Case BriefsHigh Courts

Bombay High Court: S.V. Gupte, J., set aside an arbitral award for respondent’s failure to show proper notice of appointment of the arbitrator to the petitioner.

The petitioner challenged the subject arbitration award passed by a sole arbitrator under Section 34 of the Arbitration and Conciliation Act, 1996 on the ground, inter alia, that he did not receive a notice of arbitrator’s appointment as well as arbitration proceedings.

Divesh Chamboowala instructed by Pradip R. Kadam appeared for the petitioner. While Akshay Chikhale instructed by Priya Crasto represented the respondent.

The respondent submitted that the notice was duly served upon the petitioner. They produced an acknowledgment slip purportedly signed on behalf of the petitioner. Per contra, the petitioner disputed that the signatures did not belong to him and nor to any of his family members.

Having considered the impugned award, the High Court observed, “Once the petitioner disputes receipt of notice and the record prima facie bears out the petitioner’s case, the onus to show that there was proper notice of appointment of arbitrator as well as of arbitration proceedings is on the respondents. Leave aside discharging that onus, the respondents have not even filed a reply to the arbitration petition herein.”

Repelling respondent’s further contention that the notices issued were returned “unclaimed” which amounted to good service, the court stated, “In the present case, there is nothing to suggest that there was any postal intimation sent by the post office to the petitioner that the packet of service was retained by it, calling upon the petitioner to collect the same. In the premises, it is not possible to accept the respondent’s case that a mere return of the packet with the remark “unclaimed” amounts to good service.”

In such view of the matter, the Court allowed the petition and set aside the impugned award.[Nuruddin Latif Naik v. Mahindra and Mahindra Financial Services Ltd., 2019 SCC OnLine Bom 526, dated 20-03-2019]

Case BriefsHigh Courts

Patna High Court: A Single judge bench comprising of Birendra Kumar, J. while hearing a civil writ petition against an Arbitrator’s order held that since the statutory remedy provided under Arbitration and Conciliation Act, 1996 had not been exhausted, the High Court could not exercise its writ jurisdiction.

The respondent had acquired petitioner’s land for construction of ‘Dedicated Freight Corridor Project’ under the Railways Act, 1989. The dispute involved was regarding the nature of acquired land – while the petitioner claimed it to a residential-cum-commercial land, the respondent treated it as agricultural land while deciding the payable compensation. Petitioner challenged the said order of the respondent authority before an Arbitrator under Section 20-F (6) of the Railways Act; but his claim was rejected by the Arbitral Tribunal. Aggrieved by the said order, petitioner preferred the present petition before the Hon’ble High Court praying for a direction to the respondent authority to treat the acquired land as a commercial land and to quash the Arbitrator’s order.

The High Court noted that Section 20-F (7) of the Railways Act provides that the provisions of the Arbitration Act would be applicable in respect of all arbitration proceedings instituted under the Railways Act. Further, Section 34 of Arbitration Act provides a detailed provision to challenge an Arbitrator’s award before Court. In view of a statutory remedy being available to the petitioner, the Court refused to exercise its writ jurisdiction. Further, it was also observed that the question as to whether the nature of acquired land was commercial or agricultural, would be a question of fact requiring an appreciation of evidence; and the said exercise lay outside the jurisdiction of a writ court.

Therefore, the petition was disposed of granting liberty to the petitioner to approach the appropriate forum under Section 34 of Arbitration Act. [Dilip Kumar v Union of India,2018 SCC OnLine Pat 1906, decided on 11-09-2018]

Case BriefsHigh Courts

Delhi High Court: A Single Judge Bench comprising of Navin Chawla, J., declined to exercise jurisdiction in entertaining a petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 holding the seat Arbitration to be in London.

The petition was filed under Section 34 in a matter arising out of a Time Charter Party Agreement entered into between the parties. the respondent challenged the jurisdiction of the High Court contending that Part I of the Act was not applicable as the seat of arbitration in the present petition was at London. It was an undisputed fact that according to the Arbitration Clause contained in the Agreement, the seat of arbitration was to be at London though the hearings were being conducted in New Delhi. It was also undisputed that the petitioner had itself challenged the award impugned before the High Court of Justice, Business and Property Courts of England and Wales, Commercial Court (QBD) by way of a petition under Section 68 of the (English) Arbitration Act, 1996. In December 2010, the respondent, vide a letter, had sought change of seat of arbitration. Subsequently, vide its letter dated 23 March 2011, the petitioner informed the respondent that the venue of the arbitration could be New Delhi and it still be governed by the (English) Arbitration Act, 1996 and by the procedure as prescribed by the London Maritime Arbitrators Association Rules (LMAA Rules). This was confirmed too by the respondent. Thereafter, pursuant to the passage of the award impugned, the petitioner filed the instant petition which was challenged by the respondent as mentioned hereinabove.

The High Court perused the record and was of the view that a reading of the correspondence exchanged between the parties would clearly show that the parties did not arrive at a consensus for change of seat of arbitration from London to New Delhi. It was observed that the “venue cannot be construed as a seat of arbitration”. Reference was made to Union of India v. Hardy Exploration and Production (India) INC, 2018 SCC OnLine SC 1640 and it was held that not only the Arbitration clause contained in the Time Charter Party Agreement but also the conduct of the parties, gathered from the exchange of correspondence, their conduct before the Arbitral Tribunal as also the conduct subsequent to the passing of the award impugned, would lead to a conclusion that the parties agreed on the seat of arbitration to be at  London. Therefore, the Court held that it lacked jurisdiction under Section 34 of the Act. Resultantly, the petition was dismissed. [Dredging Corporation of India v. Mercator Ltd.,2018 SCC OnLine Del 11930, decided on 10-10-2018]