latest update (24.08.2018)

The Law Journal

latest update (24.08.2018)

Arbitration and Conciliation Act, 1996 Section 34 - Jurisdiction – Agreement provided - “The parties hereto agree to submit to the exclusive jurisdiction of the courts in Mumbai in Maharashtra (India).” - Once courts in Mumbai have exclusive jurisdiction it is clear that it is the Mumbai courts and the Mumbai courts alone, before which a Section 34 application can be filed - The arbitration that was conducted at Delhi was only at a convenient venue earmarked by the National Stock Exchange, will not create jurisdiction.(2018)2 SCeJ 1404
Arbitration and Conciliation Act, 1996 Section 34 - Framing of issues and leading of oral evidence - Speedy resolution of arbitral disputes has been the reason for enacting the 1996 Act, and continues to be the reason for adding amendments to the said Act to strengthen the aforesaid object - Quite obviously, if issues are to be framed and oral evidence taken in a summary proceeding under Section 34, this object will be defeated - It is also on the cards that if Bill No.100 of 2018 is passed, then evidence at the stage of a Section 34 application will be dispensed with altogether – We clarify the legal position by stating that an application for setting aside an arbitral award will not ordinarily require anything beyond the record that was before the Arbitrator - However, if there are matters not contained in such record, and are relevant to the determination of issues arising under Section 34(2)(a), they may be brought to the notice of the Court by way of affidavits filed by both parties - Cross-examination of persons swearing to the affidavits should not be allowed unless absolutely necessary, as the truth will emerge on a reading of the affidavits filed by both parties. (2018)2 SCeJ 1404

Arbitration and Conciliation Act, 1996 (26 of 1996) - Section 34, 42 - Jurisdiction of a Court to entertain application under Section 34 of the Arbitration and Conciliation Act, 1996 - Respondent resides at Latur, delivery of cotton bales was taken at Latur and the place of business of respondent was at Latur - Cotton bales were dispatched by the appellant from Raichur supported by all bills/invoices specifically mentioning that subject to Raichur jurisdiction - The dispute arose and the matter was referred to Industrial Facilitation Council, Bangalore Parties participated in the arbitration proceedings in Bangalore without raising objection with regard to the jurisdiction of the Karnataka High Court referring the matter to arbitration or the jurisdiction of Industrial Facilitation Council to decide the dispute - Arbitration proceeding was concluded within the jurisdiction of Raichur Court - The only forum available to respondent was to make an application under Section 34 of the Act before the Civil Court of original jurisdiction at Raichur - Award challenged by filing an application under Section 34 of 1996 Act before the District Court at Latur, Maharashtra Dismissed - Exercise of jurisdiction by such court shall be against the provision of Section 42 of the Act. Held, Indisputably, the Arbitration proceeding has been conducted within the jurisdiction of Raichur court, which has jurisdiction as per Section 20 of the Code of Civil Procedure and is subordinate to the High Court of Karnataka which entertained Section 11 Application. Hence, the Award cannot be challenged before a Court subordinate to the High Court of Bombay. Exercise of jurisdiction by such court shall be against the provision of Section 42 of the Act. (2016)3 P.L.R.SC 603
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34 - A clause for Price Reduction Schedule (PRS) for delay in delivery was stipulated in the purchase order - As per the PRS, as a consequence of delay in delivery, price was to be reduced by 1% of the total order value per week, subject to maximum of 10% of the total order value - Parties having clearly understood that the amount claimed was on account of liquidated damages as it was incumbent to aver and prove that it had suffered a loss - Has not placed any material before the arbitration to show that on account of delayed delivery any penalty was imposed - Had a back to back Contract and there is nothing on record to show that on account of the delayed delivery any penalty was imposed. (181) P.L.R. (Del.)
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34 - Arbitrator has awarded interest @ 12% per annum on the delayed payment for the work done - However, future interest @ 9% per annum has been awarded from the date of the award till the entire awarded amount is paid to the claimant - It lies well within the jurisdiction of an arbitrator to award future interest just as it is within his domain to award interest for all stages i.e. pre, pendente lite and post award periods. (176) P.L.R.
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34 - Award - Objection - Even if the petitioner submits that there was no authorization to his elder brother to arbitrate between the parties - The very fact that he did not challenge the order/award by way of filing objection under Section 34 of the Act within the prescribed time i.e. within a period of three months or within the extended period of 30 days, which cannot be further extended in any case, the objection filed by him is clearly barred - It was for him to file objection immediately before the executing court that the award is contrary to the provisions of law. (178) P.L.R.
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34 - Award - Overhead expenses - Hudson formula - A contractor is awarded damages for delay based upon the originally estimated margin, divided by the originally estimated period of construction performance, multiplied by the extra period taken for performance of work and in this way the figure so worked out is the quantum awardable - No reason to interfere with the calculation made. (176) P.L.R.
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34 - Bare perusal of the indicated award would reveal that the petitioners-JDs have raised similar preliminary objections in their reply before the Arbitrator, which, they now sought to urge, in the present petition - Negated the same very objections - JDs have not challenged the pointed arbitral award u/s 34 of the Act and it has already attained the finality - That means, all the objections, now taken by them, have already been considered and negated by the Arbitrator in the award. (174) P.L.R.
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34 - Court would have the jurisdiction to condone delay in re-filing even if the period extends beyond the time specified in Section 34(3) of the said Act - However, the Court would have to be satisfied that the petitioner had pursued the matter diligently and the delays were beyond his control and were unavoidable - It is also emphasised that a liberal approach in condoning the delay in refilling an application under Section 34 of the Act is not called for as it would defeat the purpose of specifying an inelastic period of time within which an application for setting aside an award under Section 34 of the Act could be preferred. (174) P.L.R. (Del.)
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34 - Directions issued - To all the Objecting Court in the States of Punjab and Haryana & U.T. Chandigarh to decide the objections if any filed under Section 34 of the 1996 Act on the basis of facts & affidavits and not by recording of evidence by framing issues and taking the evidence. (182) P.L.R.
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34 - HUDA - After receipt of 25% of the amount - Possession of the land was to be delivered within 90 days from the date of issue of the allotment letter but the respondent failed to hand over the land as committed - Appellant was constrained to abandon the whole contract and decided to surrender the land - Arbitrator was the Chief Administrator, HUDA and may be for that reason he thought it advisable to adhere to the guidelines issued by HUDA through Chief Administrator, little understanding that the appellant was put to harassment and financial loss due to delay caused by HUDA itself - Respondent shall pay the amount of 10% amounting to Rs.76,35,233/- with interest at the rate of 12% per annum - HUDA. (178) P.L.R.
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34 - Interest on interest is permissible. (183) P.L.R.
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34 - Limitation - Objection - Since in the instant case, the appellant has refused the service of summons, the presumption under Section 27 of the General Clauses Act, 1897 has to be drawn against the appellant - In essence, registered notice sent by registered post at the correct address is deemed to have been served - General Clauses Act, 1897 (10 of 1897). (180) P.L.R.
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34 - Merely because the award does not contain the deliberations of the Arbitral Tribunal in great detail, it cannot per se be held that there is no application of mind - There is no format of an award prescribed - The Arbitral Tribunal is not expected to deliver an award like a judgment of court - All that is required is that the Arbitral Tribunal should have considered the material and returned a finding with brief reasoning - If the technical members have examined the scope of the work contained in conflicting clauses and the work actually executed, it would be sufficient for the technical members to opine that the work falls under one clause or the other - They are not expected to explain in great detail, the basis of their formation of such an opinion. (178) P.L.R. (Del.)
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34 - Objections - State is not in appeal against the order therefore it would neither be legally necessary to frame issues or take evidence with respect to the question of validity of the award on point of bias - If an award is otherwise dishonest then the arbitrator's retirement from service may be a material fact on account of the award being passed one day short of superannuation - However, no reason whatsoever has been assigned in the impugned order to show that the conclusions reached by the Arbitrator were dishonest or that the order reeked of the bad odour of extraneous considerations at play - Award - Upheld. (175) P.L.R.
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34 - Once therefore adjustment which is pleaded in the objections under Section 34 of the Act was not claimed before the Arbitrator, the court below has rightly disallowed the entitlement to raise such a claim for the first time in objections under Section 34 of the Act. (174) P.L.R. (Del.)
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34 - Scope of interference of the Court is very limited - Court would not be justified in reappraising the material on record and substituting its own view in place of the Arbitrator's view - Where there is an error apparent on the face of the record or the Arbitrator has not followed the statutory legal position, then and then only it would be justified in interfering with the award published by the Arbitrator - Once the Arbitrator has applied his mind to the matter before him, the Court cannot reappraise the matter as if it were an appeal and even if two views are possible, the view taken by the Arbitrator would prevail. (S.C.)(179) P.L.R.
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34 - Section 14 of the Limitation Act apply for the purpose of proceedings under Section 34 of the Arbitration Act, I do not find any good reason to exclude the application of provisions of Section 17 of the Limitation Act - Hence, the application filed by the State cannot be dismissed at threshold only because this is beyond the period prescribed under Section 34(3) of the Arbitration Act, as the State is seeking to invoke jurisdiction of the court referring to Section 17 of the Limitation Act, 1963 (36 of 1963). (179) P.L.R.
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34 - There is no provision provided under the 1996 Act empowering the Objecting Court to take evidence against & in support of the objection, in essence, while dealing with the objections, parties are not required to lead evidence - Objections have to be decided summarily. (182) P.L.R.
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34 - Until and unless the award suffers from illegality as statutorily prescribed under section 31(3) of the Act, the same cannot be interfered with. (182) P.L.R.
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34 - Until and unless the award suffers from illegality as statutorily prescribed under Section 34 of the Act, the same cannot be interfered with - All the payments pertained to the year 1993 - The claim was filed in 2001 - As per the provisions of Section 43 of the 1996 Act, the provisions of Limitation Act are applicable to the arbitration proceedings, thus, it cannot be said that the applicability of the Limitation Act expressly included for determination of the dispute by the Council - I do not find any illegality and perversity in the impugned order and as well as the award, by which the claim made by the appellant was found to be, ex-facie, time barred and the orders cannot be said to have been passed without jurisdiction - Limitation Act, 1963 (36 of 1963). (180) P.L.R.
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34 - Where the Arbitrator has assessed the material and evidence placed before him in detail, the court while considering the objections under Section 34 of the said Act does not sit as a court of appeal and is not expected to re-appreciate the entire evidence and reassess the case of the parties - The jurisdiction under section 34 is not appellate in nature and an award passed by an Arbitrator cannot be set aside on the ground that it was erroneous - It is not open to the court to interfere with the award merely because in the opinion of the court, another view is possible. (178) P.L.R. (Del.)
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34(2)(a)(iii)(i) - Main ground that they were not given proper notice of the appointment of the Arbitrator and that of the arbitral proceedings - Thus, they were unable to present their case and the Award is, therefore, liable to be set aside - It appears from the postal receipt as well as A.D. Cards that the Arbitral Tribunal had sent the notices of intention to proceed <D>exparte - Duly dispatched and the same were received by the petitioner - Prior to that the notices for arbitration proceedings were sent - Therefore, the petitioners apparently are making the incorrect statements and taking false ground - Only contention through counsel was that as the information of the arbitration proceedings was not given, therefore, the Award be set aside, though it was not denied by him that the petitioners were sanctioned the loan by respondent who have not cleared the dues - It is admitted liability. (183) P.L.R. (Del.)
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34(3) - Application for setting aside award - Section 5 of the Limitation Act, 1963 does not apply to the application under Section 34 of the Act - However for computing the period of limitation under Section 34(3) of the Act, the relevant date is the date of acquiring knowledge of the award. (174) P.L.R.
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34(3) - Award - Copy of the same was sent to the parties to the lis by registered post - No explanation has come forth, much less any certificate from the post office that the copy of the award sent by registered post was not received by the office of Punjab State Warehousing Corporation - It is settled law that the provisions of Section 5 of the Limitation Act do not apply to the objections - Sub-section (3) of Section 34 of 1996 Act prescribes the specific period of limitation to file the objections within 90+30 days (grace period)=120 days supported by an affidavit. (183) P.L.R.
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34(4), 11(3) - On the premise that the provisions of sub-section 4 of Section 34 have not been complied with - Since, the Award is not sustainable, the parties would have resort to the provisions of Section 11(6) seeking the appointment of the Arbitrator - In order to enact wastage of time and incurring extra cost - Arbitrator appointed. (183) P.L.R.
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34(i) - General Clauses Act, 1897 (10 of 1897) S. 27 - Evidence Act, 1872 (1 of 1872) S. 114(f) - Award was not sent along with any acknowledgement due card and the envelope containing the award dispatched was not returned - Presumption invoked would have no place in the absence of any proof of delivery of the signed copy of the award on respondent itself and which does not exist. (175) P.L.R. (Del.)
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34, 31(3) - Do not deem it appropriate to interfere in the present appeal as the objection do not fall within the realm of provision of Section 34 of the Act - High Court should not act as a Court of appeal and reappraise the material/evidence and embarked on a path by substitution in its own view. (182) P.L.R.
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34, 33 - Appellant applied under Section 33 of the Act for correction of the computation error - The Arbitrators themselves admitted the rate because in the order passed in the application, it was mentioned that they had suggested to both the parties to agree upon a consent order - It was also mentioned that the Arbitral Tribunal was not informed of the rate and the amount paid in excess - It is, therefore, not understandable as to why the Arbitrators dismissed the applications - In any case, the appellant had come forward for correction of computing error - Since valid application of the appellant was dismissed on 26.10.2009 after filing it on 23.9.2009 that period would be excluded - The objection petition, therefore, was filed within limitation. (179) P.L.R.
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34, 37 - Why a petition under Section 34 and 37 of the Act was filed by the appellant, remains beyond comprehension - Unless he accepted the verdict of the Arbitrator to be an award, no objection petition could be filed under Section 34 of the Act and if it was an award, objections if any, against the said award can be and should have been filed and section 37 of the Act did not come into play - Simply by writing that the petition was filed under Sections 34 and 37 of the Act, it would not be taken that an appeal was being filed relating to Section 16 of the Act as propounded by the appellant at the time of arguments now. (178) P.L.R.
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 34, 43 - Objections - Limitation - Section 34 of the Arbitration Act only excludes application of Section 5 of the Limitation Act for proceedings under the Arbitration Act, as specific period of limitation and the period for which the delay can be condoned, has been provided - There is no other provision under the Arbitration Act, which provides for exclusion of any other provisions of the Limitation Act to the proceedings under the Arbitration Act rather Section 43 of the Arbitration Act makes the provisions of the Limitation Act applicable - Limitation Act, 1964 (36 of 1963) S. 5, 17. (179) P.L.R.
Arbitration and Conciliation Act, 1996 (26 of 1996) S. 36 - Award - Execution of - Award was passed at Mumbai - However the respondents against whom the award has to be executed are the residents of District Karnal - Keeping in view provisions of Section 36 of the Act that an award can be enforced like a decree - Application can be filed in a court within whose jurisdiction the judgment debtor resides/holds property. (174) P.L.R.
Arbitration and Conciliation Act, 1996 (26 of 1996) Section 34 – Now question would arise as to whether in the absence of any objection under Section 34 of the Arbitration Act, the Court suo moto could hold that the arbitrator had acted beyond the terms of the reference and that there was no arbitration agreement on the basis of which award has been passed? – District Judge, Gurgaon exceeded its jurisdiction in going behind the decree - In this case no objections were filed by the respondent under Section 34 of the Arbitration Act within the period of limitation or even thereafter or even during the proceedings under Section 36 before the learned District Judge, rather, he was proceeded against ex-parte - Therefore, in the absence of any objection, the learned District Judge was supposed to faithfully execute the award, which has the status of a decree – Merely on the ground of doubt, the execution of award could not be refused - Said award has become final between the parties. (2018-2) PUNJAB LAW REPORTER
Arbitration and Conciliation Act, 1996 (26 of 1996) Section 34 – There can be no extension of limitation for filing objections to an arbitral award beyond the specific prescription of Section 34(3) as well as the proviso thereto. Also Section 5 of the Limitation Act has no applicability and there can be no condonation of delay in filing objections thereunder – The provisions of Section 5 of the Limitation Act, 1963 would not be applicable because the applicability of Section 5 of the Limitation Act stands excluded in view of the provisions of Section 29(2) of the Limitation Act – Extended period cannot be treated as part of the period of limitation inasmuch as the discretion is vested on the court whether to accept the explanation for the delay by showing sufficient cause for the same – Limitation Act, 1963 (36 of 1963) Section 5, 29(2). (2018-2) PUNJAB LAW REPORTER DELHI
Arbitration and Conciliation Act, 1996 (26 of 1996) Section 34(3) - Whether there should be condonation of delay as permissible under the Act of 30 days after the period of three months - Objections under Section 34 of the Act as time-barred inasmuch as by the impugned judgment objections filed by the appellant under Section 34 of the Act have been dismissed as time barred by not considering condonation of delay upto 30 days beyond three months - Order set aside. Held, that once the law is harsh that there cannot be condonation of delay after three months plus 30 days then if there is any delay beyond three months upto 30 days, Courts should be liberal in allowing condonation of delay upto 30 days, otherwise vested rights and valuable rights of an objector to file objections to the Award would be rejected only on the ground of limitation, though every endeavour should be made to decide the objections on merits. (2018-1 ) PUNJAB LAW REPORTER DELHI
Arbitration and Conciliation Act, 1996 Section 34 - Jurisdiction – Agreement provided - “The parties hereto agree to submit to the exclusive jurisdiction of the courts in Mumbai in Maharashtra (India).” - Once courts in Mumbai have exclusive jurisdiction it is clear that it is the Mumbai courts and the Mumbai courts alone, before which a Section 34 application can be filed - The arbitration that was conducted at Delhi was only at a convenient venue earmarked by the National Stock Exchange, will not create jurisdiction.(2018)2 SCeJ 1404
Arbitration and Conciliation Act, 1996 Section 34 - Framing of issues and leading of oral evidence - Speedy resolution of arbitral disputes has been the reason for enacting the 1996 Act, and continues to be the reason for adding amendments to the said Act to strengthen the aforesaid object - Quite obviously, if issues are to be framed and oral evidence taken in a summary proceeding under Section 34, this object will be defeated - It is also on the cards that if Bill No.100 of 2018 is passed, then evidence at the stage of a Section 34 application will be dispensed with altogether – We clarify the legal position by stating that an application for setting aside an arbitral award will not ordinarily require anything beyond the record that was before the Arbitrator - However, if there are matters not contained in such record, and are relevant to the determination of issues arising under Section 34(2)(a), they may be brought to the notice of the Court by way of affidavits filed by both parties - Cross-examination of persons swearing to the affidavits should not be allowed unless absolutely necessary, as the truth will emerge on a reading of the affidavits filed by both parties. (2018)2 SCeJ 1404