Arbitral Tribunal Is Final Authority On Interpreting  Contract; Writ Courts Must Show Restraint: Orissa HC

“Parties have to wait until the award is pronounced… unless a right of appeal is available under Section 37 of the Act even at an earlier stage.” - Division Bench of the Orissa High Court (Chief Justice Harish Tandon and Justice M.S. Raman) allowed Writ , setting aside a Single Judge’s order that had interfered under Articles 226/227 with an arbitral tribunal’s Section 16 ruling on stamp duty. Reaffirming the narrow window for writ intervention in ongoing arbitrations, the Bench held that interpreting the nature of the contract—and, by extension, the stamp duty question—lies within the arbitral tribunal’s domain, and any grievance can be raised under Section 34 after the award.

A 2004 agreement granted Sunflag an exclusive right to purchase iron ore upon commencement of mining operations; subsequent agreements followed, and the mining lease issued in 2009. Disputes were referred to arbitration on a Section 11(6) appointment. After pleadings and counter-claim, the respondent moved a Section 16 application arguing the agreement was, “in effect, a sale agreement” requiring higher stamp duty as a conveyance and must be impounded. The tribunal rejected that plea, holding the 2004 instrument was an agreement for sale, not a sale deed. The respondent then invoked Articles 226/227; the Single Judge set aside the tribunal’s view and ordered impounding—prompting this intra-court appeal.
At the core: when, and how far, can a High Court exercise writ/supervisory jurisdiction to upset interlocutory orders of an arbitral tribunal—especially on contract interpretation and stamping? The Division Bench traced the settled line from SBP & Co. v. Patel Engineering, Deep Industries Ltd. v. ONGC, Punjab State Power Corporation Ltd. v. EMTA Coal, and Bhaven Construction v. Executive Engineer. The thread is consistent: the Arbitration Act is a “self-contained code”; writ interference mid-arbitration is exceptional; and only orders disclosing a patent lack of inherent jurisdiction, perversity staring in the face, or bad faith warrant intervention.

The Court put it plainly: “The writ Court should refrain from making any observation which would impact the decision to be taken by the arbitral tribunal at the time of passing the award,” stressing that parties are not remediless—Section 34 remains available to challenge in-between orders alongside the award.
The Division Bench held that deciding whether the 2004 instrument is a sale agreement or an agreement for sale “depends upon the assimilation of different clauses” and “comes within the periphery of an interpretation of a contract,” which the tribunal is best placed to undertake. Even if another view is possible, that does not license writ review. Echoing Deep Industries, the Bench underscored that permitting challenges “against every order made by the Arbitral Tribunal” would defeat the Act’s objective of minimal judicial intervention and speedy resolution.

Finding the Single Judge had “entered into the domain of the arbitral tribunal,” the Bench set aside the impugned order and restored the tribunal’s Section 16 decision. The Court reiterated that the respondent may agitate all stamping/contention issues in a Section 34 petition, if necessary, after the award.

The Orissa High Court’s ruling is a firm reminder that arbitral autonomy is not a slogan but a statutory command: writ courts step in only where jurisdictional perversity or bad faith is self-evident. Questions like whether a 2004 mining-linked agreement is a sale deed or merely an agreement for sale—and the stamp duty consequences—belong to the arbitral forum first, with curial oversight reserved for the post-award stage.

Date of Decision: August 12, 2025