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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
MS. VAIBHAVI D. NANAVATI, J.
Pahal Engineers – Appellant
Versus
The Gujarat Water Supply And Sewerage Board – Respondent
R/Special Civil Application No. 8727 of 2019
Decided on : 14-06-2022
Arbitration and Conciliation Act, 1996 - The court emphasized the self-sufficiency of the Act and the availability of a statutory remedy for challenging orders and awards in arbitration proceedings. The court clarified that interference in arbitration proceedings at any stage is impermissible and parties should avail the statutory remedy provided by the Act.
Fact of the Case:
The writ-applicant filed a statement of claim in an arbitration proceeding, but the respondent objected to its maintainability due to lack of verification and affidavit. The arbitrator rejected the claim statement, leading the writ-applicant to file a writ-application seeking to quash the order and direct the arbitrator to accept the claim statement. The High Court granted interim relief restraining further proceedings. The writ-applicant argued that the defect was curable and had been rectified by filing an affirmed and verified claim statement. The respondent argued that the writ-application was not maintainable and that the claim statement was legally invalid. The High Court set aside the order of the arbitrator and remanded the matter for de novo consideration.
Finding of the Court:
The High Court held that the writ-application was not maintainable as the Arbitration and Conciliation Act provided an alternative remedy through appeal. The court emphasized that interference in arbitration proceedings at any stage is impermissible due to the self-sufficiency of the Arbitration Act. The court also noted that the impugned order concluded the claim of the writ-applicant, making it assailable under the Act. The court rejected the writ-applicant's contention that the defect in the claim statement was not covered under the Act, stating that the remedy was to challenge the order through the statutory remedy under the Act. The court directed the writ-applicant to avail the statutory remedy and excluded the period of pendency for the purpose of counting the period of limitation.
Ratio Decidendi: The court held that interference in arbitration proceedings at any stage is impermissible due to the self-sufficiency of the Arbitration Act. The court emphasized that the Act provides a statutory remedy for challenging orders and awards, and parties should avail this remedy rather than seeking writ relief. The court also clarified that an order concluding the claim of a party in arbitration proceedings can be challenged through the statutory remedy under the Act.
Result: The writ-application was dismissed, and the writ-applicant was directed to avail the statutory remedy under the Arbitration and Conciliation Act to challenge the impugned order.
ORDER :
1. The present writ-application is filed under Article 226 of the Constitution of India seeking the following reliefs :-
(B) The Hon'ble Court be pleased to allow this Petition and issue a writ of Certiorari and any other writ, order or direction, as may be deemed proper by this Hon'ble Court quashing and setting aside the order passed by the Respondent No. 2, being Order dated 24.04.2019, in the arbitration proceedings pending before the Respondent No. 2, and direct the Respondent No.2 to take on record the duly affirmed and verified Claim Statement, a copy of which is annexed as "Annexure - B" to the petition and proceed further with the Arbitration Proceedings from the stage where the impugned order came to be passed, in accordance with law.
(C) Pending admission, hearing and final disposal of the present petition the Respondent No. 2, be restrained from proceeding further with the Arbitration Proceeding, as notified in the Notice dated 25.04.2019, annexed as "Annexure - C" to the present petition.
(D) Ad - Interim reliefs, in terms of para 'C' above, be granted in favour of the Petitioner.
(E) Any other and further orders that are deemed necessary in the interests of justice may be passed.”
2. The facts as stated by the writ-applicant germane to the adjudication of the present writ-application read thus :-
2.1 The writ-applicant herein approached this Court for appointment of an arbitrator to resolve the disputes arising out of the contract bearing No.B-1/83 of 2012-2013, under section 11 of the Arbitration and Conciliation Act, 1996, being I.A.A.P. No. 138 of 2017 whereby by order dated 08.12.2017 the respondent No. 2, Mr. L.C. Kanani, Retd. Member Secretary of the respondent Board came to be appointed as the Sole Arbitrator to resolve the disputes between the parties.
2.2 After preliminary meeting of the Arbitral Tribunal held on 20.01.2018, wherein, as per mutual agreement between the parties, the sole arbitrator took certain decisions. The minutes of the said meeting dated 10.01.2018 are produced at "Annexure – D" to the petition.
2.3 The writ-applicant filed its Statement of Claim before the learned Tribunal on 09.03.2018, along with supporting documents, as per the directions of the Tribunal. As against that, the respondent No. 1 herein filed its written statement to the Claim statement along with the Counter Claim against the writ-applicant on, 25.04.2018.
2.4 In response to the written statement/counter claim filed by the respondent No.1 the writ-applicant filed its Rejoinder Affidavit to the Written statement and reply to the counter claim on 17.05.2018. The writ-applicant preferred an application on 05.09.2018, for production of documents and for amendment of the claim statement which came to be allowed by the learned sole arbitrator on 22.09.2018.
2.5 Final arguments of the claimants commenced by the learned advocate on or about 27.10.2018 which concluded on 23.02.2019. The learned advocate for the respondent No.1 commenced his arguments on 23.02.2019 and during such course of the said arguments, the learned advocate appearing on behalf of the respondent No.1; for the first time raised an oral objection regarding the maintainability of the claim statement of the writ-applicant contending that the same is not verified and supported by affidavit and therefore the same is not maintainable in the eyes of law.
2.6 The sole arbitrator gave certain directions whereby, the writ-applicant was directed to file claim statement before the Tribunal with supporting documents and that in such directions the sole arbitrator had not directed any of the parties to submit their pleadings on affidavit. Unless and until so decided as a procedure by the learned Arbitral Tribunal, it would not be necessary or a requirement to submit the pleadings on affidavit or u
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