What the Supreme Court said on writ courts and patent lack of inherent jurisdiction of arbitral tribunals

The Supreme Court on Friday held that approaching writ courts against dismissal of an arbitration application by an arbitrator can only be entertained if it is clear that there was a patent lack of inherent jurisdiction..In its 2019 judgment in Deep Industries Ltd. v. ONGC, the Court had held that while the Constitutional provisions under Articles 226 and 227 are untouched by the provisions of the Arbitration Act, High Courts ought to be circumspect while entertaining petitions against dismissal of arbitration applications.While interfering with the arbitration proceedings, High Courts should act in a manner so as to restrict such interference to cases where the arbitration orders are passed while "patently lacking in inherent jurisdiction"..In the instant petition before the Supreme Court, the Bench of Justices Rohinton Nariman, Navin Sinha and Indira Banerjee noted that parties to arbitration agreements are invoking Article 227 jurisdiction of the High Courts even where there is no patent lack in inherent jurisdiction. .The judgment passed on Friday states,."...a foray to the writ Court from a section 16 application being dismissed by the Arbitrator can only be if the order passed is so perverse that the only possible conclusion is that there is a patent lack in inherent jurisdiction. A patent lack of inherent jurisdiction requires no argument whatsoever – it must be the perversity of the order that must stare one in the face."Supreme Court.In the instant case, the petitioner, Punjab State Power Corporation, had invoked the High Court's writ jurisdiction to challenge an order passed by an arbitral tribunal. The High Court had dismissed the writ on the ground that the "drill of Section 16" of the Arbitration Act was not fully followed and that the plea was filed at a time when the arguments before the tribunal had concluded..It was against the dismissal of this writ that the petitioner moved the Supreme Court. However, the Supreme Court not only dismissed the petition but also proceeded to impose costs of Rs 50,000 on the petitioner noting that this case does not fall under the "extremely exceptional category" of cases as was set out in the judgment of Deep Industries..The Apex Court added that while the High Court dismissed the writ petition, it should have done so on the grounds that there is no patent lack in inherent jurisdiction. However, this legal principle was not cited as the reason for dismissal by the High Court, which also fell short of imposing heavy costs on the petitioner. .Resultantly, the Supreme Court proceeded to dismiss the petition with costs of Rs. 50,000 to be paid to the Supreme Court Legal Services Committee within two weeks..The petitioner was represented by Senior Advocate KV Viswanathan.Respondent was represented by Advocate Abhimanyu Bhandari and Nattasha Garg..Read Order: