretation are impermissible. The Court emphasized that party autonomy and the principle of kompetenz-kompetenz must prevail over belated challenges that risk destabilizing a lawfully constituted arbitral tribunal.
Background & Facts
The Dispute
The petitioner, Madhyanchal Vidyut Vitran Nigam Ltd., and the respondent, M/S Transrail Lighting Ltd., entered into a contract dated 17.05.2018 for electrical works. The contract contained both General Conditions of Contract (GCC) and Special Conditions of Contract (SCC). Clause 39.2 of the GCC provided for a three-member arbitral tribunal, while the SCC stipulated that disputes valued up to Rs. 25.00 Crores shall be decided by a Sole Arbitrator. The petitioner claimed damages exceeding Rs. 20 Crores, which fell within the SCC limit for Sole Arbitrator jurisdiction.
Key Facts
- The contract was executed on 17.05.2018
- Disputes arose in late 2023 regarding payment and performance
- On 18.01.2024, the petitioner issued a notice invoking arbitration under Clause 39.2 of GCC
- On 22.02.2024, the petitioner nominated Mrs. Poonam Srivastava, Former Judge of the Allahabad High Court, as its arbitrator
- The respondent did not nominate its arbitrator within 30 days
- On 17.07.2025, the High Court issued an order acknowledging the existence of an arbitration clause and the petitioner’s nomination
- On 07.08.2025, the High Court appointed a nominee arbitrator on behalf of the respondent under Section 11(4) of the Act
- The two party-nominated arbitrators jointly appointed a presiding arbitrator on 15.09.2025
- The arbitral tribunal was fully constituted by 20.09.2025
- On 12.10.2025, the arbitral tribunal recorded the petitioner’s apprehension regarding SCC but kept proceedings in abeyance pending clarification
- On 26.11.2025, notices were issued for the recall application
- The recall application was filed on 15.01.2026, over five months after the tribunal’s constitution
Procedural History
- 18.01.2024: Petitioner issued arbitration notice under GCC Clause 39.2
- 22.02.2024: Petitioner nominated its arbitrator
- 17.07.2025: High Court order acknowledging arbitration clause and petitioner’s nomination
- 07.08.2025: High Court appointed nominee arbitrator for respondent under Section 11(4)
- 15.09.2025: Party-nominated arbitrators appointed presiding arbitrator
- 20.09.2025: Arbitral Tribunal fully constituted
- 12.10.2025: Arbitral Tribunal records petitioner’s objection and stays proceedings
- 15.01.2026: Petitioner files application for recall of High Court orders dated 17.07.2025 and 07.08.2025
- 12.03.2026: Respondent files objections
- 27.04.2026: Arguments heard
- 14.05.2026: Judgment delivered
The Parties' Positions
The petitioner contended that the High Court’s appointment of a nominee arbitrator under Section 11(4) was erroneous because the SCC novated the GCC, mandating a Sole Arbitrator for claims under Rs. 25 Crores. It argued that the Court’s order was based on incomplete information and that the tribunal’s composition violated the contract.
The respondent countered that the petitioner had consistently proceeded on the basis of a three-member tribunal, had nominated its own arbitrator under GCC, and had not objected to the tribunal’s constitution until after the presiding arbitrator was appointed. It further argued that the petitioner’s delay and participation in the process amounted to waiver under Section 4 of the Act.
Relief Sought
The petitioner sought recall of the High Court’s orders dated 17.07.2025 and 07.08.2025, termination of the nominee arbitrator’s mandate, and appointment of a Sole Arbitrator under the SCC. It also sought condonation of delay in filing the recall application.
The Legal Issue
Can a High Court recall its order under Section 11(4) of the Arbitration and Conciliation Act, 1996, appointing a nominee arbitrator, on the ground that the parties’ contract mandated a Sole Arbitrator, after the arbitral tribunal has been fully constituted with the consent of both parties?
Arguments Presented
For the Petitioner
The petitioner relied on Municipal Corporation of Greater Mumbai v. Pratibha Industries Ltd. (2019) 3 SCC 203 and Hindustan Construction Company Ltd. v. Bihar Rajya Pul Nirman Nigam Ltd. (2025 INSC 1365) to argue that High Courts, as Courts of Record under Article 215 of the Constitution, possess inherent powers to recall orders to prevent miscarriage of justice. It contended that the omission to consider the SCC in the Section 11(4) order was an error apparent on the face of the record, as the SCC was part of the contract and was referenced in the petition. The petitioner argued that the tribunal’s composition violated the contractual mandate and that the Court’s failure to notice this fundamental flaw warranted recall.
For the Respondent
The respondent argued that the High Court’s powers under Section 11 are statutory and non-reviewable. It relied on Bihar Rajya Pul Nirman Nigam Ltd. v. Hindustan Construction Co. (2025 INSC 1365) to assert that once an arbitrator is appointed and the tribunal is constituted, the Court becomes functus officio. It further contended that the petitioner had waived its right to object under Section 4 of the Act by participating in the appointment of the tribunal without raising the SCC issue. The respondent emphasized that the petitioner’s delay and conduct amounted to acquiescence, and that allowing recall would undermine the Act’s policy of minimal judicial interference.
The Court's Analysis
The Court began by acknowledging that while the Arbitration and Conciliation Act, 1996 does not expressly confer review powers on the High Court, Article 215 of the Constitution grants superior courts inherent jurisdiction to correct grave errors to prevent miscarriage of justice. However, the Court emphasized that this power is not a substitute for appeal and must be exercised with extreme restraint.
"The inherent power under Article 215 cannot be invoked to re-agitate issues already decided, nor to re-appreciate contractual terms after the arbitral process has commenced."
The Court examined the petitioner’s conduct throughout the arbitration process. It noted that the petitioner itself had invoked arbitration under Clause 39.2 of the GCC, nominated its arbitrator under that clause, and never objected to the tribunal’s three-member structure until after the presiding arbitrator was appointed. The Court held that this conduct constituted a waiver under Section 4 of the Act: "A party who proceeds with arbitration without timely objection to non-compliance with the arbitration agreement is deemed to have waived the right to object."
The Court distinguished Pratibha Industries Ltd. on the ground that in that case, there was no arbitration clause at all - a fundamental jurisdictional defect. Here, the clause existed, was invoked, and the parties acted in accordance with it. The alleged conflict between GCC and SCC was a matter of contractual interpretation, not jurisdictional absence.
The Court further relied on Narayan Prasad Lohia v. Nikunj Kumar Lohia (2002) 3 SCC 572 to hold that Section 10 of the Act - which permits parties to determine the number of arbitrators - is derogable. Parties may agree to a composition, and their subsequent conduct may modify or waive prior terms. The formation of a three-member tribunal with mutual consent was lawful and binding.
The Court also noted that the petitioner had not filed any application under Section 16 of the Act before the arbitral tribunal to challenge its own composition - the proper forum for such objections. The tribunal itself had acknowledged the petitioner’s apprehension but found no basis to invalidate its constitution.
"Section 11 is intended to trigger arbitration, not to create multiple stages of judicial reconsideration. To permit recall at this stage would convert a review into an appeal in disguise."
The Court concluded that the petitioner’s grounds did not meet the high threshold required for invoking inherent powers. The alleged error was not apparent on the face of the record, but required interpretation of contractual provisions - a task reserved for the arbitral tribunal under the principle of kompetenz-kompetenz.
The Verdict
The applications for recall and condonation of delay were dismissed. The Court held that the orders dated 17.07.2025 and 07.08.2025 shall remain in force. The three-member arbitral tribunal, duly constituted with the consent of both parties, shall continue its proceedings. There shall be no order as to costs.
What This Means For Similar Cases
Party Conduct Determines Waiver of Arbitration Rights
- Practitioners must raise objections to tribunal composition under Section 16 of the Act at the earliest opportunity - failure to do so constitutes waiver under Section 4
- Participation in the appointment of arbitrators, even if done under a mistaken belief, bars later challenges based on contractual interpretation
- Delay in raising objections, especially after tribunal constitution, will be viewed as acquiescence
Section 11 Orders Are Final Unless a Jurisdictional Void Exists
- Recall of Section 11 orders is permissible only where the underlying arbitration agreement is non-existent or invalid - not where there is a dispute over interpretation
- Contractual conflicts between general and special conditions are matters for the arbitral tribunal, not the appointing court
- Courts will not entertain belated challenges that risk disrupting an ongoing arbitration
Inherent Powers Are Not a Backdoor for Appeals
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High Courts may recall orders only in cases of grave, patent error - not to re-examine contractual terms
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Subsequent judgments or changes in legal interpretation cannot serve as grounds for recall
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The doctrine of kompetenz-kompetenz must prevail: the tribunal, not the court, decides its own jurisdiction once constituted
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The doctrine of party autonomy under Section 10 and Section 4 of the Act is paramount - parties cannot selectively invoke contractual terms after the process has advanced
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Practitioners must ensure that all contractual provisions are fully disclosed in Section 11 petitions - failure to do so may bar later reliance on those provisions
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Any challenge to tribunal composition must be raised before the arbitral tribunal under Section 16, not through collateral review applications
