The withdrawal of an amendment application does not invalidate a previously filed counter claim that is included in the arbitration reference.

JUDGMENT

Najmi Waziri, J. (Oral)

The hearing has been conducted through hybrid mode (physical and virtual hearing).

CM APPL. 9795/2020 (exemption)

Allowed, subject to all just exceptions.

The application stands disposed-off.

FAO(OS) 3/2018 & CM APPL. 9794/2020 (stay)

1. In an application under Section 11 of the Arbitration and Conciliation Act, 1996 ("the Act") preferred by the respondent, a reply was filed by the appellants along with their counter claim. With the consent of the parties, dispute was raised before the learned Arbitrator. On 11.01.2001, this Court noted as under:

"Learned counsel for the parties are agreed that the disputes raised in the present petition as well as in the reply may be referred to the arbitration of Justice Jaspal Singh (Retd. Judge of this court).

In this view of the matter, I appoint Justice Jaspal Singh (Retd. Judge) as an Arbitrator to decide the dispute between the parties. The parties are at liberty to approach the learned Arbitrator for any interim relief. The learned Arbitrator is at liberty to fix his fees and other miscellaneous expenses.

Accordingly, the petition and IA stand disposed of."

(emphasis supplied)

2. The reference included the claim and the counter claim. On 28.04.2001, the learned Arbitrator passed the following order:

"Statement of Claim stands filed. Reply to the Statement of Claim be filed within two weeks with advance copy to the other side. Copies of documents be also filed along with the Reply. The Respondent has already filed a Counter Claim. Reply to the same be also filed within 10 days along with copies of documents. Advance copies be furnished. Rejoinders be filed before the next date along with Affidavits regarding admission/denial of documents.

Put up on 18th of May, 2001 at 6.00 P.M. for framing of issues.

Arbitral fee would be Rs.11,000/- per hearing to be shared equally by both the sides."

(emphasis supplied)

3. In effect, replies were to be filed to the statement of claim and to the counter claim. The parties filed their respective replies. An application had been moved by the appellant seeking to amend the counter claim which was subsequently withdrawn. Thereafter, evidence was led. The parties were heard on their respective claims and counter claims. In the claim petition an award has been passed on the respondents. However, apropos the counter claim, the learned Arbitrator did not return a finding and has observed as under:

".......However, I need not deal with these Counter Claims because ultimately the application for amendment was withdrawn. Even otherwise these Counter Claims are beyond the scope of the reference....."

4. What is to be seen from the above is that the proposed amendment was withdrawn and whatever may have been the merit of the appellant's counter claim as filed before this Court and on which notice had been issued by the learned Arbitrator on 28.04.2001 would remain unaltered, intact and alive. The mere withdrawal of the amendment application would not obliterate the counter claim itself, for whatever worth it may be.

5. Secondly, the reference by this Court to the learned Arbitrator was in respect to the disputes between the parties. Their disputes had already been recorded in the form of the claim and the counter claim. Therefore, the scope of reference included both the claim and the counter claim.

6. This appeal impugns the order of the learned Single Judge passed on 01.11.2017 which held inter alia that in the withdrawal of the amendment application there is an acknowledgment of the petitioner that it had not filed a counter claim.

7.