Document Fragment View
Fragment Information
Showing contexts for: arbitral proceeding in Ranjiv Kumar & Anr vs Sanjiv Kumar & Anr on 13 February, 2018Matching Fragments
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.
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.
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.