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2024 Supreme(Guj) 354

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Nirzar S. Desai, J.
Starlog Enterprises Limited – Petitioner
Versus
The Board Of Trustees Of Kandla Port & Ors. – Respondents
R/Special Civil Application No. 4694 of 2024
Decided On : 29-04-2024

Advocates:
Advocate Appeared:
For the Petitioner:Mr SN Soparkar, Sr. Advocate, Mr. Jaimin R Dave, Ms Hirva R Dave

Headnote:

Mandamus - Arbitration Proceedings - Arbitration and Conciliation Act, 1996 - Section 16 - Section 34 - The court discussed the challenge to the rulings of the Arbitral Tribunal disallowing certain questions during the cross-examination of a witness. The petitioner sought the issuance of a writ of mandamus or a writ in the nature of mandamus to quash the impugned rulings and to direct the Arbitral Tribunal to recall the witness for further questioning. The court considered the legal provisions under the Arbitration and Conciliation Act, 1996, and the principles of judicial interference with arbitral proceedings in reaching its decision.

Fact of the Case:

The petitioner challenged certain rulings of the Arbitral Tribunal during the cross-examination of a witness. The petitioner sought the production of documents and the allowance of specific questions, which were disallowed by the Arbitral Tribunal. The court noted that the petitioner had previously challenged its impleadment in the arbitration proceedings, but the challenge was dismissed by the Coordinate Bench of the Court.

Finding of the Court:

The court found that it was premature to interfere with the rulings of the Arbitral Tribunal as the arbitral award had not been published, and the petitioner had not established how the disallowance of questions had caused prejudice. The court dismissed the petition without entering into the merits of the case, emphasizing that it would be open for both parties to raise all contentions on merits before the appropriate forum at the appropriate time.

Issues: The issues involved the challenge to the rulings of the Arbitral Tribunal disallowing certain questions during the cross-examination of a witness and the petitioner's request for the issuance of a writ of mandamus or a writ in the nature of mandamus to quash the impugned rulings and to direct the Arbitral Tribunal to recall the witness for further questioning.

Ratio Decidendi: The court held that it was premature to interfere with the rulings of the Arbitral Tribunal without the petitioner establishing prejudice caused by the disallowance of questions. The court emphasized the principles of judicial interference with arbitral proceedings and the need for exceptional circumstances to warrant such interference.

Final Decision: The petition was dismissed without entering into the merits of the case, and it was emphasized that it would be open for both parties to raise all contentions on merits before the appropriate forum at the appropriate time.

ORDER :

1. By way of this petition, the petitioner has prayed for the following reliefs;

    “18.The petitioner, therefore, prays that this Hon’ble Court be pleased to issue writ of mandamus or a writ in the nature of mandamus or a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, direction or order and be pleased to;

A. Quash and set aside the Impugned Rulings passed by the Learned Arbitral Tribunal including:

i) the ruling on 10 February 2024 insofar as the Learned Arbitral Tribunal disallowed a question whereby RI-W2 was asked to produce a document which RI-W2 had referred to in his previous answers at Annexure-F

ii) the ruling on 26 February 2024 insofar as the Learned Arbitral Tribunal disallowed a question on the ground that the document was not produced by RI-W2 iii) the ruling on 26 February 2024 insofar as the Learned Arbitral Tribunal disallowed a question for being of an omnibus nature

iii) the ruling on 26 February 2024 insofar as the Learned Arbitral Tribunal disallowed a question holding it to be not relevant:

and

B. Pass an appropriate order directing the Learned Arbitral Tribunal to recall RI-W2 so that the wrongly disallowed questions may be posed to him;

C. Pending hearing and final disposal of this petition, the arbitral proceedings may kindly be ordered to be stayed;

D. any other and further relief deemed just and proper be granted in the interest of justice;

E. to provide for the cost of this petition.”

2. The brief facts giving rise to the present petition are as under;

It is the case of the petitioner, as narrated by the learned Sr. Advocate, Mr. Soparkar, that on 20.01.2004, Respondent No.1-the Board of Trustees of Kandla Port floated a tender, inviting applications for the project at Kandla Port Trust for the development of a container terminal at Berth Nos. 11 and 12, i.e. terminals, and licensing out the operation, management and maintenance of the terminal on a build, operate and transfer basis.

2.1 on 23.06.2006. Respondent No.4 – Kandla Container Terminal Private Limited and Respondent No.1 entered into a license agreement, whereby, Respondent No.4 was granted a license for the period of 30 years to carry out the project, on the terms and conditions set out in the License Agreement.

2.2 Pursuant to the execution of the aforesaid License Agreement, it appears that some disputes arose between Respondent No.1 and Respondent No.4 and therefore, as per the order passed by the Coordinate Bench of this Court in Petition under the Arbitration Act No. 52 of 2013, the sole arbitrator was appointed, so as to adjudicate the disputes and differences between Respondent No.1 and Respondent No.4.

2.3 The arbitration proceedings commenced on 21.01.2014 and the parties completed their pleadings and also adduced evidence by way of affidavits, in lieu of examination-in-chief. The cross-examination of the witnesses of Respondent Nos. 2, 3 and 4 has already been completed, whereas, the cross-examination of the witness of Respondent No.1 is underway.

2.4 In the aforesaid background of facts, the present petition is filed against certain rulings given by the Arbitration Tribunal during the course of cross-examination of the second witness of Respondent No.1 by the learned Advocate for the petitioner.

2.5 The petitioner is a company, incorporated under the Companies Act, 1956, which was formerly known as ABG Heavey Industries Limited, whereas, Respondent No.1 is a body, incorporated under the provisions of the Major Port Trust Act, 1963, and Respondent No. 2-Axis Bank and Respondent No. 3- UCO Bank are the lenders, who have provided financial assistance to Respondent No.4 for the aforesaid project. Respondent No.4 is the license agreement holder and which is a wholly owned subsidiary of the present petitioner.

2.6 It is the case of the petitioner that it is not a party to the arbitration agreement and therefore, the petitioner was not joined as a party in the arbitration proceedings, initially. However, pur

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