IMPORTANT POINT
Setting aside of Arbitral award – Section 34 application will not ordinarily require anything beyond record that was before arbitration and cross-examination of persons swearing in to affidavits should not be allowed unless absolutely necessary.

JUDGMENT :

M.R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 1.9.2021 passed by the High Court of Karnataka at Bengaluru in Writ Petition No. 50799/2019, by which the High Court has allowed the said writ petition and while quashing and setting aside the order passed by the learned Additional City Civil and Sessions Judge, Bengaluru, has permitted the respondents-original writ petitioners to adduce evidence in an application under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act’) the original respondent before the High Court and in whose favour the award has been passed by the learned Arbitral Tribunal has preferred the present appeal.

2. The facts leading to the present appeal in a nutshell are as under:

That against the award passed by the learned arbitrators dated 12.03.1998, an application under Section 34 of the Act being Arbitration Case No. 38/1998 has been filed by the respondents. That the respondents filed an interim application being I.A. No. 4 in section 34 application to adduce additional evidence. At this stage, it is required to be noted that as such the award passed by the learned arbitrators was an ex-parte award and no evidence was led by the respondents herein, who subsequently assailed the award by way of section 34 application. The appellant herein filed objections to the said interim application seeking permission to adduce evidence on the ground that the same was not maintainable in accordance with the provisions of the Arbitration Act, 1996. The grounds on which the respondents submitted an application to permit them to adduce evidence shall be dealt with and considered hereinafter.

2.1 The Court dealing with interim application being I.A. No. 4 in section 34 application rejected the said interim application and refused to permit the respondents to adduce evidence by observing that if such a permission is granted, it would defeat the object and purpose of early disposal of arbitration proceedings and it would delay further hearing of section 34 application. For that purpose, reliance was placed on the provisions of Section 34(2)(a) of the Act, as amended in the year 2019, by which expression “furnish proof” in section 34(2)(a) came to be substituted with the expression “establish on the basis of record of arbitral tribunal.” Therefore, the Court dealing with section 34 application opined that the said amendment intended to limit the scope of judicial review under Section 34 of the Act only in exceptional circumstances enumerated under Section 34(2)(a) of the Act on the basis of the record available and even if the grounds urged relate to section 34(2)(b) of the Act, the applicants cannot have a right to produce additional evidence. The order passed by the Court dealing with Section 34 application which rejected the interim application being I.A. No. 4 preferred by the respondents permitting them to adduce additional evidence/evidence was the subject matter of writ petition before the High Court.

2.2 Before the High Court, it was conceded on behalf of the appellant herein-original respondent before the High Court, so recorded in paragraph 8 of the impugned judgment, that the provisions of Section 34 (2)(a) of the Act, as it stood prior to Act 33 of 2019 would apply, namely, pre-amendment to section 34(2)(a) of the Act shall be applicable. That thereafter, by the impugned judgment and order, after following the decision of this Court in the case of Fiza Developers and Inter-Trade Private Limited vs. AMCI (India) Private Limited and Another, (2009) 17 SCC 796, the High Court has allowed the said writ petition and set aside the order passed by the court below and has allowed the application preferred by the respondents herein permitting them to adduce evidence in the proceedings under section 34 of the Act. The impugned judgment and order passed by the High Court permitting him respondents to adduce evidence/additional evid