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2003 Supreme(Bom) 1260

IN THE HIGH COURT OF BOMBAY
Karnik D.G., J.
.... Petitioner.
Versus
Pankaj Trading Co. others.... Respondents.
Arbitration Petition No. 279 of 2003, decided on 11-11-2003.
Advocates appeared :
D.H. Mehta i/b. Mahimkar Mahimkar Co., for petitioner.
S.P. Kanuga, for respondents.

Headnote:Administration of justice - an Advocate renders valuable service by discarding the irrelevant and limiting the scope of judicial enquiry only to the relevant so that valuable time of the Courts and Tribunals is not wasted - it is a general misconception that advocates delay the proceedings - Courts and Tribunals are duty bound to act fairly and to this end, request of a party to be represented by a legal practitioner should be granted, if not prohibited by law. [Faze three Exports Ltd. v. Pankaj Trading Company, 2004 (1) Mh LJ 196: 2004 (2) Bom LR 442: 2004 (1) All MR 522 (Bom)]

       Arbitration and Conciliation Act, 1996 - Sections 24 and 31(8) - arbitration proceedings being at least quasi-judicial, if not judicial, in nature; Section 24 giving to the parties a right of being heard; item (ii) of explanation to section 31(8) including legal fees in costs; and the Act nowhere specifically barring representation by legal practitioner - in the circumstances, denying such request amounts to denying fair opportunity of hearing - parties are entitled to representation by a lawyer and denial thereof is without jurisdiction.

       Arbitration and Conciliation Act, 1996 - Section 34 - Arbitral Tribunal comprised by three arbitrators - all of them must act together - one of them remaining absent throughout - award of such tribunal cannot be sustained.

JUDGMENT - KARNIK D.G., J.:---Admit. Mr. S.P. Kanuga appears for respondent No. 1 and waives service respondent Nos. 2, 3 and 4 are arbitrators and are formal parties. Notice to them is dispensed with. By consent, taken up for final hearing.

2. In this petition under section 34 of the Arbitration Act, the petitioner takes exception to the Award dated 14th August, 2002 passed against the petitioners.

3. Disputes having arisen between the parties. They were referred to arbitration by an Arbitral Tribunal of three arbitrators appointed by Hindusthan Chamber of Commerce. The first Award passed on 24th January, 2002 challenged before this Court by the petitioner by filing Arbitration Petition No. 236 of 2002 on several grounds, including that there was no arbitration agreement between the parties. By an order dated 1st August, 2002, this Court allowed the petitioner's application and set aside the Award and remitted the proceedings back to the Arbitral Tribunal for passing fresh orders after hearing the parties. All rights and contentions of the parties save and except for finding that there existed an arbitration agreement between the parties were kept open. The Court further directed the parties to appear before the arbitrators on 12th August, 2002 at 3 p.m.

4. In accordance with the directions passed by the Court allowing the arbitration petition and remitting the matter back to the Arbitral Tribunal, both the parties appeared before the Arbitral Tribunal on 12th August, 2002 at 3 p.m. and the matter was adjourned to 14th August, 2002. The petitioner again appeared before the Arbitral Tribunal on 14th August, 2002 and inter alia filed three application namely :

(i) for permission to be represented by an Advocate;

(ii) an application requiring the arbitrators to disclose their interest, if any, under section 12(iii) of the Arbitration and Conciliation Act, 1966 (for short the Act); and

(iii) that the proceedings be conducted in English.

5. It appears that the arbitrators did not pass any order on any application immediately but, with the hearing and dealt with all the applications in the Award itself. The Arbitral Tribunal rejected the request to conduct the proceedings in English. They also rejected the petitioners request to be represented by an Advocate and passed an Award on the same day i.e. 14th August, 2002.

6. Learned Advocate for the petitioner, apart from challenging the Award on merits, canvassed two other grounds before me, namely :

(i) It was an error on the part of the arbitrators not to allow the petitioners to be represented by an Advocate. In the absence of proper legal representative, there was no proper hearing. The principles of natural justice were not followed and therefore the Award is bad in law.

(ii) In the arbitration meeting on 14th August, 2002, all the three arbitrators were not present. One of the arbitrators Mr. Sunderlal Bagdi was not present at all. Thus, the so called hearing given by the arbitrators was not given by the whole body of arbitrators. There were no deliberations between all the arbitrators as can be seen from the fact that the Award has been published on the same day. Though apparently it bears the signature of all the three arbitrators, it is in fact not an Award by all the arbitrators and the third arbitrators has merely put his signature without having the benefit of hearing the parties or even without being a party to a deliberations.

7. In paragraph 3 of the Award, the learned Arbitrators have dealt with the application of the petitioner for permission to engage an Advocate in the following words :

"The third application of the respondents for permission to engage the services of an Advocate to conduct the matter. The present case is entrusted to a forum of Chamber so that disputes between the businessmen could be finished without any delay. If we allow Advocates in the proceedings in that event case will be delayed and protracted. The commercial dispute between the businessmen are decided

























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