IN THE HIGH COURT OF JUDICATURE AT BOMBAY
A.S. OKA, A.K. MENON, JJ.
Mohammedhussain Abdullabhai Zulfikar Mohammedhusain Kagalwala & Others – Appellant
Versus
Shabbirbhai Abdullabhai Raziabai & Others – Respondent
Appeal Nos. 727-730 of 2004, 769 of 2004, 788-790 of 2004, 492-495 of 2015 in Arbitration Petition Nos. 333 of 2002, 354 of 2002, 332 of 2002, 353 of 2002
Decided On : 13-10-2017
Arbitration - Settlement - Arbitration and Conciliation Act, 1996 (sections 30, 31, 32) - The court held that the Arbitrator has the power to decide whether there is a settlement of dispute and can record the settlement in the form of an arbitral award even if not all parties make a formal request. The judgment set aside the impugned award and dismissed the Arbitration Petitions.
Fact of the Case:
The appeals challenged the judgment and order dated 1st September 2004 passed by the learned single Judge in Arbitration Petition No.332/2002. The dispute arose from the rights of the properties of deceased Abdullabhai, which were referred to the Sole Arbitrator. The Arbitrator made consent awards and separate awards on merits, leading to multiple appeals.
Finding of the Court:
The learned single Judge decided that the Arbitrator had no jurisdiction to decide whether there was a settlement between the parties and set aside the consent awards. However, the awards made on merits were not disturbed.
Issues: The main issue was whether the Arbitrator had the jurisdiction to decide the question of settlement between the parties and whether a formal request for passing the award in writing had to be made by all parties to the arbitral proceedings.
Ratio Decidendi: The court held that the Arbitrator has the power to decide whether there is a settlement of dispute and can record the settlement in the form of an arbitral award even if not all parties make a formal request. The view taken by the learned single Judge was deemed erroneous.
Final Decision: The impugned judgment and order dated 1st September 2004 was set aside, and the Arbitration Petitions were dismissed. The appeals were allowed, and there was no order as to costs. The execution of the awards (except the awards made on merits) was stayed for a period of eight weeks from the date of the judgment.
A.S. OKA, J.
1. These appeals can be conveniently disposed of by a common judgment and order. With a view to appreciate the submissions made across the bar, it will be necessary to make a brief reference to the facts of each case.
2. Appeal No.769/2004 takes an exception to the judgment and order dated 1st September 2004 passed by the learned single Judge in Arbitration Petition No.332/2002. By the said judgment and order dated 1st September 2004, the learned single Judge decided four Arbitration Petitions (Arbitration Petition Nos.353/2002; 332/2002; 354/2002; and 333/2002). The said Arbitration Petitions under Section 34 of the Arbitration and Conciliation Act, 1996 (for short “the Arbitration Act”) were filed for challenging the consent awards made by the learned Arbitrator.
3. In Appeal No.769/2004, the appellants are the legal representatives of late Akhtarbhai Abdullabhai. The said Akhtarbhai, the original the first, second and fifth respondents (Shabbirbhai,Mohammed Hussain and Ashfaqbhai), the third respondent (Taherbhai) the fourth respondent(Moizbhai) and eighth and ninth respondents are brothers and sisters respectively. Their father was Abdullabhai. It appears that the dispute in respect of rights of the properties of deceased Abdullabhai were referred to the Sole Arbitrator. In the arbitration proceeding, the parties filed consent terms in respect of the reference relating to the properties of a firm M/s Abdullabhai Fiddali and Company. A consent award was made accordingly on 26th April 2001. The parties also arrived at a settlement of the two references relating to a firm Abdullabhai Fiddali and Sons on 5th April 2002. Consent awards were made and after filing of the consent terms and consent awards as aforesaid, two references in relation to the joint family properties and five rooms in Fiddali Building remained. There were negotiations between the parties as regards these disputes. It appears that the consent terms were drafted but some of the parties were not agreeable to sign the consent terms. Thereafter, the Arbitrator proceeded to decide the question whether there was a settlement reached between the parties and recorded a finding that in fact, there was a settlement between the parties and proceeded to pass an award in terms of settlement in respect of all remaining properties except five properties in respect which he passed a separate award on merits. The Award was made on 13th June 2017. We may also note here that an application was made by one of the parties (Akhtarbhai) for correcting the award in accordance with section 33 of the Arbitration Act and, accordingly, corrections were carried out. Appeal No.769/2004 arises out of Arbitration Petition No.332/2002 filed by Shabbirbhai wherein challenge was to the award dated 13th June 2002. By the impugned order dated 1st September 2004, the learned single Judge decided the said Arbitration Petition No.332/2002 along with Arbitration Petition Nos.353/2002; 354/2002; and 333/2002. By the impugned judgment and order, the learned single Judge proceeded to set aside the consent awards. However, the awards made on merits were not disturbed.
4. Appeal No.769/2004 has been preferred by respondent Nos.5a to 5d in Arbitration Petition No.332/2002. Appeal No.492/2015 is again directed against the same order of the learned single Judge dated 1st September 2004 in Arbitration Petition No.333/2002. The appellant in this appeal is not the party to the Arbitration Petition No.333/2002. Appeal No.493/2005 is directed against the same order in Arbitration Petition No.332/2002. The appellant is not a party to the said arbitration petition. Appeal No.494/2015 is preferred for challenging the same judgment and order dated 1st September 2004 in Arbitration Petition No.353/2002. Appeal No.495/2015 is preferred against the same order in Arbitration Petition No.332/2002. Appeal No.496/2015 is preferred by one Zulkarnain Kagalwala being aggrieved by the same judgment and ord
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