Safiya Malik

The Jharkhand High Court recently dismissed a writ petition challenging an interim order by a sole arbitrator in an ongoing arbitration under the Arbitration and Conciliation Act, 1996. The petition sought to quash an order permitting amendments under Section 23(3) of the Arbitration and Conciliation Act, 1996, and Order VI Rule 17 of the Code of Civil Procedure, 1908. The court observed that interference in such interim orders is permissible only in rare and exceptional circumstances, which were not found in the present case.

The dispute arose from a contract dated March 23, 2015, between the petitioners, Rites Ltd. and Damodar Valley Corporation (DVC), and the respondent, M/s Supreme BKB DECO JV, for the construction of a bridge and related infrastructure over the Konar River. Arbitration proceedings were initiated to address allegations of contractual breaches, including claims for escalation and price variations.

During the arbitration, the respondent (claimant) filed an amendment petition seeking to introduce new material facts and documents. These were based on a Supreme Court ruling in Batliboi Environmental Engineers Ltd. vs. Hindustan Petroleum Corporation Limited & Anr. (2024), which clarified the application of the Hardson formula for evaluating cost and profit variations. The claimant argued that the amendment was necessary to align its claims with the principles outlined in the judgment.

The petitioners opposed the amendment, contending that the documents in question were available at the commencement of arbitration. They argued that no justification had been provided for their delayed submission, as required under Order VI Rule 17 of the Code of Civil Procedure. They further asserted that the amendments introduced new claims, disrupting the arbitration's procedural flow.

The petitioners challenged the arbitrator's decision to allow the amendment in the High Court, citing Articles 226 and 227 of the Constitution of India. They argued that the interim order violated procedural fairness and warranted judicial intervention.

The court considered whether it was appropriate to interfere with the interim order under its writ jurisdiction. It referred to Section 5 of the Arbitration and Conciliation Act, 1996, which limits judicial intervention in arbitration proceedings. The court observed that: “Once the arbitration has commenced, parties are generally expected to await the final award unless an express statutory remedy is available under Section 37 or 34 of the Act.”

The court cited the Supreme Court's ruling in Serosoft Solutions Private Ltd. vs. Dexter Capital Advisors Pvt. Ltd. (2022), which held that writ jurisdiction could be invoked during arbitration proceedings only in cases of bad faith or where a party is left without recourse. The judgment stated: “The power under Articles 226 and 227 of the Constitution must be exercised with great caution and only in exceptional rarity.”

Addressing the amendment, the court noted that arbitral tribunals are not bound by the procedural rigors of the Code of Civil Procedure. Referring to the Supreme Court's decision in Life Insurance Corporation of India vs. Sanjeev Builders Pvt. Ltd. (2022), it stated: “Courts and arbitral tribunals must adopt a liberal approach towards amendments, particularly when they do not introduce a new cause of action or alter the nature of the dispute.”

The court also observed that the amendments in the present case did not introduce new claims but sought to clarify issues in light of the Supreme Court's ruling in Batliboi Environmental Engineers Ltd. The court stated: “The purpose of the amendment was to enable the arbitrator to determine the real question in controversy between the parties, which aligns with the principles of fairness and justice.”

The court dismissed the writ petition, concluding that the petitioners had not demonstrated exceptional circumstances justifying interference. It held that the arbitration should proceed without judicial interruption, as per the scheme of the Arbitration and Conciliation Act, 1996.

The court directed that the arbitral tribunal consider the amended submissions and determine the issues raised, adhering to the principles outlined in the Batliboi judgment. Pending interlocutory applications were also disposed of.

Case Title: Rites Ltd. & Damodar Valley Corporation vs. M/s Supreme BKB DECO JV
Case Number: W.P. (C) No. 311 of 2025
Bench: Justice Gautam Kumar Choudhary

[Read/Download order]