The Supreme Court has held that a High Court, while exercising appellate jurisdiction under Section 37 of the Arbitration and Conciliation Act, 1996, cannot remit proceedings arising from a Section 9 order to an Arbitral Tribunal and direct the Tribunal to treat them as an application under Section 17, even with the consent of the parties.
A Bench of Justice Aravind Kumar and Justice Prasanna B. Varale delivered the judgment in Union of India & Ors. v. Hariom Projects Pvt. Ltd., reported as 2026 INSC 1044, on September 18, 2026.
Hariom Projects Pvt. Ltd. had been awarded a contract by the Union of India for providing Administrative and Training Infrastructure (Phase-I) at NDA Khadakwasla. Disputes subsequently arose regarding adjustments, payment calculations and design issues.
The company approached the Bombay High Court seeking constitution of a Dispute Resolution Board (DRB). The DRB was subsequently constituted but rejected the company's claims.
The company thereafter invoked the arbitration clause and sought appointment of a Sole Arbitrator. Meanwhile, the Union issued a show-cause notice and demanded recovery of approximately ₹1.46 crore, alleging overpayment based on a corrected escalation formula.
Hariom Projects subsequently approached the District Judge, Pune under Section 9 of the Arbitration Act, seeking interim protection, including an injunction restraining the Union from cancelling, terminating or repudiating the contract.
The application was dismissed on October 15, 2025. The company then filed an appeal under Section 37 before the High Court and also sought appointment of an arbitrator under Section 11.
During the pendency of the proceedings, the Union terminated the work order on January 3, 2026. The High Court stayed the termination and subsequently appointed Maj. Gen. R.K. Mattu as Sole Arbitrator.
The High Court directed that the proceedings pending before it be remitted to the Arbitral Tribunal and treated as an application under Section 17 of the Arbitration Act.
The Union of India challenged this part of the High Court's order before the Supreme Court.
The Supreme Court held that appellate jurisdiction under Section 37 is exclusively vested in the Court. An Arbitral Tribunal exercising powers under Section 17 does not possess appellate jurisdiction over an order passed by a competent court under Section 9.
The Court observed that the nature and source of the powers exercised by a court under Section 37 and those exercised by an Arbitral Tribunal under Section 17 are distinct and cannot be interchanged merely by remitting the proceedings to the Tribunal.
The Supreme Court clarified that even though the Arbitral Tribunal had been constituted with the consent of the parties, the High Court could not transfer its statutory appellate proceedings to the Tribunal.
At most, after constitution of the Tribunal, the High Court could have granted the claimant liberty to independently approach the Tribunal under Section 17 for any interim measures available in law.
The Supreme Court therefore set aside the High Court's order to the limited extent that it remitted the Section 37 proceedings to the Arbitral Tribunal and directed that they be treated as a Section 17 application.
However, the Court did not disturb the constitution of the Arbitral Tribunal or the ongoing arbitration proceedings. Since the Tribunal was already seized of the disputes and the parties had subsequently entered into a Supplementary Agreement dated April 24, 2026, the Court permitted the Tribunal to adjudicate the remaining disputes, with both parties free to raise their contentions in accordance with law.
The appeal was accordingly disposed of.
Case: Union of India & Ors. v. Hariom Projects Pvt. Ltd.
Citation: 2026 INSC 1044
Date of Judgment: September 18, 2026
Bench: Justice Aravind Kumar and Justice Prasanna B. Varale
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