SUPREME COURT OF INDIA
M.R. Shah, B.V. Nagarathna, JJ.
Mutha Constructions – Appellant
Versus
Strategic Brand Solutions (i) Private – Respondent
SLP (Civil) No. 1105 of 2022
Decided On : 04-02-2022
Consent Order - Arbitration Dispute - Arbitration and Conciliation Act, 1996 (Section 34) - [Section 34 of the Arbitration and Conciliation Act, 1996] - The court held that the order dated 30.04.2019 was a consent order by which the parties agreed to set aside the award and remand the matter to the same learned Sole Arbitrator for a fresh reasoned award. The court also emphasized that the intention of the parties, as reflected in the order, was to remand the matter to the same arbitrator, and therefore, the principles of law relied upon by the petitioner were not applicable in this case.
Fact of the Case:
The dispute arose between the parties in an arbitration proceeding before a retired Judge of the Bombay High Court. The petitioner sought to set aside the award and remand the matter to the arbitrator for a fresh reasoned award. The petitioner later sought modification of the order, claiming lack of consent for the matter to be sent to the same arbitrator. The subsequent appeals and review petitions were dismissed, leading to the present Special Leave Petition.
Finding of the Court:
The Division Bench of the High Court rightly dismissed the application seeking restoration of the appeal, as the original order was a consent order and the parties had agreed to remand the matter to the same arbitrator for a fresh reasoned award.
Issues: The main issue revolved around whether the order to set aside the award and remand the matter to the same arbitrator was a consent order, and whether the petitioner's subsequent contentions were valid.
Ratio Decidendi: The court emphasized that the order was indeed a consent order, as confirmed by the learned Single Judge, and that the intention of the parties, as reflected in the order, was to remand the matter to the same arbitrator for a fresh reasoned award. Therefore, the principles of law relied upon by the petitioner were not applicable in this case.
Final Decision: The Special Leave Petition was dismissed, affirming the decision of the Division Bench of the High Court.
ORDER
1. Feeling aggrieved and dissatisfied with the impugned order dated 12.01.2022 passed by the High Court of Judicature at Bombay in Interim Application No.2146 of 2019 in Commercial Appeal No.466 of 2019 by which the Division Bench of the High Court has dismissed the said I.A. for restoration of the appeal, the original applicant before the High Court has preferred the present Special Leave Petition.
2. The dispute arose between the parties. Both the parties were in arbitration before the learned Sole Arbitrator, a retired Judge of the Bombay High Court. The learned Arbitrator passed an award dated 17.01.2018. Being aggrieved by the award, the petitioner preferred the Commercial Arbitration Petition No.511 of 2018 under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act'). By Order dated 30.04.2019, the learned Single Judge by consent set aside the award and remanded the matter to the learned Sole Arbitrator to pass a fresh reasoned award. The petition under Section 34 of the Act therefore was disposed of accordingly. That thereafter the petitioner moved an application before the learned Single Judge seeking modification of the order dated 30.04.2019 submitting that the consent had not been accorded for the matter being sent to the same learned Sole Arbitrator. According to the learned counsel for the petitioner the said request was rejected by the learned Single Judge. However, as noted by the High Court no order to this effect was found in the court record. That thereafter being aggrieved by the order dated 30.04.2019, on the limited aspect of consent to have the matter heard by the same sole arbitrator, the petitioner filed a Commercial Arbitration Appeal No.466 of 2019. The same was heard by the Division Bench on 17.07.2019 and the appeal came to be dismissed as not pressed, reserving liberty to the petitioner to seek review of the order dated 30.04.2019. That thereafter the petitioner filed a review petition being Review Petition No.39 of 2019 before the learned Single Judge. The learned Single Judge by order dated 22.11.2019 rejected the review petition by observing that the order dated 30.04.2019 was passed by consent. Being aggrieved by the rejection of the review petition, the petitioner preferred the present I.A. No.2146 of 2019 in Commercial Appeal No.466 of 2019 seeking restoration of the said appeal to file. Nobody appeared on behalf of the respondent and therefore the High Court appointed one Shri Rohaan Cama as Ami-cus Curiae to assist the court in the matter. That by the impugned order the High Court has dismissed the said I.A. and refused to restore the appeal specifically observing that as the order passed by the learned Single Judge dated 30.04.2019 was a consent order, even if the appeal would have been restored no useful purpose would be served and the court is not inclined to allow the appeal on merits if the same be restored.
3. Feeling aggrieved and dissatisfied with the impugned order passed by the Division Bench of the High Court, the original applicant before the High Court has preferred the present Special Leave Petition.
4. Shri Nakul Dewan, learned Senior Advocate appearing on behalf of the petitioner has vehemently submitted that as such the petitioner never consented for remand of the matter to the same learned Sole Arbitrator.
5. It is further submitted by Shri Nakul Dewan, learned Senior Advocate relying upon the decisions of this Court in the case of Kinnari Mullick and Anr. vs. Ghanshyam Das Damani, (2018) 11 SCC 328; Dyna Technologies Private Limited vs. Crompton Greaves Limited, 2019 SCC OnLine SC 1656; I-Pay Clearing Services Private Limited Versus ICICI Bank Limited, 2022 SCC OnLine SC 4 that in exercise of powers under Section 34 of the Act the Appellate Court cannot set aside the award on the ground that no reasons have been assigned and the matter cannot be remanded to the same Arbitrator to give reasons. Relying upon Section 5 of the Act it
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The main legal point established in the judgment is that the court's power under Section 34 of the Arbitration and Conciliation Act, 1996 is limited to setting aside an award and does not extend to m....
Arbitral Award – Hearing the parties once again - Permitting Arbitrator to hear the parties de novo will enlarge the mandate of Section 34(4) - 13 years have passed since the Arbitrator last heard th....
No power has been invested by Parliament in the Court to remand the matter to the Arbitral Tribunal except to adjourn the proceedings for the limited purpose mentioned in sub-section (4) of Section 3....
An arbitrator's appointment by consent recorded in court meets legal requirements, and jurisdictional challenges based on alleged lack of procedure cannot invalidate prior agreements.
A party can seek arbitration anew after an arbitral award is set aside, and a notice under Section 21 is not necessary unless the arbitration clause is freshly invoked.
The court ruled that modification of arbitral awards under Section 34 is impermissible, emphasizing the strict limitations placed by Supreme Court precedent.
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