Supreme Court Of India
( S.N. VARIAVA AND H.K. SEMA, JJ.)
M.S. COMMERCIAL AND ANOHERS - Appellants;
Versus
CALI CUT ENGINEERING WORKS LTD. -Respondent.
SLPs (C) No. 7762 of 2004 with No. 7765 of 2004
decided on April 27, 2004
Arbitration and Conciliation Act, 1996, Sections 16(5) and 34 -Existence of Arbitration Clause- The Arbitrator appointed a Hand Writing Expert out of the list supplied by the respondents- The Hand Writing Expert gave two reports- Application of the petitioner to set aside the said reports and appointment of another expert rejected- After the decision by Arbitrator the petitioners filed another application seeking permission to cross-examine the Hand Writing Expert and/or for permission to lead evidence of some other Hand Writing Expert- Application has was rightly dismissed by Arbitrator- The only right that the petitioners now had was to challenge the award under Section 34 of the Act after it was made- Once the Arbitrator gave his decision, it was not open to the petitioners to ask for cross-examination of the expert or at that stage lead evidence of any other expert[Para 5]
ORDER
1.These special leave petitions are against an order dated 19-2-2004.
2.We have heard Mr V.V. Lalit, learned counsel at great length.
3. Briefly stated, the facts are that the respondents claimed arbitration and appointed an arbitrator. The petitioners claimed that there was no arbitration agreement between the parties. The question whether there was an arbitration agreement was raised before the arbitrator by the petitioners. As the answer to this question was dependent on whether or not the petitioners had signed the documents which purportedly contained the arbitration clause, the petitioners applied that the documents be examined by a handwriting expert. The arbitrator allowed this application and called upon both the parties to give names of handwriting experts. The respondents supplied the names of handwriting experts. The petitioners did not supply any name. The arbitrator appointed a handwriting expert out of the list supplied by the respondents. The handwriting expert gave two reports.
4. On 2-7-2003 the petitioners applied that the reports be set aside and
another handwriting expert be appointed. The arbitrator rejected that application. Thereafter, the arbitrator gave his decision on 29-9-2003. The arbitrator held that there was an arbitration agreement. On 12-11-2003 i.e. after this decision was given, the petitioners filed another application seeking permission to cross-examine the handwriting expert and/or for permission to lead evidence of some other handwriting expert. This application has been dismissed by the impugned order.
5. Once the arbitrator had taken a decision that there was an arbitration agreement, then by virtue of sub-section (5) of Section 16 of the Arbitration and Conciliation Act, the arbitrator was bound to continue with the arbitration proceedings and make an arbitral award. The only right that the petitioners now had was to challenge the award under Section 34 of the Act after it is made. Once the arbitrator gave his decision, it was not open to the petitioners to ask for cross-examination of the expert or at that stage lead evidence of any other expert. The stage for doing that had passed. As prior to the decision of the arbitrator they never applied for cross-examination, they could not do so after the decision. This would not even be a ground ofchallenge under Section 34 of the Act. However, we clarify that the above will not mean that whilst challenging the arbitral award, if so challenged, the petitioners cannot challenge the order rejecting their earlier application, if in law they are entitled to do so.
6. Accordingly, the special leave petitions stand dismissed. There will be no order as to costs.
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