Calcutta High Court
Ranjiv Kumar & Anr vs Sanjiv Kumar & Anr on 13 February, 2018
Equivalent citations: AIRONLINE 2018 CAL 1621
Author: Ashis Kumar Chakraborty
Bench: Ashis Kumar Chakraborty
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
Original Side
Present : Hon'ble Justice Ashis Kumar Chakraborty
A.P. 679 of 2017
Ranjiv Kumar & Anr.
Vs.
Sanjiv Kumar & Anr.
For the petitioner : Mr. Jishnu Saha, Sr. Adv.
Mr. Ishan Saha, Adv.
Mr. K. Pradhan, Adv.
For the respondent : Mr. Ratnanko Banerjee, Sr. Adv.
Mr. S. Chowdhury, Adv.
Mr. S. Ghosh, Adv.
Judgement on : 13.02.2018
Ashis Kumar Chakraborty, J.
This is an application, at the instance of the respondents in an arbitral proceeding under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act of 1996") for setting aside the order dated July 4, 2017 passed by the learned sole arbitrator rejecting their application to recall the decision to admit the Memorandum of Understanding dated December 14, 2010 in evidence.
At the very outset, Mr. Banerjee appearing for the respondents raised a strong objection with regard to the maintainability of this application under Section 34 of the Act of 1996.
Shorn of details, the facts relevant for the decision in this application are that on December 4, 2010 a Memorandum of Understanding (hereinafter referred to as "the said agreement") was entered into between the present petitioners and the respondent no. 1 herein providing, inter alia, that the petitioners would transfer their undivided one-half share in the property situate at premises no. 3, S.N. Banerjee Road, Kolkata- 700013 (hereinafter referred to as "the said property") to the respondent no. 1 for Rs. 3.50 crores. According to the respondent no. 1, although he discharged his obligations under the said agreement, the petitioners refused to discharge their obligations to perform the said agreement and sought to contend that the said agreement between the parties stood annulled. Clause 10 of the said agreement provided that all disputes and differences between the parties relating to the agreement would be referred to an arbitrator appointed with mutual consent of the parties and the decision of the said arbitrator shall be binding on the parties. Accordingly, the disputes raised by the respondent no. 1 against the present petitioners, with the intervention of this Court under Section 11(6) of the Act of 1996, have been referred to the sole arbitrator, a former Judge of this Court. In the arbitral proceeding before the learned arbitrator the respondents herein were the claimants and the present petitioners were the respondents.
The respondents herein, as the claimants filed their statement of claim before the learned arbitrator, claiming the following reliefs:
"a. Specific performance of the terms and conditions of the Memorandum of Understanding/ Family Settlement Agreement dated December 14, 2010, by the respondents and each one of them;
b. An award for specific delivery of the original Title Deed of Smt. Meera Kumari in respect of her share of the property located at premises no. 3, Surendra Nath Banerjee Road, Kolkata - 700013, a description of the said property is provided in Annexure "A" of this Statement of Claim;
c. Alternatively, an award of Mandatory Injunction upon the respondents to forthwith deliver the original Title Deed of Smt. Meera Kumari in respect of her share of the property located at premises No. 3, Surendra Nath Banerjee Road, Kolkata - 700 013, a description of the said property is provided in Annexure "A" of this Statement of Claim;
d. An award directing the respondents to transfer and convey their respective shares in the premises No. 3, Surendra Nath Banerjee Road, Kolkata - 700 013, though a registered conveyance, upon payment of the balance consideration of INR 2,29,00,000/- (Indian Rupees Two Crores Twenty Nine Lakhs only) by the Claimants to the respondents, on the terms provided in the Memorandum of Understanding dated December 14, 2010;
e. An award of perpetual injunction restraining the respondents from dealing with and/or disposing of and/or encumbering and/or transferring in any manner their joint undivided fifty per cent share in the premises No. 3, Surendra Nath Banerjee Road, Kolkata - 700 013, a description of the said property is provided in Annexure "A" of this Statement of Claim;
f. An award of perpetual injunction restraining the respondents from executing any conveyance in respect of any part or portion of the premises No. 3, Surendra Nath Banerjee Road, Kolkata - 700 013 in favour of any person other than the Claimants, a description of the said property is provided in Annexure "A" of this Statement of Claim;
g. An award directing the respondents to perform their obligations in terms of the Memorandum of Understanding dated December 14, 2010 entered into between the parties;
h. Receiver;
i. Injunction;
j. Attachment;
k. Costs;
l. Such further relief and/or reliefs as this Learned Tribunal deem fit and proper."
The petitioners, as the respondents in the arbitral proceeding filed their statement of defence denying the material allegations made against them in the statement of claim. They did not dispute the existence and execution of the said agreement but alleged that the same stands annulled. After the pleadings were filed, the parties exchanged their statements as to the admission and denial of the documents disclosed by the respective parties. The respondents disclosed the said agreement while the petitioners admitted the existence of the said agreement. The respondent no. 1 in his affidavit of evidence disclosed the original of the said agreement and sought to exhibit the same. In the arbitral sitting held on May 15, 2017 the respondent no. 1 proved his affidavit of evidence along with the documents disclosed therein. Since the documents disclosed by the respondent no. 1, including the said agreement were all admitted by the petitioner, the arbitrator in presence of the learned advocate appearing for the respective parties admitted the same in evidence and marked the said documents, including the agreement as exhibits with serial members.
Thereafter, the cross- examination of the respondent no. 1 by the petitioner's advocate commenced. During the cross-examination of the respondent no. 1 by the petitioners various questions were put to him on the said agreement and in answer to the same he admitted that the said agreement to be not stamped nor registered. The next date of the arbitral sitting was fixed on June 12, 2017 for further cross-examination of the respondent no. 1. On June 12, 2017 the petitioners filed an application before the arbitrator claiming that the said agreement is an agreement for sale but, inasmuch as the same is not stamped for full value as a conveyance as required by the provisions of the Indian Stamp Act as applicable to the State of West Bengal, Section 35 of the Indian Stamp Act, puts an embargo to the adminisiability of the said agreement as evidence in the arbitral proceeding. In the said application, filed before the learned arbitrator the petitioners prayed for the following reliefs:
"(a) An order be made recording that the Memorandum of Understanding dated 14th December, 2010 cannot be admitted as evidence for any purpose or be acted upon, registered or authenticated.
(b) An order be made recording that the claimants will not be permitted to rely on the said Memorandum of Understanding for any purpose whatsoever and that no notice of the same can or will be taken by the learned Arbitral Tribunal;
(c) An order be made directing all references to the said Memorandum of Understanding in the Affidavit Evidence of the respondent no. 1 to be deleted or formally expunging the same before proceeding with the trial;
(d) An ad interim order be made staying all further proceedings in the present reference pending the disposal of the instant application;
(e) Such further or other order orders be made and or direction or directions be given as to this learned Tribunal may seem fit and proper."
The respondents contested the said application filed by the petitioners and filed their objection. In their objection, the present respondents alleged, inter alia, that when the petitioners themselves have admitted the said agreement and the same was exhibited and admitted in evidence, without any objection from the petitioners' side, they are deemed to have waived their right to object to the admissibility of the said agreement in evidence. In the arbitral sitting held on July 4, 2017 the learned arbitrator took up the said application of the present petitioners for hearing. In support of their contention that a document with regard to the transfer of an immovable property which is not adequately stamped as per the provisions of the Indian Stamp Act, 1899 (hereinafter referred to as "the Stamp Act") cannot be admitted in evidence, the petitioners relied on the various decisions of the Supreme Court as well as a decision of this Court. The learned arbitrator, however, found that in the present case the existence of the said agreement has been admitted by all the parties to the arbitral proceeding and they have built up their respective cases by relying upon the said agreement, as well as the terms and conditions enumerated thereof. Therefore, according to the learned arbitrator, the question as to the admission of the said agreement in evidence has become redundant. On these findings, on July 04, 2017 the learned arbitrator rejected the said application filed by the present respondents. It is the said decision of the learned arbitrator which has been challenged by the petitioners in this application under Section 34 of the Act of 1996.
Appearing in support of this application Mr. Jishnu Saha, learned senior advocate submitted that the said agreement is an agreement for sale of an immovable property and as per the provisions of the Stamp Act in its application to the State of West Bengal, the same is required to be stamped for full value as a conveyance. He contended that admittedly the said agreement relating to an immovable property has not been duly stamped and in view of the provisions of Section 35 of the Stamp Act, the learned arbitrator could not have admitted the same in evidence of the arbitral proceeding. It was argued that in the present case, as per Section 35 of the Stamp Act the learned arbitrator ought to have impounded the said agreement on the ground of not being duly stamped. In support of such contention, Mr. Saha relied on the decisions of the Supreme Court in the cases of Avinash Kumar Chauhan vs. Vijay Krishna Mishra reported in (2009) 2 SCC 532, SMS Tea Pvt. Ltd. vs. Chandmari Tea Co. Pvt. Ltd. reported in (2011) 14 SCC 66 and the Division Bench decision of this Court in the case of Darothi Mukherjee (Karmakar) vs. Sri Ajay Kumar Ghosh and Ors. reported in (2017) 1 WBLR (Cal) 688.
With regard to the maintainability of the this application under Section 34 of the Act of 1996 it was argued for the petitioners that in the arbitral proceeding a specific issue was raised by them with regard to the maintainability of the claim for specific performance of the said agreement on the ground that the said agreement cannot be admitted in evidence for not being duly stamped under the Stamp Act and since by the impugned decision the learned arbitrator has decided such issue in the negative, the same amounts to an 'award' within the meaning of the said term, as defined in Section 2(c), read with the provisions contained in Section 31 of the Act of 1996. Therefore, according to the petitioner, this application under Section 34 of the Act of 1996 to challenge the impugned decision of the learned arbitrator is well maintainable. In this connection,, the petitioners relied on a decision of the House of Lords in the case of Cargill Srl Milan vs. P. Kadinopoulos S.A. reported in (1992) 1 Lloyd's Rep 1(HL), as well as the decisions of the Supreme Court in the cases of National Thermal Power Corpn. Ltd. vs. Siemens Atkeingesesellschaft reported in (2007) 4 SCC 451 and Centrotrade Minerals & Metal INC. vs. Hisdustan Copper Limited reported in (2017) 2 SCC 228. They also cited an unreported Division Bench decision of the Delhi High court dated March 02, 2017 passed in FAO(OS)(COMM)47/2017 and C.M. Nos. 7153/2017 (National Highways Authority of India vs. Baharampore Farakka Highways Ltd.) and a Single Bench decision of the same Court in the case of Noida Toll Bridge Co. Ltd. vs. Mitsui Marubeni Corporation reported in 2005(3) Arb. LR 234 (Delhi). Referring to the said unreported Division Bench judgment of the Delhi High Court Mr. Saha submitted that in the said decision the Division Bench of the Delhi High Court has categorically held that a decision of an arbitral tribunal under sub-section (4) of Section 13 of the Act of 1996, rejecting the application of a party under sub-section (2) of Section 13 of the same Act is an award which can be challenged in an application filed under Section 34 before the Court. In the case of Noida Toll Bridge Co. Ltd. (supra), a learned Single Judge of the Delhi High Court held that a decision of an arbitrator rejecting an application for dismissal of the claim in the arbitral proceeding on the ground that the claimant is an unregistered partnership firm is an interim award which can be challenged under Section 34 of the Act of 1996. On the strength of the said decisions it was contended that in the present case the impugned decision of the learned arbitrator rejecting the petitioners' application also amounts to an interim award and the present application under Section 34 of the Act of 1996 is maintainable. In this regard, reliance was placed on behalf of the petitioner on para 9.08 under Chapter 9 of Redfern Hunter on International Arbitration (6th Edition).
On the other hand, opposing this application on behalf of the respondent Mr. Ratnanko Banerjee, learned senior counsel in support of his objection to the maintainability of this application. He first contended that Section 19 of the Act of 1996 provides for the determination of rules of procedure by an arbitrator to conduct an arbitral proceeding and sub-Section (4) of the said Section provides for the power of the arbitrator to determine the admissibility, relevancy, materiality and weight of any evidence. Therefore, the impugned decision of the learned arbitrator with regard to the admissibility of the said agreement as evidence in the arbitral proceeding relates to his power to decide the admissibility of a document and the same cannot be construed to be an adjudication, whether interim or final, of any dispute between the parties referred to the learned arbitrator. The respondent stressed that the impugned decision of the learned arbitrator in exercise of his power under sub-Section (4) of Section 19 of the Act of 1996 with regard to the procedural matters, rejecting the prayer of the petitioner to recall the admission of the said agreement in evidence can by no means be held to be an award and on this ground alone the petitioner's present application under Section 34 of the Act of 1996 is not maintainable. In this regard, reliance was placed on a decision of a learned Single Judge of the Karnatak High Court in the case of M.A. Mohd. Amanulla -vs- B.R. Chandrashek reported in 2005(1)Arb LR 227(Kar). It was next contended that in any event, from the minutes of the arbitral proceeding held on May 15, 2017, it is evident during the examination of chief of the respondent no. 1 the said agreement was marked as an exhibit, without any objection being raised by the present petitioners. Further, the present petitioners cross-examined the respondent no. 1 before the learned arbitrator on May 15, 2017 and put several questions to him on various aspects of the said agreement. Therefore, once the said agreement was admitted in evidence as an exhibit without any objection raised by the present petitioners, in view of Section 36 of the Stamp Act the admission of the said document cannot be questioned by the present petitioners any more. In support of such contention, the respondents relied upon the decision of the Supreme Court in the case of Javer Chand & Ors. vs. Pukhraj Surana reported in AIR 1961 SC 1655. Mr. Banerjee urged that the impugned decision of the learned arbitrator is based on the facts of the case. He submitted that from a reading of the statement of defence filed by the present petitioners in the arbitral proceeding it is evident that they admitted the factum of the said agreement being entered into by the parties and in order to set up the defence against the relief claimed by the respondents in the statement of claim, the present petitioners also relied upon the terms and conditions of the said agreement. When the petitioners themselves relied upon the said agreement in the arbitral proceeding, they cannot point out any error in the finding of the learned arbitrator that when both parties have set up their respective cases by referring to and relying upon the said agreement and the terms and conditions enumerated therein, the question as to the admission of the said agreement in evidence has, therefore, become redundant. It was lastly contended that the said agreement is a family settlement between the parties and it is well settled law that a family settlement does not require registration. In this regard, reference was made to the decisions of the Supreme Court in the cases of Maturi Pullaiah Alias Naga Pullaiah & Anr. vs. Maturi Narasimham & Ors. reported in AIR 1966 SC 1836, Kale & Ors. vs. Deputy Director of Consolidation & Ors. reported in (1976) 3 SCC 119, Roshan Singh & Ors. vs. Zile Singh & Ors. reported in AIR 1988 SC 881, Syndicate Bank vs. Estate Officer & Manager, Apiic Ltd. & Ors. reported in (2007) 8 SCC 361.
Mr. Banerjee further submitted that in the instant case, the learned arbitrator passed the impugned decision in exercise of his power under sub-Section (4) of Section 19 of the Act of 1996 relating to the procedural aspect with regard to the admission of a document in evidence and by no means such decision results in final disposal of the disputes which have been submitted to arbitration and, as such, none of the decisions cited by the petitioners has any application in the present case. With regard to the decision of the House of Lords in the case of Cargill Srl Milan (supra), he submitted that in the said case the appeal arose out of an arbitral proceeding under the provisions of GAFTA Arbitration Rules 125 which are totally different from the provisions of the Act of 1996 governing the arbitral proceeding between the parties in the present case. In the said case in view of Rule 2.8 of GAFTA Rules, when the claimant did not submit its claim within a period of one year from the date of appointment of the arbitrator, the latter published an interim award holding that the claimants claim was deemed to have lapsed. It was submitted since the result of such decision of the arbitrator in the said case resulted in final disposal of the relevant matter which had been submitted to arbitration, such a determination was held by the House of Lords to be an award, carrying with it the consequences that follow from an award. Therefore, according to Mr. Banerjee the decision of the House of Lords in the said case has no application in the present case. He further argued that even the unreported decision of the Division Bench of the Delhi High Court in the case of Baharampore Farakka Highways Ltd. (supra), as well as the Single Bench of the same Court in the case of Noida Toll Bridge Co. Ltd. (supra) can be distinguished on the ground that the impugned decisions of the respective arbitrators in the said cases were not passed under sub-section (4) of Section 19 of the Act of 1996. Without prejudice to the said contention, Mr. Banerjee further submitted that there is no ratio in the decision of the learned Single Judge of the Delhi High Court in the case of Noida Toll Bridge Co. Ltd. (supra) as to why the decision of the arbitrator in the said case, to reject the application of the respondent therein for dismissal of the claims of the claimant on the ground of the latter being an unregistered partnership firm could be held to be an interim award by the arbitrator. It was urged that in the unreported decision in the case of Baharampore Farakka Highways Ltd. (supra) the Division Bench of the Delhi High Court overlooked the clear provisions laid down in sub-Section (5) of Section 13 of the Act of 1996.
In reply, Mr. Saha submitted that it is well settled law that before marking a document as an exhibit and admitting the same in evidence an arbitrator has to apply his mind but, in the instant case the learned arbitrator admitted the said agreement in evidence without considering the undisputed fact that the agreement being not duly stamped is liable to be impounded under Section 35 of the Stamp Act. He contended that the admission of the said insufficiently stamped agreement in evidence by the learned arbitrator goes to the root of the disputes between the parties and the impugned decision of the learned arbitrator is a final adjudication of such issue with regard to admissibility of the said agreement in evidence in the arbitral proceeding. It was argued that even it be accepted for the sake of argument that the impugned decision of the learned arbitrator to reject the petitioners' application raising objection to the admissibility of the said agreement is held to be a decision with regard to a matter of procedure but, as the same is contrary to the provisions of Section 35 of the Stamp Act and finally decides an issue of law, the impugned decision of the learned arbitrator is an interim award under the Act of 1996 and the present application of the petitioners is well maintainable. It was finally contended that when the learned arbitrator did not reject the petitioners' application on the ground of Section 36 of the Stamp Act the respondents cannot defend the impugned decision of the learned arbitrator on such ground.
After the parties concluded their respective submissions and the case was made CAV, on February 07, 2018 the petitioners mentioned the matter for citing a recent decision of the Supreme Court which according to them has a bearing in this case. Therefore, the application was directed to appear under the heading "To Be Mentioned" on February 09, 2018. On February 09, 2018 the petitioners cited an unreported decision of the Supreme Court dated January 23, 2018 passed in M/s. Indian Farmers Fertilizer Co-operative Ltd. vs. M/s. Bhadra Products. It was submitted by the petitioners that in the said case the Supreme Court has held any point of dispute between the parties which has to be answered by the arbitral tribunal, including its decision that the claim of the claimant is not barred by the laws of limitation, can be the subject matter of an interim arbitral award and , therefore, in the present case the impugned decision of the learned arbitrator is also an interim award which rightly challenged in the application under Section 34 of the Act of 1996. However, the learned counsel for the respondents strenuously argued that the said unreported decision of the Supreme Court in of no assistance to the petitioner in this case. He submitted that in the said case before the Supreme Court the respondent in its statement of defence filed in the arbitral proceeding raised objection with regard to the maintainability of the claim of the claimant on the ground the same being barred by the laws of limitation, the parties agreed that the issue of limitation be first decided by the arbitrator and by his decision dated July 23, 2015 the arbitrator decided the said issue in favour of the claimant holding the claim of the latter in the arbitral proceeding is not barred by limitation. Therefore, according to the present respondents the said decision of the arbitrator in the said case finally deciding one of the issues framed by the arbitrator in the arbitral proceeding was held by the Supreme Court to be an interim arbitral award by the arbitrator. The respondents contended that in the instant case the decision of the arbitrator sought to be challenged by the petitioners is with regard to of procedural matter relating to admissibility of the document under sub-Section(4) of Section 17 of the Act of 1996 and the said unreported decision of the Supreme Court in the case of Indian Farmers Co-operative Ltd. (supra) has no application.
I have carefully considered the materials on record, as well as the arguments advanced by the learned counsel appearing for the respective parties. By the impugned decision dated July 04, 2017 the learned arbitrator rejected the application of the petitioner for an order recording that the said agreement dated December 14, 2010 cannot be admitted in evidence and that the claimants, the respondents herein will not be permitted to rely on the said agreement and that all references to the said agreement in the affidavit evidence of the present respondent no. 1 to be deleted. It is to be noted that at the time of appointment of the learned arbitrator by this Court, in spite of the decision of the Supreme Court in the case of SMS Tea Estates Pvt. Ltd. (supra), the petitioners raised no objection on the ground of the said agreement being not duly stamped.
However, the very first point that falls for consideration before this Court whether the impugned decision passed by the learned arbitrator is an 'award' or an 'interim award' under the Act of 1996. The decision on this question is essential for deciding the point of maintainability of this application under Section 34 of the Act of 1996. The power of the arbitral tribunal to pass an interim award is found in sub-Section (6) of Section 36 of the Act of 1996 which provides that the arbitral tribunal may, at any time, during the arbitral proceeding, make an interim award on any matter with respect to which it may make a final award. The term interim award is not separately defined under the Act of 1996 and Section 2( c) of the Act of 1996 provides that 'arbitral award' includes an interim award In the case of Siemens Atkeingesesellschaft (supra) the arbitral tribunal gave a partial award holding, inter alia, that the claim of the claimant was maintainable, while the counter claims of the respondent NTPC (the appellant before the Supreme Court) were not admissible. NTPC challenged the partial award of the arbitral tribunal by filing an appeal under Section 37 of the Act of 1996, before the High Court, alleging the decision of the arbitral tribunal was under Section 16(2) of the Act of 1996. The High Court held the appeal to be not maintainable. While deciding the special leave petition filed by NTPC Justice A.K. Mathur, in paragraphs 11 and 12 of His Lordship's judgment held that when the arbitral tribunal disposed of the counter claim of NTPC by giving a partial award the remedy of the latter against such partial award lies in filing an application under Section 34 of the Act of 1996. Even in paragraph 19 of the supplementary judgement, Justice P.K. Balasubramanyan held that when there is a decision of the arbitral tribunal on the merits of the claim the remedy of the aggrieved party lies in taking recourse to only Section 34 of the Act of 1996. The ratio of the decision of the Supreme Court in the said case is that when there is a final decision of the arbitral Tribunal on the merits of either the claim of the claimant or that of the counter-claim of the respondent such decision amounts to an award under the Act of 1996 which can be assailed by the aggrieved party in an application under Section 34 of the Act of 1996.
In the case of Cargill Srl Milan (supra) the arbitral proceeding between the parties was governed by GAFTA Arbitration Rules 125. As per Rule 2.8 of the said Rules if, neither the claimant nor the respondent submits any documentary evidence or submission to the arbitrator within the period of one year from the date of the arbitrator then the claim to arbitration shall be deemed to have been lapsed on the expiry of the said period of one year. Rule 8.2 of the said Rules provides that if any party is dissatisfied with an arbitration award, a right of appeal shall lie to the Board of Appeal. In the said case the claimant in the arbitral proceeding forwarded the documents in support of their claims to the arbitrator only after expiry the period of one year from the date of his appointment and, as such, the arbitrator published his interim award in which he held that the claimants' claim was deemed to have been lapsed. The claimant assailed the interim award by filing an appeal before the Board of Appeal of GAFTA. The Board of Appeal allowed the claimants' appeal and set aside the interim award of the arbitrator. The respondent in the arbitral proceeding challenged the said decision of the Board of Appeal of GAFTA, before the Court of Appeal contending, inter alia, that the decision of the arbitrator holding the claimants' claim deemed to have been lapsed as per Rule 2.8 of the said Rules is not an award and the appeal filed under Rule 8.2 of the said Rules before the Board of Appeal was not maintainable. Consequently, the decision of the Board of Appeal of GAFTA setting aside the interim award passed by the arbitrator was void. Such contention of the respondent in the arbitral proceeding was not accepted by the Court of Appeal and the appeal was dismissed. The said decision of the Court of appeal was assailed before the House of Lords. It was held by the House of Lords that since the decision of the arbitrator in the said case finally disposed of the relevant matters which have been submitted to arbitration, such a determination is properly the subject matter of an award, carrying with it the usual consequences which flow from an award - in particular it renders the arbitrator functus officio and prevents the unsuccessful claimant from re-arbitrating or litigating the identical claim in future. The House of Lords further held that in the said case the determination of the arbitrator, although did not amount to a decision on the merits of the seller's claim, nevertheless finally disposed of the relevant matters in dispute because it finally determined that the sellers' (claimants') claim was deemed to have been withdrawn and abandoned and so could no longer be pursued against the buyers, the respondents. Such determination is, therefore, properly made a subject matter of an award. In the case of Centrotrade Minerals & Metal (supra) the Supreme Court approved the passages in Comparative International Commercial Arbitration, by Julian D.M. Lew, Loukas A. Mistelis that all decisions of an Arbitral Tribunal are not awards while a decision is generic, an award is more specific decisions that affects the rights of the parties, has important consequences and can be enforced. The Supreme Court quoted with approval the following features of an award by an Arbitral Tribunal stated in Para 24-13 of chapter in comparative International Commercial Arbitration by Julian D.M. Lew, Loukas A Mistelis.
"9. The general principle that we have accepted is supported by two passages in comparative International Commercial Arbitration. In Para 24-3 thereof reference is made to Article 31(1) of the United Nations Commission on International Trade Law (or UNCITRAL) Rules to suggest that while all awards are decisions of the Arbitral Tribunal, all decisions of the Arbitral Tribunal are not awards. Similarly, while a decision is generic, an award is a more specific decision that affects the rights of the parties, has important consequences and can be enforced. The distinction between an award and a decision of an Arbitral Tribunal is summarised in Para 24-13. It is observed that an award:
(i) concludes the dispute as to the specific issue determined in the award so that it has res judicata effect between the parties; if it is a final award, it terminates the tribunals's jurisdiction;
(ii) disposes of parties' respective claims;
(iii) may be confirmed by recognition and enforcement;
(iv) may be challenged in the courts of the place of arbitration."
In paragraph 10 of the same decision while making a distinction between an award of an Arbitral Tribunal and its decisions such as procedural order and directions, quoted with approval the following passage in Para 9.08 of Redfern and Hunter on International Arbitration (6th Edition).
"9.08. the term "award" should generally be reserved for decisions that finally determine the substantive issues with which they deal. This involves distinguishing between awards, which are concerned with substantive issues, and procedural orders and directions, which are concerned with the conduct of the arbitration. Procedural orders and directions help to move the arbitration forward; they deal with such matters as the exchange of written evidence, the production of documents, and the arrangements for the conduct of the hearing. They do not have the status of awards and they may perhaps be called into question after the final award has been made (for example as evidence of 'bias', or 'lack of due process')."
In paragraph 11 of the said judgment, the Supreme Court further quoted with approval para 1353 of part 4, chapter 12 from Fouchard Gaillard Goldman on International Commercial Arbitration as follows:
11. In International Commercial Arbitration the general characteristics of an award are stated. In Para 1353 it is stated as follows:
"1353- An arbitral award can be defined as a final decision by the arbitrators on all or part of the dispute submitted to them, whether it concerns the merits of the dispute, jurisdiction, or a procedural issue leading them to end the proceedings."
This is subsequently elucidated through four aspects of an award, namely:
i) an award is made by the arbitrators;
ii) an award resolves a dispute;
iii) an award is a binding decision; and
iv) an award may be partial.
In the unreported decision of the Supreme Court in the case of Indian Farmers Fertilizer Co- operative Ltd. (supra) the respondent in the arbitral proceeding raised its defence to claims of the claimant, inter alia, on the ground the same being barred by the laws of limitation. The arbitrator framed various issues, including an issue if the claimant's claim was barred by limitation and with consent of the parties took up the said issue for decision as the preliminary issue on the basis of the documentary evidence alone. By his decision dated July 23, 2015, styled as the 'First Partial Award', the arbitrator decided the said issue in favour of the claimant stating that their claims had not become time barred. The respondent in the arbitral proceeding challenged the said decision of the arbitrator before the District Judge, Jagatsinghpur, by filing an application under Section 34 of the Act of 1996. The learned District Judge dismissed the said application stating that the said award could not be said to be an interim award and that, therefore, the Court lacked jurisdiction to proceed further under Section 34 of the Act of 1996. An appeal filed against the said decision of the learned District Judge was dismissed by the High Court at Orissa reiterating the reasoning of the learned District Judge and the same was challenged by the respondent in the arbitral proceeding by filing a special leave petition before the Supreme Court. Considering the provisions of the Act of 1996 the Supreme Court found that although sub-Section (6) of the Act of 1996 confers power on an arbitrator to pass an interim arbitral award on any matter with respect to which it may make a final arbitral award but the Act is silent and does not define what an interim award is. In the said decision the Supreme Court held that the words 'matter'used in sub-Section (6) of Section 31 of the Act of 1996 is wide in nature and subsumes issues at which the parties are in dispute. Considering various earlier decisions of the Court in paragraph 18 of the said judgment the Supreme Court held that an interim award or partial award is a final award on matters covered therein made at an intermediate stage of the arbitral proceeding. In paragraph 19 of the said judgment the Supreme Court further held as follows:
"Tested in the light of the statutory provisions and the case law cited above, it is clear that as the learned Arbitrator has disposed of one matter between the parties i.e. the issue of limitation finally, the award dated 23rd July, 2015 is an "interim award" within the meaning of Section 2(1)(c) of the Act and being subsumed within the expression "arbitral award" could, therefore, have been challenged under Section 34 of the Act."
In the light of the decisions of the Supreme Court and the House of Lords, as well as the observations of the authorities on the law of arbitration as discussed above, it can safely be concluded that a decision of an arbitral tribunal can be held to be an 'interim award', within the meaning of Section 2(1)(c) of the Act of 1996, when the decision finally decides an issue, at an intermediate stage of the arbitral proceeding, relating to the claim or counter-claim of the respective parties to the arbitral proceeding. Therefore, any decision of an arbitral tribunal in exercise of power under sub-Section (4) of Section 17 of the Act of 1996 with regard to the procedural aspects of the arbitral proceeding, including any decision with regard to admissibility of a document in evidence cannot be held to be an "interim award" within the meaning of Section 2(1)(c ) of the same Act. Therfore, I am in respectful agreemnt with the Single Bench decision of the Karnataka High Court in the case of M.A.Mohd Amanulla (supra) that any decision of the arbitrator on a procedural aspect of the arbitratin proceeding, including admissibility of a document is not an 'interim award' under 2(c) of the Act of 1996. It is a fact that in the unreported decision of Baharampore Farakka Highways Ltd. (supra), the Division Bench of the Delhi High Court held that the decision of an arbitral tribunal in an application under Section 13 of the Act of 1996 challenging the appointment of an arbitral tribunal under sub-Section (3) of Section 12 of the same Act is an interim award. However, in the said case the Division Bench of the Delhi High Court overlooked the provisions contained in sub-Section (5) of Section 13 of the Act of 1996 conferring power of the unsuccessful party to challenge the decision of the tribunal in an application under Section 34 for setting aside of the final award by the tribunal. In any event, the decision of an arbitrator under Section 13 of the Act of 1996 does not finalyy decide any issue with regard to either the claim or countrclaim of any of the parties. Therfore ,with utmost humility I am unable to convince myself to follow the said Division Bench decision of th Delhi High Court in the said case of Baharampore Farakka Highways Ltd. (supra) cited by the petitioner. In view of the above decision of the Supreme Court in the case of Indian Farmer's Co-operative Ltd. (supra), the decision of the learned Single Judge of the Delhi High Court in the case of Noida Toll Bridge Co. Ltd.(supra) holding that the decision of the arbitrator negating the plea of a legal infirmity attributed to the claimant's claim is an interim award which can be challenged under Section 34 of the Act of 1996 appears to be correct. However, the said decision has no application in the facts of this case.
For all the foregoing reasons, I find that the respondents are correct in their contention with regard to the maintainability of the present application under Section 34 of the Act of 1996 to challenge the decision of the learned arbitrator dated July 04, 2017. Accordingly, I hold that the present application filed by the petitioner under Section 34 of the Act of 1996 is not maintainable and consequently, the application A.P. No. 679 of 2017 stands rejected.
In view of the above decision I have already arrived at that this application of the petitioners is not maintainable, I refrain from dealing with the contentions raised by the respective parties with regard to the merit of the decision of the arbitrator dated July 04, 2017.
Before parting with the matter it is clarified that if the pendency of this application before this Court has in any manner caused delay in the arbitral proceeding , the same is not attributable to the learned arbitrator and if the occasion so arises, the respondents may seek appropriate relief for extension of time for conclusion of the arbitral proceeding.
There shall, however, be no order as to costs.
Urgent certified copies of this judgment, if applied for, be made available to parties subject to compliance with all requisite formalities.
[Ashis Kumar Chakraborty, J.]