Introduction
In Union of India & Ors. v. Hariom Projects Pvt. Ltd. [2026 INSC 1044], the Supreme Court considered whether a High Court, while exercising appellate jurisdiction under Section 37(1)(b) of the Arbitration and Conciliation Act, 1996 (the "Arbitration Act") against rejection of an application under Section 9, could by consent of the parties remit the appellate proceedings to a subsequently constituted arbitral tribunal and direct the tribunal to treat those proceedings as an application under Section 17.
The Supreme Court held that such a course is impermissible. Appellate jurisdiction under Section 37 is vested exclusively in the court contemplated under Section 2(1)(e) of the Arbitration Act. An arbitral tribunal exercising powers under Section 17 does not exercise appellate jurisdiction over an order passed by a competent court under Section 9.
The Supreme Court clarified that the powers exercised by an appellate court under Section 37 and those exercised by an arbitral tribunal under Section 17 are distinct in nature and source. They cannot be interchanged merely by transmitting or remitting the appellate proceedings to the tribunal, even where the tribunal has subsequently been constituted.
At the same time, the Supreme Court clarified that, after constitution of the arbitral tribunal, the High Court could have granted liberty to the claimant to independently approach the tribunal under Section 17 for such interim measures as may be available in law.
In this article, we navigate through the facts of the case and the findings rendered by the Supreme Court.
Brief Facts
Hariom Projects Pvt. Ltd. was awarded a contract by the Union of India for the provision of Administrative and Training Infrastructure (Phase-I) at NDA Khadakwasla. During execution of the contract, disputes arose between the parties concerning adjustments, payment calculations and design issues.
Hariom Projects filed a writ petition seeking constitution of a Dispute Resolution Board ("DRB"). The writ petition was allowed and the DRB was directed to adjudicate the claims on merits. By an order dated 26 April 2025, the DRB rejected all claims raised by Hariom Projects.
Hariom Projects thereafter invoked the arbitration clause by notice dated 6 May 2025 and sought appointment of a sole arbitrator. The Union subsequently issued a show-cause notice alleging deficiencies in contractual performance and, on 21 July 2025, raised a demand for recovery of approximately INR 1.46 crore on the basis of a corrected escalation formula.
Seeking interim protection, Hariom Projects filed an application under Section 9 of the Arbitration Act before the District Judge, Pune. Among other reliefs, it sought an injunction restraining the Union from cancelling, terminating or repudiating the contract. The Section 9 application was dismissed on 15 October 2025.
Hariom Projects challenged the dismissal by filing an appeal under Section 37 of the Arbitration Act before the Bombay High Court. It also filed a separate petition under Section 11 seeking appointment of an arbitrator.
During the pendency of the Section 37 appeal, the Union terminated the work order on 3 January 2026. The High Court stayed the termination on 5 January 2026 and thereafter continued the status quo arrangement.
On 12 January 2026, after hearing the parties, the High Court suggested that they consider proceeding before an arbitrator so that the factual aspects could be examined and an appropriate working arrangement could be evolved. The parties agreed to arrive at a consensus on the identity of the arbitrator.
By order dated 13 January 2026, the High Court appointed a sole arbitrator. It continued the existing status quo arrangement for a further two weeks and left it open to the tribunal to extend, vary or modify the interlocutory arrangement.
The High Court further directed that the proceedings pending before it under Section 37 be remitted to the arbitral tribunal and treated as an application under Section 17 of the Arbitration Act.
The Union challenged only this direction before the Supreme Court. It did not challenge the appointment of the sole arbitrator.
Arguments from Both Sides
The Union contended that an order passed by a competent court under Section 9 could be challenged only through the statutory appellate remedy under Section 37(1)(b). Such appellate jurisdiction, it was submitted, vested exclusively in the court and could not be exercised by an arbitral tribunal.
It was further submitted that the powers exercised by a court under Sections 9 and 37 are fundamentally distinct from the powers conferred upon an arbitral tribunal under Section 17. Since an arbitral tribunal is a creature of the parties' agreement and the Arbitration Act, it could not exercise statutory appellate or supervisory jurisdiction vested in a court.
The Union therefore argued that directing the tribunal to reconsider the subject matter of the Section 37 appeal by treating the appellate proceedings as a Section 17 application amounted to an impermissible delegation of the High Court's appellate function and was contrary to the statutory scheme of the Arbitration Act.
Hariom Projects accepted before the Supreme Court that the direction requiring the arbitral tribunal to treat the pending Section 37 proceedings as proceedings under Section 17 could not be sustained in law.
Hariom Projects, however, submitted that the constitution of the arbitral tribunal should be preserved. It was pointed out that the tribunal had already commenced proceedings and that, with its intervention, the parties had entered into a Supplementary Agreement dated 24 April 2026 permitting completion of the work, while the remaining disputes continued before the tribunal.
Findings of the Supreme Court
The Supreme Court set aside the High Court's order only to the extent that it remitted the Section 37 proceedings to the arbitral tribunal and directed that they be treated as an application under Section 17.
The Supreme Court noted that the Section 37 appeal arose from the rejection of Hariom Projects' application under Section 9 for interim relief, which had included a prayer restraining termination of the contract. During pendency of that appeal, the contract had been terminated and the effect of the termination had subsequently been stayed by the High Court.
The Supreme Court further noted that, in the connected proceedings under Section 11, a sole arbitrator had been appointed by consent and the arbitral tribunal had therefore been constituted.
The Supreme Court held that the constitution of the tribunal did not permit the High Court to transfer its statutory appellate function to the tribunal. Appellate jurisdiction under Section 37 is vested exclusively in the "Court" contemplated under Section 2(1)(e) of the Arbitration Act.
An arbitral tribunal acting under Section 17 exercises jurisdiction to grant interim measures in arbitral proceedings. It does not sit in appeal over an order passed by a competent court under Section 9.
The Supreme Court therefore held that requiring the arbitral tribunal to examine the subject matter of a statutory appeal under Section 37 by treating the appellate proceedings themselves as a Section 17 application was impermissible.
The Supreme Court emphasised that the nature and source of the powers exercised by an appellate court under Section 37 are distinct from the powers conferred upon an arbitral tribunal under Section 17. Those powers cannot be interchanged merely by transmitting or remitting the appellate proceedings to the tribunal.
The Supreme Court clarified the course that could lawfully have been adopted. Once the arbitral tribunal was constituted, the High Court could have granted liberty to Hariom Projects to independently approach the tribunal under Section 17 for such interim measures as may be available in law.
The Supreme Court also noted that the prayer in the original Section 9 application seeking to restrain termination of the contract had already spent itself because the work order had been terminated on 3 January 2026. Any further or consequential interim protection would therefore have to be considered in light of subsequent events and the relief specifically sought by Hariom Projects.
The Supreme Court did not disturb the constitution of the arbitral tribunal. It was informed that the tribunal was already seized of the disputes, had passed several orders and that the parties had entered into a Supplementary Agreement dated 24 April 2026.
In these circumstances, the Supreme Court left all other issues arising between the parties to be adjudicated by the tribunal and expressly permitted both sides to raise all contentions available to them in law.
The Supreme Court clarified that its order was being passed to settle the legal position concerning the impermissibility of remitting Section 37 appellate proceedings to an arbitral tribunal as a Section 17 application. With that limited modification, the appeal was disposed of.
Comment
The judgment in Union of India (supra) draws a clear jurisdictional line between the statutory appellate power of a court under Section 37 and the power of an arbitral tribunal to grant interim measures under Section 17.
The constitution of an arbitral tribunal during the pendency of a Section 37 appeal does not transform the nature of the pending appellate proceedings. A statutory appeal against an order under Section 9 remains an appeal for the court to decide in accordance with Section 37.
The decision is also significant because it distinguishes between remitting an existing court proceeding to the tribunal and permitting a party to initiate an independent application before the tribunal. The former is impermissible; the latter remains available, subject to the requirements of Section 17 and the subsequent circumstances of the dispute.
This distinction preserves the statutory architecture of the Arbitration Act. Sections 9 and 37 confer powers upon courts, while Section 17 confers a separate power upon the arbitral tribunal. Party consent cannot be used to merge these distinct jurisdictions or authorise the tribunal to exercise appellate powers that the statute has vested in the court.
The judgment also demonstrates the importance of considering intervening events when dealing with interim relief. Where the act sought to be restrained has already occurred, the original interim prayer may no longer survive in its original form. Any further protection must be sought on the basis of the changed factual position and the relief that remains legally available.
At the same time, the Supreme Court adopted a limited corrective approach. Since the tribunal had already been constituted, proceedings had advanced and the parties had entered into a supplementary arrangement, the Court did not unsettle the arbitral process. It confined its interference to correcting the jurisdictionally impermissible direction in the High Court's order.
The decision therefore reinforces that procedural flexibility and party consent in arbitration operate within the boundaries created by statute. A court may facilitate recourse to Section 17 after constitution of the tribunal, but it cannot transfer its own Section 37 appellate jurisdiction to the tribunal.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
