MMTC Ltd Vs Sterlite Industries (India) Ltd
There was a plea that the dispute entertained by the arbitrators arose out of an independent contract not covered by the arbitration agreement and thus the arbitrators acted out of jurisdiction. The finding of the majority award of 2 arbitrators (one dissenting) was that all the sales took place in pursuance of the arbitration agreement between the parties. There was no evidence of the existence of any independent agreement. The issue was the scope of interference by court in the award made on the basis of majority view.
It was held that the plausible view taken by the majority was on the basis of the evidence adduced and the reviewing court should not determine whether the award of the dissenting arbitrator was more plausible than that of the majority. It was not open to the court u/s 34 to re-appreciate the evidence adduced before the arbitrators.
Uttam Singh Duggal & Co Ltd Vs Chief Engineer, Projet SetUK; Oil & Natural Gas Corporation Ltd Vs Saw Pipes Ltd
20012 RAJ 183 (Del)
Uttam Singh Duggal & Co Ltd Vs Chief Engineer, Projet SetUK
The appointment of the arbitrator and proceedings before the arbitrator were held under the 1996 Act. The arbitrator, being under the misconception that the proceedings were under the 1940 Act, filed the award for making it rule of the court. The Registry also fell in error by registering it as a suit and issued notice to the parties to file their objections.
It was held that section 36 provides that where the time for setting aside the award u/s 34 has expired or such application having been made, it has been refused , the award was enforceable under the CPC in the same manner as it were a decree of the court. Section 34 provides recourse to a court against an award only by way of an application for setting aside such award in accordance with sections 34(2) and (3). Thus the very act of the Registry in serving the parties with notices was void ab initio, illegal and not in accordance with the 1996 Act. As a result the registration of the award as a suit stands quashed.
In view of this, it is left to the parties to seek appropriate remedy in respect of the award at the appropriate forum and the question of jurisdiction over the arbitral proceedings may be raised before the said forum.
Section 34, 24, 28 & 31(3) - Effect of violation of mandatory provision of Act
2003(2) RAJ 1 (SC)
Oil & Natural Gas Corporation Ltd Vs Saw Pipes Ltd
The case examined the effect of violation of mandatory provisions of the 1996 Arbitration Act by the arbitrator. It was held that the jurisdiction or power of the arbitral tribunal is prescribed under the Act and if the award is de hors the said provisions, it would be, on the fact of it, illegal. The decision of the tribunal must be within the bounds to its jurisdiction conferred under the Act or the contract. In exercising its jurisdiction, the arbitral tribunal cannot act in breach of some provision of substantive law or the Act. If the tribunal has not followed the mandatory procedure as prescribed under the Act, it would mean that it has acted beyond its jurisdiction and therefore the award is patently illegal and may be set aside u/s 34.
Skanska Cementation India Ltd Vs.Bajranglal Agarwal
There was a petition for setting aside the award on the ground of denial of opportunity of being heard as their request for service of an advocate was rejected by the arbitrator.
It was held that it is clear that the petitioner had already put their case in writing and there was nothing to point out that any oral or written submission made has not been considered. It could also not be said that the petitioner was not given sufficient opportunity of contesting the proceedings. The discretion to permit engagement of advocates was within the discretion of the tribunal and the opportunity to engage lawyers was sought by both the parties who were equally rejected by the tribunal. Rejection of service of an advocate cannot be said to be a failure to give an opportunity to the petitioner to present their case.
The award may not be set aside on this ground.
Union of India Vs Moti Enterprises
There was a petition challenging the arbitration award. In respect of each of the awarded claims, the arbitrator had due regard to the material produced before him and to relevant provisions of the contract. The petitioner was unable to establish that the award by the arbitrator was in any manner contrary to public policy.
It was held that it will be impermissible for the court, having regard to the provisions of Section 34(2)(v)(b) to accept any of the contentions of the petitioner in view of the fact that the petitioner has been unable to sustain the contention that the arbitral award is contrary to public policy. It is a settled principle of law that a mere error of law would not amount to a breach of public policy within the meaning of 34(2)(v)(b). The Supreme Court has held that an arbitral award can be set aside only if the challenge falls under a ground that is contemplated by section 34. Since the arbitrator awarded the claims after careful consideration of all the facts, it would be impermissible for this court to interfere with the award in the absence of the petitioner having demonstrably established that the award is in any manner contrary to public policy.
ONGC Ltd Vs Saw Pipes Ltd
While interpreting the meaning of 'public policy' in this case, it was held that the term should be given a wider meaning. It can be stated that the concept of public policy connotes some matter which concerns public good and the public interest. What is good for the public or in public interest or what would be harmful or injurious to the public good or interest varies from time to time. However, an award, which is on the face of it, patently in violation of statutory provisions cannot be said to be in public interest. Such an award is likely to adversely affect the administration of justice.
Hence, the award should be set aside if it is contrary to -
Kesar Enterprises Vs DCM Sriram Industries Ltd
In the instant case, the arbitrator, a former Chief Justice of India, did not return a finding on every question that was raised. It was contended that the arbitrator did not appreciate and duly consider all the questions raised before him.
It was held that failure of the arbitrator to return a finding on every question raised before him did not amount to infraction of public policy; in such circumstances it would be deemed that the arbitrator rejected the contention. In the present case the arbitrator is a former Chief Justice of India and to predicate that he had not appreciated and duly considered all the questions raised before him would be extremely sanguine.
Jyoti Motors Vs Industrial Credit & Development Syndicate Ltd
This case discussed the impermissibility of condonation of delay for application for setting aside an award. The petitioner had filed an application for setting aside the award, however, it was not within the stipulated period u/s 34. The petitioner asked for condonation of delay u/Article 5 of the Limitation Act.
It was held that Article 5 of the Limitation Act applies where limitation has been prescribed under the Limitation Act itself and it has no applicability in arbitration cases. Section 34 itself prescribes the period of limitation for making the application for setting aside an award as also the time from which such period starts reckoning. Therefore Article 5 of the Limitation Act has no applicability even on sufficient cause being shown by the applicant.
Union of India Vs Nav Bharat Construction
In the instant case, the award was a unanimous one by three arbitrators and was served on the petitioner on 18.9.2000. The petitioner submitted an application for setting aside the award on 6.2.2001 after a delay of 20 days - the 3 months period had expired on 17.12.2000 and the 30 days extended period expired on 16.1.2001. The issue was whether the delay of 20 days could be condoned in view of the provisions of the 1996 Act.
It was held that the delay could not be condoned. Section 34(3) is a special law providing for a period of limitation different from the Limitation Act, thus the Limitation Act would not apply. In the 1996 Act, keeping in view the objective of Section 5 therein, the Legislature has made its intention clear in Section 34 which is in two parts, viz. (2) and (3). Section 34(1) provides that an award can be set aside only by an application in accordance with Section 34 (2) and (3), so both have to be complied with.
Section 34 (2) deals with the grounds for setting aside the award and section 34(3) deals with the procedural part. The same intention of restricting Court's interference beyond a maximum time fixed by the statute is expressed by the words 'but not thereafter'. So there is no doubt as to the Legislature's intention in categorically excluding the provisions of the Limitation Act.
Pushpa P Mulchandani Vs Admiral Rakhakrishin Tahilani
This case discussed the impermissibility of the applicability of the Limitation Act to proceedings under the 1996 Act.
It was held that notwithstanding that the 1996 Act contains no specific words of exclusion, an examination of the scheme of the Act would suggest that the intention is to exclude the application of sections 4 to 24 of the Limitation Act, which is clearly evidenced by the words 'but not thereafter' used at the end of the proviso to Section 34 (3). It is, therefore, not permitted for the court to permit an amendment of the petition, that too after the expiry of the period of limitation prescribed in the Arbitration Act.
Union of India Vs Punjab Communications Ltd; Vindhya Telelinks Limited Vs Bharat Sanchar Nigam Ltd
2003(4) RAJ 678 (HP)
Union of India Vs Punjab Communications Ltd
This case discussed the computation of the limitation period for a petition for setting aside an award. A signed copy of the award was received by the objector on 31.1.2000 and he filed the objection petition on 28.4.2000. It was held that the time was not to run from the date of delivery of the award to the party, but from the date of receipt of the award by the party intending to file objection.
Section 31(5) makes it obligatory for the arbitrator to deliver a signed copy of the award to each party. The time shall start running against a party for the purpose of section 34(3) from the date of receipt of such copy. In this case the arbitrator faxed a copy of the award to the parties and a photocopy was send through post on the date of making the award. Thus, the arbitrator had sent unauthentic copies of the award to the parties and for the purpose of filing the application, the time shall not run from the date of delivery of such copy. Since the signed copy was received by the objector on 31.1.2000, the limitation will start from then on. Therefore, the objection petition was within the prescribed time limit.
2003(1) RAJ 625 (Del)
Vindhya Telelinks Limited Vs Bharat Sanchar Nigam Ltd
The issue that was raised in this case was whether in the situation where an application was filed u/s 33 the period for filing a petition to set aside the award would commence on the disposal of the application u/s 33.
It was held that in view of section 34(3), an application for setting aside an award should be filed within 3 months from the date of receipt of the award. However, in case of any application filed u/s 33, the application for setting aside of the award was to be filed within 3 months from the disposal of the application u/s 33. Such disposal has to be in the manner similar to that of an arbitral award - it has to be in writing signed by the members of the arbitral tribunal, stating the reason on which it is based. Further, it must be delivered to each of the parties in the form of a signed copy.
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