On 13 January 2025, a division bench of the High Court of Delhi (“DHC”), in Aptec Advanced Protective Technologies AG v. Union of India[1] (“APTEC”), held that the Single Judge of the DHC erred in concluding that the arbitrator’s decision did not constitute an ‘interim award’ within the meaning of Section 2(c) of the Arbitration and Conciliation Act, 1996[2] (“Act”) and could not be set aside under Section 34 of the Act[3]. In Union of India v Aptec Advanced Protective Technologies AG[4] the Supreme Court dismissed the Special Leave Petition filed by the Union of India (“UOI”) against the DHC decision, effectively upholding the broader interpretation of what qualifies as a challengeable interim award (Diary No. 47311/2025).
This post examines the legal position on what constitutes an ‘interim award’ and analyses how the term has been interpreted by Indian courts through various judicial pronouncements. It analyses the rationale used by the Indian courts to distinguish between procedural orders and interim awards that conclusively decide substantive issues and also brings in a comparative perspective towards developing a clearer approach for Indian courts going forward.
Factual Background
In 2006, APTEC Advanced Protective Technologies AG, a Swiss Company, invoked arbitration against the UOI on the grounds of non-payment under a contract undertaken by them for supplying mountaineering boots. During the arbitration proceedings, APTEC filed certain applications before the arbitrator for seeking discovery of documents from UOI under Order XI, Rule 12 (application for production of documents) and Rule 14 (power to order production) of the Civil Procedure Code, 1908[5] (“CPC”). The arbitrator dismissed the applications for reasons set out in his decision. APTEC challenged the arbitrator’s decision before the Single Judge of the DHC under Section 34 of the Act.
However, the Single Judge dismissed the challenge on the ground that the arbitrator’s decision was not an interim award and therefore, could not be challenged under Section 34. This order was challenged before a Division Bench of the DHC under Section 37 of the Act (which permits appeals of decisions under Section 34)[6]. The Division Bench set aside the order and held that the arbitrator’s decision constituted an interim award under the Act.
The court reasoned that an order qualifies as an interim award if it gives a final finding of fact or on the issue on which parties are at dispute, even if it does not decide the main claim itself. While the arbitrator’s decision was nominally limited to dismissing APTEC’s discovery applications, the arbitrator went further in addressing those applications and made a final finding that the crampons supplied to the respondent were satisfactory and not incompatible – a substantive issue going to APTEC’s defence on the merits. Therefore, while the order was on procedural applications, it had the characteristics of a final decision on that specific issue, making it challengeable under Section 34 of the Act.
Meaning and Scope of Interim Awards
In India, while the term ‘arbitral award’ is defined under Section 2(c) the Act, the term ‘interim award’ is not statutorily defined. However, the meaning and scope of interim awards have been developed through various judicial pronouncements.
In M/s Indian Farmers Fertilizer Co. v. M/s Bhadra Products[7] (“Indian Farmers Fertilizer”), the Supreme Court of India (“Supreme Court”) dealt with the issue of whether the arbitrator’s decision on the issue of limitation constituted an interim award amenable to challenge under Section 34 of the Act. Relying upon its earlier decisions in Satwant Singh Sodhi v. State of Punjab (1999)[8] (“Satwant Singh Sodhi”) and McDermott International Inc. v. Burn Standard Co. Ltd. & Ors. (2006)[9], the Supreme Court clarified that an interim award is one that conclusively determines an issue between the parties and is final in all respects regarding that issue, such that it cannot be re-agitated again. In this case, since the issue of limitation between the parties was finally decided, the Supreme Court held that the arbitrator’s decision constituted an interim award and amenable to challenge under Section 34 of the Act.
It is important to note that the broad proposition in Indian Farmers Fertilizer does not extend to every preliminary determination by an arbitrator. In MCM Worldwide Private Limited v. Construction Industry Development Council (“MCM Worldwide”)[10], the Supreme Court clarified that where an arbitrator rejects a jurisdictional objection, including one founded on limitation, under Section 16(2) and (3) of the Act[11], the order cannot be treated as an interim award amenable to challenge under Section 34, irrespective of how conclusively it may appear to settle the issue, thereby creating a statutory carve-out within the provision.
In Goyal MG Gases v. Panam infrastructure Developers[12], the issue before the DHC was whether an order dismissing an application under Order 1 Rule X of the CPC (which allows for the additions or substitution of a plaintiff when suit is filed in the name of the wrong plaintiff), could be treated as an interim award. Relying upon its earlier decision in Rhiti Sports Management Pvt Ltd. v. Power Play Sports & Events Ltd.,[13] (“Rhiti Sports Management”) the DHC held that an order qualifies as an interim award, only if it pertains to a vital aspect of the dispute or relates to the merits of the dispute between the parties, and conclusively settles that dispute. In this case, since the arbitrators order rejecting the impleadment application did not decide a substantive question of law or address the merits of the case, it could not be regarded as an interim award.
Substance Over Form: Distinguishing Procedural order from an Interim Award
The necessity to discuss the 2025 decision in APTEC arises because the DHC reached a different conclusion than the 2018 decision of the DHC in Rhiti Sports Management on the same legal question. In both the cases, the central question was whether an arbitrator’s rejection of an application for additional evidence could be challenged as an ‘interim award’ under Section 34 of the Act. The core dispute in APTEC centred on whether the crampons supplied were incompatible and whether APTEC was entitled to unpaid payment from UOI. However, while dismissing the application for discovery of documents, the arbitrator’s findings were not limited to procedural matters but also touched upon the merits of the case, based on the DGQA (“Director General of Quality Assurance”) Report and other evidence, effectively settling a substantive issue in dispute and holding that the crampons were not defective or incompatible in nature. The division bench of the DHC although casted doubts on the necessity of such detailed findings for disposing off the application, but the arbitrator’s conclusion on the core issue was final and binding upon the parties. Therefore, the DHC held that since the order conclusively determined one of the substantive disputes, it qualified as an “interim award” hence amenable to challenge under Section 34 of the Act.
In contrast, the Rhiti Sports Management case involved an arbitrator’s order that simply rejected the petitioner’s application to file additional documents. The DHC found that this order was purely procedural and did not address or conclusively resolve any substantive issue in dispute. Unlike in APTEC, the arbitrator in this case did not make any findings on the merits of the case that would affect the parties’ rights in the arbitration. The arbitrator’s order was purely procedural. The DHC in M/S Cinevistaas Ltd. v. M/S Prasar Bharti[14] (“Cinevistaas”) reiterated that only orders which conclusively resolve a substantive issue in dispute can be considered interim awards. Routine procedural orders, such as those refusing adjournments, additional witnesses, or condonation of delay, do not meet this threshold.
International Perspective
In contrast to the Act, which remains silent on what constitutes an ‘interim award’, certain foreign jurisdictions such as the United Kingdom, provide certain statutory clarity on the constituents of an interim award. Although the UK Arbitration Act 1996 does not define the term ‘interim award’ in exact terms, its meaning is constructed from the power granted in Section 47[15]. This section empowers an arbitral tribunal to make an award on a distinct issue affecting the whole claim, or on part only of the claims submitted to it, at any stage of the proceedings.
Additionally, the High Court of Justice of England and Wales, in the case of ZCCM Investment Holdings PLC v. Kansanshi Holdings PLC & Anr.[16] (“ZCCM”), examined the distinction between an interim award and a procedural order, using the reasonable recipient test. In this decision, the central issue was whether a tribunal’s decision to dismiss certain claims on jurisdictional grounds constituted a challengeable ‘award’ or a non-challengeable ‘procedural’ order. To resolve this the court applied the reasonable recipient test. This Test requires the court to assess the decision from the perspective of a reasonable recipient – someone in the position of the parties at the time the decision was made, with all the relevant information available to them. The evaluation focuses on substance over form, considering whether the decision finally disposes of substantive issues and renders the tribunal functus officio of those issues. Ultimately, the test considers how a reasonable recipient, aware of the context and the tribunal’s intentions, would objectively interpret the decision’s character and effect.
The Reasonable Recipient Test provides a structural framework for distinguishing an interim award from a procedural order. In England, the test has been applied consistently (see e.g., Lesotho Highlands Developments Authority v. Impregilo SpA[17]; Travis Coal Restructured Holdings LLC v. Essar Global Fund Ltd.,[18] to determine what constitutes an interim award, offering a reliable and objective standard. The Indian courts, by contrast, have tended to approach this question formalistically, rather than a single unified inquiry into the order’s substance and effect. The courts ask whether an order touches the ‘merits’, but this inquiry is frequently anchored to category-specific markers: the kind of application before the tribunal (discovery, limitation), the language the tribunal used to describe its own decision, and whether the tribunal itself characterised the order as final. This is evident from the reasoning in APTEC and from the Supreme Courts intervention in MCM Worldwide. The result is a body of law that decides the question provision-by-provision, rather than through a consistent standard.
The reasonable recipient test offers a different starting point. It asks how a reasonable recipient, standing in the position of the parties, with full knowledge of the proceedings, would objectively understand the practical effect of the order. Adopting this lens in India would shift the inquiry towards a single, substance-focused question of practical effect. This would offer a more consistent basis for distinguishing interim awards from procedural orders and reduce disputes that have recurred across India.
Conclusion
The decision in APTEC and the Supreme Court’s subsequent affirmation mark a notable development in Indian arbitration law, but they also raise important considerations. By adopting a broad, substance-over-form approach to identify interim awards, courts may inadvertently create greater scope for judicial intervention at intermediate stages of arbitration proceedings. The risk is that arbitrators may become more cautious in their reasoning, knowing that substantive observations, even when unnecessary for disposing of a procedural application, could elevate an order into a challengeable interim award. This could result in piecemeal litigation, increased delays, and a chilling effect on the tribunals’ willingness to engage with merits-related evidence during procedural hearings.
Presently what constitutes as an interim award is largely governed by the interpretations given by the courts and underscores the need for legislative clarity on the definition of ‘interim award’ under the Act. Therefore, a more structured legislative definition of the term ‘interim award’ would offer greater predictability and help courts calibrate the threshold more precisely.
[1] Aptec Advanced Protective Technologies AG v. Union of India (Division Bench, High Court of Delhi, 13 January 2025).
[2] The Arbitration and Conciliation Act, 1996 (India), s 2(c), available at https://www.indiacode.nic.in.
[3] The Arbitration and Conciliation Act, 1996 (India), s 34.
[4] Union of India v. Aptec Advanced Protective Technologies AG, Special Leave Petition (C) No. 47311/2025, Order (Supreme Court of India, 26 September 2025).
[5] The Code of Civil Procedure, 1908 (India), Order XI, Rules 12 and 14.
[6] The Arbitration and Conciliation Act, 1996 (India), s 37.
[7] M/s Indian Farmers Fertilizer Co. Ltd v. M/s Bhadra Products (Supreme Court of India).
[8] Satwant Singh Sodhi v. State of Punjab, (1999) 1 SCC 1131 (Supreme Court of India).
[9] McDermott International Inc. v. Burn Standard Co. Ltd & Ors, (2006) 5 SCC 1679 (Supreme Court of India).
[10] MCM Worldwide Private Limited v. Construction Industry Development Council 2026 INSC 425.
[11] The Arbitration and Conciliation Act, 1996 (India), s 16.
[12] Goyal MG Gases (Pvt) Ltd v. Panam Infrastructure Developers (Pvt) Ltd, 2023 Delhi High Court 2276 (Division Bench, 29 March 2023).
[13] Rhiti Sports Management Pvt. Ltd v. Power Play Sports & Events Ltd (High Court of Delhi, 2018).
[14] M/S Cinevistaas Ltd v. M/S Prasar Bharti, 2007 11 Scale 531 (High Court of Delhi).
[15] Arbitration Act 1996 (c 23) (UK), s 47.
[16] ZCCM Investment Holdings PLC v. Kansanshi Holdings Ltd and Kansanshi Mining PLC [2019] EWHC 1285 (Commercial Court, 22 May 2019).
[17] Lesotho Highlands Development Authority v. Impregilo SpA [2005] UKHL 43 (UK Supreme Court, 30 June 2005).
[18] Travis Coal Restructured Holdings LLC v. Essar Global Fund Ltd [2014] EWHC 2510 (Commercial Court, 25 July 2014).
Author(s)
Gunjan Sharma
Student at RGNUL, Punjab