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2017 Supreme(Bom) 119
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
N.M. Jamdar, J.
Zee Sports Limited (now known as Zee Digital Convergence Ltd.) - Applicant
Vs.
Nimbus Media Pte. Ltd. - Respondent
CHAMBER SUMMONS (LODG.) NO. 114 OF 2017 IN ARBITRATION PETITION NO. 1698 OF 2015
Decided On : 31-01-2017
For the Applicant : Dr. Birendra Saraf a/w. Mr. Rohan Savant, Monisha Bhangale and Warisha Parkar i/b. ALMT Legal.
For the Respondent: Mr. Sanjay Jain a/w. Mr. Hemant Prabhulkar, Ms. Yogesh Bhoge, Ms. Smita Bhosale i/b. Jurisperitus Mumbai.
Important Point—No amendment can be allowed after limitation period as it would prejudice the other party and would be against the Principle of Natural Justice.
Headnote:The Arbitration and Conciliation Act, 1996—Section 11—International Commercial arbitration under Section 2(f)—Arbitral award challenged on the ground that CJI should have appointed arbitrator—Amendment of defence prayed for—Whether new ground could be taken in an Appeal under Section 37 of the Act when it was not so taken in an Application under Section 34—Award being a nullity can be advanced at any stage of the proceedings even at the stage of execution, inspite of the bar of the Section 16—Entirely new ground beyond the period of limitation cannot be taken and what is permitted is an amplification of the grounds already taken—No objection raised in the statement of defence neither during the arbitral proceedings nor in the petition filed under Section 34 within limitation—The amendment sought being a completely new ground after the period of limitation, cannot be permitted to be incorporated.
Result—Application rejected.
By this Chamber Summons, the Petitioner has sought an amendment to the Arbitration Petition to incorporate a ground to challenge the Award dated 3 August 2015 rendered by the learned Arbitrator.
2. On 17 January 2005, parties entered in the Heads of Agreement in respect of incorporating a joint venture company. Thereafter, various further agreements were entered into. Dispute arose between the parties regarding payment. Since the parties did not agree on the appointment of the arbitrator, an Application No. 42 of 2010 was moved by the Respondent under Section 11 of the Arbitration and Conciliation Act, 1996. The Application was taken up for consideration by the learned Judge designate. The learned Judge noted the existence of arbitration clause. A contention was raised by the Respondent – Applicant herein regarding the claim being barred by law of limitation. The learned Judge looked into the correspondence between the parties and prima-facie observed that the claim was within period of limitation and disposed of the application by order dated 24 January 2011 appointing a learned retired Judge of this Court as a sole arbitrator. Thereafter, a statement of claim was filed by the Respondent before the Arbitrator on 20 June 2011. The Applicant filed statement of defence and took up various contentions, limitation being one of the primary contention. The Respondent filed affidavit in rejoinder. The parties thereafter filed sur-rejoinder. The Respondent led evidence of its Director. The Applicant led evidence of its CEO Mr. Goenka and of Mr. Modi. The learned Arbitrator passed an Award dated 3 August 2015 allowing the claim of the Respondent of USD 1 million together with interest of USD 294,372.15 prior to the 20 June 2011 and @ 5% from 20 June 2011 till making of the award and @ 12% p.a. from the date of the award till payment.
3. The Arbitration Petition was filed on 27 October 2015. Perusal of the farad-sheet shows the Arbitration Petition came up on board on 15 February 2016 when it was adjourned at the joint request on various dates such as 28 June 2016, 19 July 2016, 26 July 2016, 2 August 2016, 23 August 2016, 13 September 2016, 15 October 2016, 27 October 2016, 28 December 2016. On 17 January 2017, when the Arbitration Petition came up before me, an oral submission was advanced that the learned Counsel for the Applicant intends to file a Chamber Summons to seek amendment to the Petition to incorporate a ground. Thereafter, the present Chamber Summons is filed and is taken up for consideration.
4. By the amendment, the Applicant has sought to incorporate a ground in the Petition that the impugned award is a nullity. The gist of the amendment is that since the Respondent being an entity incorporated in Singapore, the proceedings were an international commercial arbitration, as defined under Section 2(f) of the Act and therefore, any application under Section 11 of the Act for appointment of arbitrator was required to be made to the learned Chief Justice of India to the authority designated by the learned Chief Justice of India. Since the appointment is made by the learned Judge designated by the learned Chief Justice of this Court, the order appointing the learned Arbitrator was without jurisdiction and consequently the further proceeding and the impugned award is a nullity. The Chamber Summons is admittedly moved beyond the period permissible to challenge the Award.
5. Heard Dr. Birendra Saraf, learned Counsel for the Applicant and Mr. Sanjay Jain, the learned Counsel for the Respondent.
6. Dr. Saraf submitted : a ground has already been taken in the Arbitration Petition that the Award is illegal, contrary to law, against public policy, and therefore, the amendment which is sought is only amplification of this ground. It is not a requirement of law that no new ground can ever be taken beyond the period of limitation described under the Act. This position has been made clear by the Apex Court in the decision of 2010 (4)
