High Court Of Delhi
INTERNATIONAL DATA PROCESSING COMPANY PRIVATE LIMITED - Appellant
Versus
MUNICIPAL CORPORATION OF DELHI - Respondent
Suit 11-A of 1993
Decided On : 11/28/2001
Arbitration - Principles of Res Judicata - Arbitration Act, 1940 - Section 30, Section 33 - K P Poulose vs. State of Kerala (1975) 2 SCC 236 - Union of India vs. Nank Singh AIR 1968 SC 1370 - Har Swarup Vs. The General Manager, Central Railway and Ors. AIR 1975 SC 202
Fact of the Case:
The arbitrator submitted an award, and objections were filed under Section 30 read with Section 33 of the Arbitration Act, 1940. The objector alleged that the arbitrator ignored the principles of res judicata and had no jurisdiction to go into the legality of the agreement. The court had dismissed a previous writ petition related to the same matter. The court referred the disputes to the arbitrator, and the arbitrator passed the award.
Finding of the Court:
The court found that the arbitrator's failure to consider relevant documents and questions amounted to legal misconduct. The dismissal of the previous writ petition operated as res judicata, and the arbitrator should have considered whether res judicata applied. The court set aside the award and held that the applicants were not entitled to the claim.
Issues: The main issue was whether the award was liable to be set aside based on the objections raised. The court also considered the application of res judicata and the jurisdiction of the arbitrator.
Ratio Decidendi: The court held that the arbitrator's failure to consider relevant documents and questions amounted to legal misconduct. The dismissal of the previous writ petition operated as res judicata, and the arbitrator should have considered whether res judicata applied.
Final Decision: The court set aside the award and held that the applicants were not entitled to the claim.
( 1 ) SHRI P. S. Sawhney had been appointed as the arbitrator. The learned arbitrator had submitted the award. In pursuance thereto objections have been filed under Section 30 read with Section 33 of the arbitration Act, 1940. The same have been filed on behalf of the objector (Delhi Electric Supply undertaking ).
( 2 ) IT has been pleaded that the arbitrator has misconducted the proceedings because principles of res judicata have been ignored. The applicant (M/s international Data Processing Company Pvt. Ltd) had filed civil writ No. 3302/90 before this court. The relief claimed were basically the same as were claimed in the arbitration proceedings. The said writ petition had since been dismissed. Since the earlier writ petition had been dismissed therefore the principles of res judicata would apply. It has further been alleged that the arbitrator had no jurisdiction to go into the legality of the agreement, which is outside the scope of the reference. The award otherwise is also claimed to be self-contradictory because on one hand the arbitrator has held in paragraph 8. 2 that clause 20 of the agreement is valid for five years from the date of the commencement of the supply and could be terminated only after 12 months notice. On the other hand arbitrator has held in paragraph 8. 4 that objectors letter dated 10. 4. 1989 is intended to satisfy the requirements of notice. In that view of the matter it is asserted that award is liable to be set aside.
( 3 ) IN the reply filed it is denied that the arbitrator has misconducted himself. It is denied that the principles of res judicata have been ignored. So far as dismissal of the writ petition no. 3302/90 is concerned, it has been pointed that it was dismissed at admission stage without going Into the merits. It was after dismissal of the writ petition that present reference was made to the arbitrator. It is denied therefore that principles of res Judicata would be attracted. According to the applicant arbitrator has considered the whole material before him and he Is the final Judge with respect to the facts. He had considered the factors available and come to a right conclusion. On 30/03/1995 this court had framed the following Issues. "
1. whether the award is liable to be set aside on the objections raised in this petition 2. Relief.
( 4 ) ISSUE No. 1 : The main stress on behalf of the objector was that the present proceedings are barred by the principles of res Judlcata and therefore the award of the arbitrator is liable to be set aside.
( 5 ) THE principle is not in dispute that If the arbitrator Ignores particular facts in that event It would be taken to be a misconduct. Under Section 30 (a) of the Arbitration Act, 1940 an award could be set aside when the arbitrator misconduct himself or the proceedings. Misconduct Is not contemplated as a moral lapse. It can be a legal misconduct. If the arbitrator arrives at a total erroneous findings that would be taken to be a legal misconduct. Reference in this connection can then be made to the decision of the Supreme Court in the case reported as K P Poulpse vs. State of Kerala and Anr. (1975) 2 SCC 236. In the cited case the Supreme Court held that if the arbitrator has not considered the relevant document it can well be taken to be a misconduct. In other words, if a relevant question or the material question is not considered, it must be taken to be a legal misconduct.
( 6 ) BEFORE proceeding further some of the facts which are not in controversy can be delineated. The applicant had filed an application under Section 22 of the Arbitration Act for referring the disputes between the parties to the arbitrator, while the said petition had been filed and was pending in this court applicant preferred a writ petition no. 3302/90 in which the applicant claimed the following reliefs :-
(A) that the power connection through meter no. 9100083 from the DESU to the petitioner be restored forthwith. (b) that the Hon ble Court may be
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