I.P. Mukerji, J.

This is an application under Section 34 of the Arbitration and Conciliation Act, 1996. It is made by M/s Inspiration Clothes & U, a registered partnership firm. It does business from 32, Shakespeare Sarani, Kolkata-700017. They want an arbitral award dated 14th March, 2008 published by the Bharat Merchants’ Chamber, Mumbai to be set aside.

By the award the petitioner was directed to pay to the respondent Rs.11,35,026.95 as principal, Rs.15,42,862 as interest and Rs.3000 as arbitration cost, all aggregating to Rs.26,80,888 within 15 days of publication of the award. If there was default the petitioner would have to pay additional interest at the rate of Rs.1.50 per cent per month on the awarded amount till the date of making the payment. The arbitral tribunal comprised of two arbitrators and one presiding arbitrator. It was a unanimous award.

Two things are most important. The petitioner never appeared before the tribunal. Secondly, the award is without any reasons whatsoever. I will set out the material part of it:-

24. “On perusal of the relevant documents in connection with the dispute produced by Plaintiffs and Defendants we have concluded that the Defendants are liable to pay by the Plaintiffs a sum of Rs. 11,35,026.95 being principal due on the account of Plaintiffs.

25. The Defendants are also liable to pay in the Plaintiff a sum of Rs.15,42,862.05 for the year wise interest at the rate of 18% p.a. up to 14.3.2008, thus aggregating to Rs.26,77,889/-.

26. However remaining claims does not pertain to Plaintiff’s firm but to their sister firm, which cannot be included in this Arbitration. These claims can be adjudicated by the respective firm/company by launching separate proceeding but not under this Arbitration, hence the remaining amounts are separated from this reference.

27. In view of the facts, the Defendants are hereby directed to: “PAY TO THE PLAINTIFFS THE SUM OF RS.11,35,026.95 BEING THE PRINCIPAL DUE, AND RS.15,42,862.05 BY WAY OF INTEREST AND RS.3,000.00 ARBITRATION COST” aggregating to Rs.26,80,889.00 within a period of 15 days from the date of this Award.

28. We also Award that if the Defendants do not pay the aforesaid amount to Plaintiffs within a specified period they will pay separately to Plaintiffs the additional interest @ Rs.1.50% per month on the Awarded amount till date if making the payment”.

Under the new Act of 1996, the beneficiary of an award has an uphill task of justifying it when it is both ex parte and without reasons. At this point of time a short background of the case is necessary.

The respondent allegedly sold fabrics to the petitioner between 1999 and 2004, through one Mr. Yogi Agarwal. They raised invoices upon the petitioner. These invoices were allegedly signed by Mr. Yogi Agarwal and contained an arbitration clause for resolution of any dispute that might arise between the parties by the Bharat Merchants’ Chamber, Mumbai. On 19th August 2003, Mr. Yogi Agarwal the respondent issued a notice to the petitioner, invoking the alleged arbitration clause and asking for an arbitration reference to adjudicate upon their claim for Rs.26,93,813.36.

Meanwhile, the petitioner filed a civil suit in the learned City Civil Court at Calcutta (T.S.No.397 of 2003) against Ardy International Pvt. Ltd. and Yogi Agarwal as sole proprietor of Yash Traders praying for a decree of a sum of Rs.9,48,143,45. Incidentally, it may be stated that Yogi Agarwal is a Director of Ardy International Pvt. Ltd. On or about 11th October 2003 the respondent filed a formal claim with the said Chamber for Rs.29,82,090.16 with future interest. On 13th October 2003, Bharat Merchants’ Chamber directed the petitioner, in a notice to file their counter-statement.

At or about the same time, the petitioner filed an application for injunction under Order XXXIX rules 1 and 2 of the Code of Civil Procedure in the said suit before the learned City Civil Court praying for stay of the arbitration proceeding.

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