Parties in arbitration proceedings must comply with orders and actively participate in the proceedings, failing which they may be deemed to have obstructed the proceedings and disentitled to relief.

JUDGMENT

Vibhu Bakhru, J. - Unison Hotels Private Limited (hereinafter 'Unison') has filed the present petition impugning an Arbitral Award dated 08.05.2015 (hereinafter 'the impugned award') rendered by the Arbitral Tribunal comprising of a Sole Arbitrator on the ground that it was passed without affording Unison a proper opportunity to be heard.

2. Mr. Darpan Wadhwa, learned senior counsel appearing for Unison had, at the outset, submitted that the impugned award is liable to be set aside on the sole ground that Unison was denied the opportunity to present its defence and therefore, the impugned award is liable to be set aside in terms of Clause (iii) to Sub-section (2) of Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter 'the A&C Act'). Thus, the principal question that falls for consideration by this Court is whether the impugned award falls foul of Section 34(2)(iii) of the A&C Act.

Factual Matrix

3. Unison is a company incorporated under the Companies Act, 1956 and is engaged in the Hospitality business. It had launched a hotel named "The Grand" New Delhi (earlier known as "Grand Hyatt", New Delhi). The said property is a 400 room hotel, which opened for guests in the year 2000. The respondent (hereinafter 'VIPL') is engaged in the business of interior decoration on turn-key basis, providing infrastructure, improvements, interior designing etc.

4. Unison had engaged VIPL for providing certain services and executing works in connection with redevelopment/development of its hotel - The Grand. Admittedly, Unison had issued four separate Work Orders to VIPL - Work Orders dated 01.07.2008; Work Order dated 28.08.2008; Work Order dated 28.11.2008; and Work Order dated 28.12.2008 for executing certain works. VIPL claims that the rates for such extra items were to be derived in terms of the contract. It claims that at the request of Unison, it executed certain extra works but its claims, in that regard, were not paid. VIPL raised final bill aggregating to Rs. 9,14,97,478/- and against the same, Unison paid a sum of Rs. 6,97,25,620/-. According to VIPL, Unison failed and neglected to pay the balance amount of Rs. 2,43,71,848/-, without any justifiable reason. VIPL claims that the only reason provided by Unison for withholding the said payment was the non-receipt of a completion certificate by the Engineer appointed by Unison. According to VIPL, the said reason was without any substance, as the Engineer had cleared and approved the measurements, as submitted by VIPL, along with the Final Bill at the material time. However, certain objections were made regarding the quality of work after a considerable period had elapsed.

5. Since Unison failed to release the payments, which according to VIPL were owed by Unison, VIPL issued a notice of demand dated 30.06.2011 and invoked the Arbitration Clause. It also suggested the name of a former Additional District and Sessions Judge for being appointed as the Sole Arbitrator. Unison responded to the said notice by a letter dated 29.07.2011, denying the claims raised by VIPL. Further, it did not concur with the appointment of an Arbitrator as suggested by VIPL.

6. In view of the impasse, VIPL filed a petition under Section 11(6) of the A&C Act (being ARB.P. 316/2011) in this Court praying that an Arbitrator be appointed. And, by an order dated 09.10.2012 passed in the said matter, this Court appointed Justice Devinder Gupta, a former Judge of this Court as the Sole Arbitrator to adjudicate the disputes between the parties. This Court further directed that the Arbitration would be conducted under the aegis of Delhi International Arbitration Centre (then known as 'Delhi High Court Arbitration Centre').

7. Thereafter, by a letter dated 28.10.2012, the learned Arbitrator informed the parties that he had accepted his appointment as an Arbitrator and called upon the parties to appear for a preliminary hearing on 09.11.2012. However, none of the parties appeared before him on that date.

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