High Court Of Calcutta
AMITAVA LALA
SARKAR ENTERPRISE - Appellant
Versus
GARDEN REACH SHIPBULDERSAND ENGINEERS LIMITED - Respondent
A. P. 267 Of 1999
Decided On : 05/25/2001
ARBITRATION AND CONCILIATION ACT, 1996 - SECTIONS 34, 13(5), 16, 42 - JURISDICTION OF COURT - APPOINTMENT OF ARBITRATOR - WAIVER/ESTOPPEL/ACQUIESCENCE - AWARD - SETTING ASIDE.
Fact of the Case:
The petitioner, a small-scale industry, entered into an agreement with the respondent, a large-scale industry, for dredging work. Disputes arose between the parties, and they agreed to refer the matter to arbitration. The Arbitrator, who was the Chairman-cum-Managing Director of the respondent company, passed an award in favor of the respondent. The petitioner filed an application under Section 34 of the Arbitration and Conciliation Act, 1996, seeking to set aside the award.
Finding of the Court:
The Court held that the petitioner's challenge to the jurisdiction of the Arbitrator was barred by waiver/estoppel/acquiescence, as the petitioner had participated in the arbitration proceedings without raising any objection to the Arbitrator's jurisdiction. The Court also held that the petitioner's argument that the Arbitrator had traveled beyond his jurisdiction was without merit, as the Arbitrator had acted within the four corners of the reference framed by the Court. The Court further held that it had jurisdiction to entertain the application under Section 34 of the Act, as the application was made under "this part" of the Act, which includes Sections 9 and 11, under which the parties had agreed to refer the matter to arbitration.
Issues: 1. Whether the petitioner's challenge to the jurisdiction of the Arbitrator was barred by waiver/estoppel/acquiescence? 2. Whether the Arbitrator had traveled beyond his jurisdiction? 3. Whether the Court had jurisdiction to entertain the application under Section 34 of the Act?
Ratio Decidendi: 1. The petitioner's participation in the arbitration proceedings without raising any objection to the Arbitrator's jurisdiction amounted to waiver/estoppel/acquiescence, barring the petitioner from challenging the Arbitrator's jurisdiction at a later stage. 2. The Arbitrator had acted within the four corners of the reference framed by the Court, and therefore, the petitioner's argument that the Arbitrator had traveled beyond his jurisdiction was without merit. 3. Section 42 of the Act confers exclusive jurisdiction on the Court to entertain all applications arising out of an arbitration agreement and the arbitral proceedings, once an application has been made under "this part" of the Act, which includes Sections 9 and 11, under which the parties had agreed to refer the matter to arbitration.
Final Decision: The Court dismissed the petitioner's application under Section 34 of the Arbitration and Conciliation Act, 1996, on merit, holding that there was no reason to interfere with the Arbitrator's award.
( 1 ) THIS is an application under S. 34 of the Arbitration and Conciliation Act, 1996. Section 34 of the Act speaks for certain conditions under which the recourse of the Court against an arbitral award may be obtained by way of making an application for setting aside the arbitral award. At the inception it is to be said that unlike the Arbitration Act, 1940, scope and ambit of setting aside the Arbitrator's award under the new Act is very limited. It operates as good as decree. Therefore, the Court would be very slow in interfering with it unless an exceptional circumstances exists which can lead to a position of nullifying the claim. This is settled principle of law that unless and until the award seems to be bad from the fact of it, it should not be interferred with as an appeal from such award to adjudge the mental process of the Arbitrator. Such well settled principle of law practically codified by giving a rigid parameters of consideration under new Act so that the Court may not be unnecessarily burdened with such litigations when the parties themselves choose their own forum.
( 2 ) THE fact remains that by consent of the parties, this Court was pleased to appoint Chairman-cum-Managing Director of the respondent-Company as Arbitrator. From the order of the Court dated 11/05/1998, it appears that the Arbitrator was directed to proceed expeditiously and in summary manner so that there should not be any delay in disposing the matter. The Arbitrator was directed to adjudicate the claims and counter claims to be REFERRED TO him by the parties. In turn, when the matter was REFERRED TO the Arbitrator, the following issues as settled between the parties, were framed:-1 (A) Was the Claimant asked by the Respondent to bring the dredger at G. R. S. E. (Main) for dredging work three months prior to 12/03/1997. It so, whether any work was allotted to the claimant? 1 (b) Is the claimant entitled to Rs. 1,000. 00 (Rupees One thousand only) per day during the idle period? 2 (a) Whether any or all of the terms and conditions specified in the agreement dated 10/07/1999 are opposed to any statutory law or public policy or hit by principles of unequal bargaining? 2 (b) Whether the contract dated 10/07/1997 is legal, valid and binding upon the parties? 3. Whether the minutes of the joint meeting dated 5/12/1997 have been waived or violated by the Respondent? 4 (a) Whether the unilateral termination of the contract dated 10/07/1997 by the Respondent was proceeded by a legal and valid notice? 4 (b) Whether termination of the contract dated 10/07/1997 by the respondent by issuing letters dated 8th Jan. 1998 and 18/04/1998 are legal and valid? 5. Whether the claimant is guilty of any breach of the terms of the contract dated 10/07/1997? 6. Whether the Respondent is guilty of any breach and/or violation of the terms of the contract dated 10/07/1997? 7. Whether the Respondent is guilty of waiver, acquiescence or any other principles of law and equity? 8. Whether the Claimants are entitled to their claims set out in para (1) to (h) at pages 14 and 15 of their statements of claim or any part thereof? 9. Whether the Respondents are entitled to their claims set out in para 40 (a) to 40 (d) at pages 16 to 18 of their counter statement of facts and counter claims of any part thereof? 10. To what other reliefs, including interests, the parties are entitled to? 11. Whether the claimant is entitled to interim arbitral award of Rs. 5,85,322. 40 and whether the claimant is entitled to withdraw the amount deposited with the Registrar, Original Side, High Court, at Calcutta?
( 3 ) OUT of all the issues, leaving aside the issue No. 2 (a) or at best 2 (b) as above, all other issues are either relating to question of fact or mixed question of law and fact, which cannot be spelt out by this Court in an application under S. 34 of the Act unlike an appeal. The award is a speaking award. The rest are discussed hereunder :issue Nos. 2 (a) and 2 (b)
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