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2019 Supreme(Bom) 1453
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
R.D. Dhanuka, J.
Konkan Irrigation Development Corporation, Thane – Appellant
Versus
M/S F.A. Enterprises, Mumbai – Respondent
Notice of Motion (L) No. 2007 of 2019; Commercial Arbitration Petition (L) No. 681 of 2019; Notice of Motion No. 2192 of 2019; Commercial Arbitration Petition No. 921 of 2019
Decided On : 22-10-2019
Gopal Krishna Shivaram Hegde, Adv., Pinky Bhansali, Adv., S.G. Aney, Adv., Shweta Sangtani, Adv., Yash Momaya, Adv., Dinesh B Khaire, Adv., Geeta Shastri, Adv., Anil Anturkar, Adv., Vikram Nankani, Adv., P. Narayan, Adv., Prashant Patil, Adv., Kapil Chiddanand, Adv., Shubham Misar, Adv., Yatin Malvankar, Adv., Pranav Patil, Adv., Siddhi Sabne, Adv., Niharika Shewde, Adv., Shilpa Chidanand, Adv., Sachin Shintre, Adv.
A party is not entitled to produce additional documents at the stage of hearing of arbitration petitions under Section 34(2)(a) of the Arbitration Act if it has failed to produce those documents before the Arbitral Tribunal despite having sufficient opportunities to do so.
Headnote:
The Court held that the petitioners were not entitled to produce additional documents at the stage of hearing of arbitration petitions under Section 34(2)(a) of the Arbitration and Conciliation Act, 1996 (the Arbitration Act) as they had failed to produce those documents before the Arbitral Tribunal despite having sufficient opportunities to do so. The Court also held that the amendment to Section 34(2)(a) of the Arbitration Act by the Arbitration and Conciliation (Amendment) Act, 2019 did not apply to the present case as the arbitration proceedings had commenced prior to the amendment.
Fact of the Case:
The petitioners, Konkan Irrigation Development Corporation (KIDC) and the State of Maharashtra, filed arbitration petitions under Section 34 of the Arbitration Act, challenging an arbitral award. During the hearing of the petitions, the petitioners filed two Notices of Motion seeking permission to produce additional documents, including a charge-sheet and FIR, on the ground that they were relevant to the determination of issues arising under Section 34(2)(a) of the Arbitration Act. The respondent, M/s. F.A. Enterprises, opposed the Notices of Motion.
Finding of the Court:
The Court held that the petitioners were not entitled to produce additional documents at the stage of hearing of arbitration petitions under Section 34(2)(a) of the Arbitration Act as they had failed to produce those documents before the Arbitral Tribunal despite having sufficient opportunities to do so. The Court also held that the amendment to Section 34(2)(a) of the Arbitration Act by the Arbitration and Conciliation (Amendment) Act, 2019 did not apply to the present case as the arbitration proceedings had commenced prior to the amendment.
Issues: 1. Whether the petitioners were entitled to produce additional documents at the stage of hearing of arbitration petitions under Section 34(2)(a) of the Arbitration Act? 2. Whether the amendment to Section 34(2)(a) of the Arbitration Act by the Arbitration and Conciliation (Amendment) Act, 2019 applied to the present case?
Ratio Decidendi: 1. The Court held that the petitioners were not entitled to produce additional documents at the stage of hearing of arbitration petitions under Section 34(2)(a) of the Arbitration Act as they had failed to produce those documents before the Arbitral Tribunal despite having sufficient opportunities to do so. The Court relied on the following principles: * An application under Section 34 of the Arbitration Act is adversarial in nature. * The applicant has to prove one of the grounds set out in Sections 34(2)(a) and (b). * The applicant is permitted to file affidavits of his witnesses in proof. * The respondent-defendant is given a corresponding opportunity to place his evidence by affidavit. * The Court may permit cross-examination of the persons swearing to the affidavit. * The Court hears arguments and/or receives written submissions and decides the matter. The Court held that the petitioners had not followed this procedure and had not produced any evidence to support their contention that the additional documents were relevant to the determination of issues arising under Section 34(2)(a) of the Arbitration Act. 2. The Court held that the amendment to Section 34(2)(a) of the Arbitration Act by the Arbitration and Conciliation (Amendment) Act, 2019 did not apply to the present case as the arbitration proceedings had commenced prior to the amendment. The Court relied on the following principles: * Legislation is presumed to be prospective in nature and not retrospective. * A retrospective effect will be given to legislation only if there is a clear intention to do so. The Court held that there was no clear intention in the Arbitration and Conciliation (Amendment) Act, 2019 to give retrospective effect to the amendment to Section 34(2)(a).
Final Decision: The Court dismissed the Notices of Motion filed by the petitioners.
JUDGMENT :
R D Dhanuka, J.
The applicant i.e. Konkan Irrigation Development Corporation (KIDC), the original petitioner and applicant in Notice of Motion (L) No. 2007 of 2019 seeks permission to place on record in the Commercial Arbitration Petition (L) No. 681 of 2019, the charge-sheet dated 25th August, 2015 annexed as Exh.A to the affidavit in support of the Notice of Motion against various persons including the respondent no.1 i.e. M/s. F.A. Enterprises. The State of Maharashtra, the original petitioner in Commercial Arbitration Petition No. 921 of 2019 and the applicant in Notice of Motion No. 2192 of 2019 seeks permission to file on record the affidavit of Shri Sanjay Krishna Ghanekar, Secretary to Government (Project and Coordination), Water Resource Department, dated 21st August, 2019 for placing on record the copy of FIR bearing 123/2015 with all the annexures and copy of charge-sheet dated 8th August, 2016 in Commercial Arbitration Petition No. 921 of 2019 under Section 34(2)(a) of the Arbitration and Conciliation Act, 1996.
2. By consent of parties both the aforesaid Notices of Motion were heard together and are being disposed of by a common order. The Commercial Arbitration Petition (L) No. 681 of 2019 and the Commercial Arbitration Petition No. 921 of 2019 are filed impugning the Arbitration Award dated 3rd April, 2019 passed by the Arbitral Tribunal directing the petitioner in Commercial Arbitration Petition (L) No. 681 of 2019 to pay a sum of Rs.303 Crores approximately with other reliefs against the petitioner in that Commercial Arbitration Petition. The petitioners in Commercial Arbitration Petition No. 921 of 2019 have impugned the same arbitral award. The City and Industrial Development Corporation (CIDCO) has also filed a separate Arbitration Petition bearing No. 793 of 2019 inter-alia praying for setting aside the same arbitral award as against the said petitioner. CIDCO however has not filed any separate notice of motion in the said arbitration petition for the reliefs as sought by the other two petitioners referred to aforesaid.
3. The final hearing of the three aforesaid Arbitration Petitions has already commenced. The petitioners in all the aforesaid three Arbitration Petitions have concluded their arguments. M/s. F.A. Enterprises, who is the contesting respondent has also commenced arguments in the aforesaid three Arbitration Petitions. During the argument of the respondent no.1, the applicants have filed the aforesaid two Notices of Motion for taking additional documents on record in these two Arbitration Petitions.
4. Sometime in the month of February, 2009, tender notice was issued by the Executive Engineer, KIDC for construction of Balganga Dam. The said contract was awarded to the respondent no.1. On 17th July, 2015, this Court constituted the Arbitration Tribunal in a Writ Petition filed by the respondent no.1 for deciding the disputes between the parties. On 9th September, 2016, respondent no.1 filed a statement of claim. After filing of the said statement of claim by the respondent no.1, the KIDC issued a notice on 28th October, 2016 terminating the contract awarded to the respondent no.1.
5. Before filing of statement of claim by the respondent no.1, an FIR was filed and charge-sheet was issued by the Police against the respondent no.1 and others relating to the work awarded to the respondent no.1. On 3rd April, 2019, Arbitral Tribunal made an award allowing part of the claims made by the respondent no.1. In the month of June, 2019, the petitioners filed these two Arbitration Petitions under Section 34 of the Arbitration and Conciliation Act, 1996 (for short 'the Arbitration Act'). During the course of arguments of the respondent no.1, in two of the Petitions, the applicants filed the aforesaid two Notices of Motion.
6. Mr. Aney, learned Senior Counsel for the applicant in Notice of Motion (L) No. 2007 of 2019 invited my attention to the para 130 of the amended statement of claim filed by the respo
