Authority: High Court at Calcutta, Circuit Bench at Port Blair

Order Date: July 13, 2026 (Heard on July 10, 2026)

Case Overview

  • Parties: The Union of India (Petitioner), represented by Ms. S.S. Meena Kumary and Mr. V.D. Sivabalan, versus Navayuga Engineering Company Limited (Respondent), represented by a team of senior advocates.
  • Background: The petitioner, as Chief Engineer and Administrator of Andaman Lakshadweep Harbor Works (ALHW) under the Ministry of Ports, Shipping and Waterways, awarded Navayuga Engineering a contract for the "Extension of Haddo Jetty Phase‑II at Port Blair" (Agreement No. ALHW/EE(Project)/AFT‑04/2017‑18 dated 27‑06‑2017) with an estimated cost of Rs 89,82,85,704.00.
  • Arbitration: Disputes over the work led to arbitration governed by the Construction Industry Arbitration Council Rules, 2013 (CIAC Rules). The arbitral tribunal issued Procedural Order No. 19 on 17‑02‑2026, imposing a cost of Rs 1,00,000 on the petitioner for refusing to proceed with cross‑examination and repeatedly raising a limitation plea.
  • Petitioner's Application: On 12‑01‑2026, the petitioner filed an application under Article 227 of the Constitution seeking dismissal of the arbitral order as barred by limitation and for relief from the cost imposition. The application was argued to be maintainable under Section 37 of the Arbitration and Conciliation Act, 1996.
  • Respondent's Opposition: The respondent submitted that the arbitration was ongoing, the seat of arbitration was New Delhi per CIAC Rule 29, and that Article 227 could not be invoked to interfere with procedural orders of an arbitral tribunal. It relied on Supreme Court precedents (SBP & Co. v. Patel Engg. Ltd., Deep Industries Ltd. v. ONGC, Bhaven Construction v. Sardar Sarovar Narmada Nigam Ltd., Tarini Prasad Mohanty v. Sunflag Iron and Steel Co. Ltd.) emphasizing the limited scope of judicial intervention.
  • Legal Provisions Cited: Sections 5, 9, 11, 27, 34, 37 of the Arbitration and Conciliation Act, 1996; non‑obstante clause of Section 5; and the specific appeal routes under Section 37.
  • Court’s Reasoning: The Court held that Article 227 is an extraordinary jurisdiction and cannot be used to challenge arbitral procedural orders unless the order falls within the narrow categories listed in Section 37. The cost order does not qualify, and the petitioner has an alternative remedy under Section 34 (challenge of the award) and Section 25(a) (recall of the order). The Supreme Court’s stance that high‑court interference in arbitral proceedings is permissible only in rare, exceptional cases was reiterated.

Final Outcome

  • The application under Article 227 is declared not maintainable and is dismissed.
  • The petitioner is directed to approach the arbitral tribunal within 15 days from the judgment date to seek recall of the cost order, where the reasonableness of the cost may be reconsidered.
  • The judgment also notes that an urgent certified copy of the judgment may be obtained upon compliance with formalities.

Topics: Arbitration Law, Article 227 Jurisdiction