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Kerala High Court: Limits on Arbitrator Authority Defined

In a recent ruling, the Kerala High Court has clarified that an arbitrator does not possess the authority to appoint an Advocate Commissioner pursuant to Section 26 or Section 27 of the Arbitration Act for conducting inspections in land acquisition disputes. Justice Murali Purushothaman emphasized the limited scope of judicial intervention in arbitration proceedings, usually necessitating parties to await the arbitration award or follow the established appeal process outlined in the law.

According to Justice Murali Purushothaman, the provisions under Section 27 of the Arbitration Act can be invoked to seek the Court's assistance in gathering evidence, such as the issuance of a Commission to record statements from witnesses beyond the purview of the arbitral tribunal. However, these provisions cannot be utilized to appoint an Advocate Commissioner responsible for inspecting a property to determine its market value. Consequently, the application for appointing an Advocate Commissioner, as in the Ext. P4 application, cannot be entertained by the Arbitrator, either under Section 26 or Section 27 of the Arbitration Act.

The case at hand revolved around the petitioner's property, which had been acquired for the expansion of National Highway 66. The compensation for the petitioner had been determined by the competent authority under the National Highways Act of 1956, and an award was subsequently issued. Dissatisfied with the award, the petitioner filed an arbitration application before the 1st respondent arbitrator, invoking Section 3G(5) of the NH Act.

While the arbitration application was pending, the petitioner submitted an application requesting the appointment of an Advocate Commissioner, alongside a Surveyor and Technical expert, to inspect the properties and provide a comprehensive report on various aspects. However, the Arbitrator rejected this application.

In response to this rejection, the petitioner approached the High Court, contending that the refusal to appoint an Advocate Commissioner amounted to a jurisdictional error. The petitioner argued that the Arbitrator possessed the authority under Section 26 of the Arbitration Act to appoint an Advocate Commissioner in conjunction with a Surveyor and Technical expert.

Section 3G(5) of the Arbitration Act stipulates that when a dispute arises regarding compensation determined by the competent authority, it should be resolved through arbitration, applying the provisions of the Arbitration Act. Section 26 deals with the appointment of one or more experts by the arbitral tribunal to report on specific issues to be determined by the tribunal. Section 27 allows a party or arbitral tribunal to seek assistance from the Court in obtaining evidence from witnesses.

The petitioner's legal counsel cited the case of Harbanslal Sahnia & Anr v. Indian Oil Corporation Ltd & Ors(2003) to argue that the High Court could exercise its writ jurisdiction even when alternative remedies were available.

In contrast, the respondents' legal counsel contended that the petitioner should have challenged the final award under Section 34 of the Arbitration Act, making the writ petition inadmissible. They relied on the cases of SBP and Co. v. Patel Engineering Ltd and Anr (2005) and National Highway Authority of India v. Jabeena Beevi & Ors (2021) to support their arguments.

The central question before the court was whether the Arbitrator possessed the authority to appoint an Advocate Commissioner under Section 26 or Section 27 of the Arbitration Act. The examination of the Arbitrator's powers to appoint experts under Section 26 revealed that this provision did not extend to the appointment of an Advocate Commissioner unless the said advocate was an expert in specific issues.

The Court further ruled that Section 27 could only be invoked to seek the Court's assistance in gathering evidence from witnesses or obtaining documents, not for the appointment of an Advocate Commissioner for property inspection.

Citing the non-obstante clause in Section 5 of the Act, the Court underscored that judicial intervention in arbitration matters is limited unless explicitly provided for in the Act. The Court also invoked SBP and Co. (supra) to emphasize that not every order issued by the Arbitral Tribunal can be corrected by writ courts under Article 226 or 227 of the Constitution.

Consequently, the Court unequivocally determined that an arbitrator lacks the authority to appoint an Advocate Commissioner under Section 26 or 27 of the Arbitration Act. In the precedent set by SBP and Co. (supra), the Apex Court highlighted the general principle that parties involved in arbitration should typically await the award before seeking remedies, unless an appeal is available under Section 37 of the Arbitration Act. The ruling further stressed the need for minimal judicial intervention during ongoing arbitration proceedings. In light of these findings, the Court dismissed the petition.

Case Title: M/S Punarnava Ayurveda Hospital Pvt Ltd v. The Arbitrator For NH 66 & District Collector Case Number: WP(C) No. 29228 of 2023