IN THE HIGH COURT OF DELHI
C. Hari Shankar, J.
Vag Educational Services (M/s.) - Appellant
Versus
Aakash Educational Services Ltd. - Respondent
CM(M) 92 of 2021 & CM Appl. 4050 of 2021
Decided On : 12-10-2022
1. Ms. Qausar Khan appears for the respondent in this matter and submits on instructions that she has no objection if this petition is disposed off on the basis of the submissions advanced by Ms. Tanya Agarwal, learned Counsel for the petitioner and on the basis of the material on record.
2. Accordingly, I have heard Ms.Agarwal and proceed to dispose of the matter on the basis of the record available with the Court.
3. The issue in controversy is brief. Arb.Case No. 110/18, which was continuing between the petitioner and the respondent before a learned Sole Arbitrator, was withdrawn by the respondent, as the claimant in the arbitral proceedings on 21st September 2019. The order passed by the learned Sole Arbitrator on the said date reads thus:
"Arbitration Case No. 110/18
AESL V. VAG Educational Services Ltd.
21.9.2019
Pr: Sh. Shwaney Singh Meena A/R with Ms. Namita Advocate for the claimant
Shri Mahesh Chandra Gupta Adv for the NC/Respondent with Shri Vishal Gupta
In view of the submissions of the A/R and Ld. Counsel for the claimant the present matter is dismissed as withdrawn.
Order announced and dictated in open tribunal
File be kept on record.
21.9.2019
SC Rajan
Sole Arbitrator"
4. Subsequently, the respondent, as the claimant in the arbitral proceedings, moved an application seeking recall of the afore-extracted order dated 21st September 2019. It was sought to be contended, therein, that no consent, for withdrawal of the arbitral proceedings, had been granted either by the authorised representative or by the "proxy Counsel" who was present on behalf of the respondent-claimant.
5. However, during the pendency of the said application, an affidavit was filed by the Counsel representing the respondent- claimant, adopting an entirely different stand. In the said affidavit, it was sought to be contended that the learned Counsel had inadvertently signed the withdrawal order sheet of the arbitral proceedings, as her instructions, from her Senior Counsel were to withdraw another matter pending before the same learned Sole Arbitrator.
6. As such, the affidavit effectively gave up the plea, in the application, that the order dated 21st September 2019, of the learned Sole Arbitrator, terminating the arbitral proceedings as withdrawn, was passed in error or without authorisation. Learned Counsel for the respondent-claimant accepted responsibility for having signed the withdrawal application, but pleaded that it was owning to an inadvertent mistake.
7. By the impugned order dated 18th January 2020, the learned Arbitrator allowed the afore-noted application of the respondent- claimant and restored the arbitral proceedings, observing that a party could not be permitted to be prejudiced owing to fault of Counsel. However, the learned Arbitrator took exception to the assertions in the application which, he felt, questioned his impartiality in the proceedings. He, therefore, recused from the proceedings and allowed parties to appoint an alternate arbitrator.
8. The said order dated 18th January 2020 formed subject matter of challenge in the present petition instituted under Article 227 of the Constitution of India.
9. I had initial misgivings regarding the maintainability of the present petition, predicated on the judgments of the Supreme Court in SBP & Co. v. Patel Engineering Ltd. and Anr., (2005)8 SCC 618 and Bhaven Construction v. Executive Engineer Sardar Sarovar Narmada Nigam, (2022)1 SCC 75. However, having heard Ms. Agarwal, learned Counsel for the petitioner and on a careful perusal of the said decisions, the situation which obtained in those cases appears distinguishable from that which obtains in the present case. The position of law which emerges from the decisions in SBP and Bhaven Construction which has also been adopted in earlier decisions rendered by me, is that interlocutory orders passed during arbitral proceedings cannot be challenged under Article 227 of the Constitution of India, as
An arbitrator loses jurisdiction after the termination of proceedings, rendering any subsequent orders void.
Arbitrators must consider recall applications under Section 25(a) of the Arbitration Act when sufficient cause is shown, especially in the absence of alternate remedies for appeal.
High Court’s exercise of jurisdiction under Article 227 of the Constitution, and setting aside of the order of the Tribunal.
The main legal point established in the judgment is the arbitrator's duty to inform the claimant of their failure to communicate their claim and to provide an opportunity to show sufficient cause, an....
The Arbitrator has jurisdiction to consider recall of a termination order if sufficient cause is shown for non-filing of claims, reinforcing judicial support for arbitral processes. The defaulting pa....
The Arbitral Tribunal cannot grant liberty to file fresh claims after withdrawal, as it exceeds its jurisdiction and renders it functus officio.
Parties involved in arbitration may withdraw petitions and seek recourse before appointed arbitrators to maintain their rights under the Arbitration and Conciliation Act.
The main legal point established in the judgment is that interim orders in arbitration proceedings, not falling within the appealable orders under the Act, are not subject to correction by the High C....
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