Delhi High Court: In a petition filed under Section 34 of the Arbitration and Conciliation Act, 1996, (‘A&C Act') challenging an order passed wherein the arbitrator rejected an application filed by the petitioner for amendment of the statement of claim, Prateek Jalan, J. dismissed the petition as non-maintainable and held that Section 23(3) of the Arbitration & Conciliation Act, 1996 vests discretion in the Arbitrator to reject an amendment application made at a belated stage and such an order cannot be challenged under Section 34 of Arbitration and Conciliation Act, 1996.
The Court remarked that “Factors which cloth the orders of the Arbitral Tribunal with the characteristic of finality, render them susceptible to challenge as interim awards under Section 34 of Arbitration & Conciliation Act, 1996”
The Court essentially ruled that characteristics of an interlocutory order passed by an Arbitral Tribunal, having trappings of finality are the key to determine maintainability of petitions under Section 34 of Arbitration and Conciliation Act, 1996.
A suit was originally filed by the petitioner against three defendants, of whom the respondent was the principal defendant, and the other two defendants were arrayed as proforma defendants. By an order dated 07.11.2016, the suit, along with five other suits pending before the Court, were referred to arbitration before a former Judge of this Court.
In the arbitral proceedings between the parties, six proceedings have been taken up together by the arbitrator. The Petitioner in one of the six cases had claimed a decree of declaration for the Sale Deed dated 28.07.2010 registered on 29.07.2010 obtained by the Respondent from the Petitioner to be declared as void and cancelled. Vide amendment application dated 21.07.2017, the Petitioner sought amendment of the statement of claim. The Petitioner pressed for amendment by way of additional prayers for a decree directing the Respondent to transfer title of the property under dispute to the Petitioner.
The Respondent resisted the amendment, and the application for amendment was subsequently dismissed vide impugned order dated 04.11.2019 by the arbitrator under Section 23(3) of the A&C Act. The Arbitrator rejected the application as the same was filed belatedly in 2017 and further not pressed upon till 04.11.2019. The arbitrator, however, was sure to record in the impugned order that “expression of any view herein will not be treated as expression on the merit of the case.”
The Counsel for the respondent raised a preliminary objection with respect to the maintainability of the petition under Section 34 of Arbitration and Conciliation Act, 1996, directed against an order of the arbitrator, rejecting an application of amendment. The Respondent submitted that an interim interlocutory order does not have the trappings of an interim award as prescribed under Section 2(1)(c) of Arbitration and Conciliation Act, 1996, and thus, cannot be entertained by the Court.
Placing reliance on Container Corporation of India Ltd. v. Texmaco Limited, 2009 SCC OnLine Del 1594, the Court observed that in the facts of the present case, the arbitrator has proceeded only on the ground that the amendment was sought belatedly and did not adjudicate on the merits of the case. Therefore, the impugned order dated 04.11.2019 under challenge was not an interim award.
Thus, the Court held that the impugned order in the present case does not constitute an interim award, susceptible to challenge under Section 34 of the Act.
[Punita Bhardwaj v. Rashmi Juneja, 2022 SCC OnLine Del 2691, decided on 31-08-2022]
Advocates who appeared in this case :
Mr. A.K. Singla, Senior Advocate, Mr. Rahul Shukla and Mr. Akshit Sachdeva, Advocates, Counsel for the Petitioner;
Mr. Siddharth Batra, AOR, Ms. Shivani Chawla, Mr. Siddharth Satija and Mr. Akash Sachan, Advocates, Counsel for the Respondent.
*Arunima Bose, Editorial Assistant has put this report together.
