Can a High Court Hand Its Section 37 Appeal to the Arbitrator? Supreme Court Says No, Even by Consent

Case at a Glance

The Supreme Court has held that a High Court hearing a Section 37 appeal against rejection of a Section 9 application cannot remit that appeal to a later-constituted arbitral tribunal and direct it to be treated as a Section 17 application. The appellate power belongs to the “Court” and cannot be interchanged by transmitting the proceedings to the tribunal, even with the parties’ consent.

The respondent held a contract for Administrative and Training Infrastructure (Phase-I) at NDA Khadakwasla. After a Dispute Resolution Board rejected its claims on 26 April 2025, it invoked arbitration. The Union issued a show cause notice and demanded recovery of about Rs 1.46 crore for alleged overpayment. The District Judge, Pune dismissed the respondent’s Section 9 application on 15 October 2025, and it appealed to the High Court under Section 37 while also seeking appointment of an arbitrator under Section 11.

The Union terminated the work order on 3 January 2026, and the High Court stayed the termination. On 13 January 2026 the High Court appointed Maj. Gen. R.K. Mattu as sole arbitrator and remitted its Section 37 proceedings to the tribunal “to be treated as an application under Section 17”. The Union challenged only the remittal direction. On 24 April 2026 the parties signed a supplementary agreement allowing the respondent to complete the work.

The Key Question Before the Court

Can a High Court, with the parties' consent, remit a pending Section 37 appeal to the arbitral tribunal to be treated as a Section 17 application?

Distinct Powers That Cannot Be Swapped

The Union argued that Section 37 jurisdiction vests exclusively in the Court and that a tribunal, as a creature of the contract, cannot exercise appellate or supervisory jurisdiction even by consent. Senior counsel for the respondent fairly accepted that the remittal direction could not be sustained. The Court agreed: the Section 37 jurisdiction belongs to the “Court” under Section 2(1)(e), a Section 17 tribunal does not sit in appeal over a Section 9 order, and the powers “cannot be interchanged merely by transmitting or remitting the appellate proceedings to the Tribunal.”

Once the tribunal was constituted, the High Court could at most have given liberty to approach it independently under Section 17. The Section 9 prayer against termination had in any case become infructuous after the termination of 3 January 2026, and any further interim protection must be considered on subsequent events and the specific relief sought.

What the Court Actually Held

• The High Court’s order was set aside only to the extent of the remittal-and-treatment direction.
• The appointment of the sole arbitrator was not disturbed.
• All other disputes are to be adjudicated by the tribunal, with parties free to raise all permissible contentions.
• The Court said it passed the order “only to clarify the position of law.”

Why This Judgment Matters

• It clarifies the boundary between court and tribunal powers on interim relief.
• It shows that consent cannot confer appellate jurisdiction on a tribunal.
• It guides High Courts handling Section 37 appeals once a tribunal is in place.

What Should Advocates Take Away From the Judgment?

For Parties Seeking Interim Relief

• After the tribunal is constituted, file a fresh Section 17 application rather than seeking remittal.
• Update the interim prayer to reflect events such as termination.

For Counsel in Section 37 Appeals

• Ask the court for liberty to approach the tribunal, not for transfer of the appeal.
• Remember that consent cannot create jurisdiction.

Key Takeaways

Frequently Asked Questions

No. The Union did not challenge it, and the Court left it undisturbed.

At most, given liberty to approach the tribunal independently under Section 17.

No. The Court held the appellate and Section 17 powers cannot be interchanged by remittal.

Conclusion