Does the Law Permit Review of a Court’s Order Appointing an Arbitrator?

Arbitration law in India is founded on the pillars of party autonomy, limited court intervention, procedural certainty, and the swift resolution of disputes. A question, however, that has often generated debate is whether a court, having once appointed an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996, can later revisit or review that order.

The issue is not merely procedural — it affects the finality of arbitral proceedings, the jurisdictional boundaries of courts, and the very efficiency of arbitration as a dispute-resolution mechanism. In 2025, the Supreme Court dealt with the question directly in Hindustan Construction Company Ltd. v. Bihar Rajya Pul Nirman Nigam Ltd., bringing much-needed clarity. 

Background of the Dispute

• In 2014, Bihar Rajya Pul Nirman Nigam Ltd. awarded HCC a contract for bridge construction in Aurangabad & Rohtas districts.
• The contract included Clause 25, providing for arbitration.
• HCC raised claims first for the original contract period and later for the extended period.

The first arbitration culminated in an award dated 31.12.2021, accepted and satisfied by the Respondent. Later disputes emerged on extended time and additional compensation.

When no arbitrator was appointed internally despite notice, HCC approached the Patna High Court under Section 11, and in the second reference, Justice Shivaji Pandey (Retd.) was appointed as sole arbitrator.

Over 70 hearings took place, evidence was complete, arguments were near conclusion, and Section 29A extensions were jointly sought — when suddenly, the Respondent challenged the very existence of the arbitration clause via Review.

The High Court allowed review, suspended the arbitrator, and dismissed the Section 11 petition altogether, prompting HCC to approach the Supreme Court.

Issue

Does a High Court have the power to review or recall its previous order passed under Section 11?

What the Supreme Court held

No Review Maintainable Against Section 11 Appointment Order

The Supreme Court held that once a Section 11 order is passed, the court becomes functus officio. It cannot later reopen the matter through a review petition.

• Arbitration Act is a self-contained code — only limited judicial intervention allowed.
• Review can only correct procedural error, not re-adjudicate or reinterpret contract.
• Respondent participated in arbitration for 3+ years, sought extensions, and incurred costs — hence estopped from disputing arbitrability later.

The review was filed three years after appointment, that too after the proceedings were almost completed — a delay the Court found legally impermissible.

Clause 25 is a Valid Arbitration Agreement Under Section 7

The Court emphasised that the intention to arbitrate matters more than drafting style.

Clause 25 expressly states:

“Disputes or differences shall be referred for adjudication through arbitrator appointed by Managing Director…”

Moreover:

• Arbitration was already invoked earlier
• Award for the first set of claims accepted without objection
• Statements, conduct & participation proved the existence of an arbitration agreement

Thus, the Court treated Clause 25 as a substantive arbitration clause, satisfying Section 7(4)(c) through conduct & pleadings.

The Arbitration Act is a self-contained code. What is not permitted is prohibited.

• There is no statutory provision for review of a Section 11 order.
• Therefore, entertaining a review petition is beyond jurisdiction.

Even if Appointing Authority Becomes Ineligible — Arbitration Survives

Respondent argued that arbitration cannot continue if Managing Director cannot appoint arbitrator — as contract states:

“No person other than the Managing Director shall act as arbitrator and if that is not possible, matter shall not be referred at all.”

Supreme Court rejected this restrictive reading.

The Court’s Principle:

Invalidity of appointing authority ≠ invalidity of arbitration clause

Final Judgment

The Supreme Court set aside the High Court order, restored arbitration, and directed appointment of substitute arbitrator rather than scrapping proceedings entirely.

• Section 11 review was beyond jurisdiction.
• Clause 25 is a valid arbitration clause.
• Arbitration cannot be undone due to appointing authority issues.

Supreme Court Precedents Cited

1. SBP & Co. v. Patel Engineering Ltd. (2005) 8 SCC 618: Nature of power under Section 11 is judicial, not administrative.
2. Municipal Corporation of Greater Mumbai v. Pratibha Industries Ltd. (2019) 3 SCC 203: Review permissible only for procedural errors, not reconsideration on merits.
3. Vidya Drolia v. Durga Trading Corporation (2021) 2 SCC 1: Existence of arbitration depends on parties’ intention expressed in contract.

4. Kandla Export Corp. v. OCI Corp. (2018) 14 SCC 715: Arbitration Act is a self-contained code — alternative remedies limited.

Conclusion

The Supreme Court in Hindustan Construction Company Ltd. v. Bihar Rajya Pul Nirman Nigam Ltd. reaffirmed the core principles of Indian arbitration law by holding that once an arbitrator is appointed under Section 11, the High Court cannot review or reopen that appointment, and that Clause 25 constituted a valid and binding arbitration agreement despite objections raised belatedly by the respondent.

The Court stressed that judicial interference must be minimal, party autonomy must prevail, and arbitration cannot be derailed on procedural pretexts—especially after years of participation, completed evidence, and near-final proceedings. By restoring the arbitral process and setting aside the High Court’s review order, the judgment fortifies the pro-arbitration framework, prevents abuse of process, and ensures that contractual dispute resolution through arbitration remains effective, final, and enforceable.

Important Link

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