Manbhupinder Singh Atwal S/O Barinder Singh Atwal vs Neeraj Kumarpal Shah

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(Guj) 1695

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SUNITA AGARWAL, C.J., PRANAV TRIVEDI, J.
Manbhupinder Singh Atwal S/O Barinder Singh Atwal - Appellant
Versus
Neeraj Kumarpal Shah - Respondent
R/FIRST APPEAL NO. 2819 of 2024 With CIVIL APPLICATION (FOR STAY) NO. 1 of 2024 In R/FIRST APPEAL NO. 2819 of 2024 With R/FIRST APPEAL NO. 2830 of 2024 With CIVIL APPLICATION (FOR STAY) NO. 1 of 2024 In R/FIRST APPEAL NO. 2830 of 2024 With R/FIRST APPEAL NO. 3066 of 2024 With R/FIRST APPEAL NO. 3096 of 2024
Decided on : 13-06-2025

Advocates Appeared:
For the Appellant :DR. S. MURLIDHAR, SR.ADVOCATE assisted by MR PRANAV VYAS, MR. KARTIK YADAV and MR.PARTH CONTRACTOR
For the Respondent:MR SAURABH N. SOPARKAR, SR. ADVOCATE assisted by MR. BHADRISH S. RAJU, MR KARAN SHAH and MR MANYA ANJARIA

JUDGMENT :

SUNITA AGARWAL, J.

1. At the outset, we may record that the matter was heard at length on various dates and the judgement was reserved on 10.03.2025. There is some delay in the delivery of the judgment, which we want to place on record. The delay has occurred on account of an emergent medical condition in the family of the Presiding judge, the author of the judgement, who had to proceed on leave for one month from 17.03.2025. The judgement was prepared during the summer vacation commenced from 09.05.2025 ended on 09.06.2025, and is being delivered without any further delay on 13.06.2025.

2. For the convenience of readers, the judgment is divided into parts as indicated in the table of contents, given hereinbelow :-

Table of contents

Sr. No.	Subject	Page Nos.
A	Preface	5
B	An overview of litigation	6
C	Preliminary Issues (i) Section 34 applications grossly time barred - beyond limitation under Section 34(3) of the Act’ 1996 ; (ii) Maintainability of the Appeals of the respondents under Section 37 filed as Cross-Appeals; (iii) Section 29A – Termination of Mandate of the Arbitral Tribunal.	16 16 35 43
D	Issue of Fee and Costs being Exorbitant: Whether Jurisdictional Error? Analysis	75 92
E	Scope Of Section 34/37: Principle Of Interference in the Award on the ground being in conflict with the Public Policy of India.	130
F	Grounds of Challenge to the Arbitral Award (i) Non-Disclosure under Section 12(1) Analysis (ii) Plea of violation of Principles of Natural Justice and Bias - violation of Section 18 of the Act' 1996 (a) & (d) : Non-adjudication of Counter claims of the respondents and denial of opportunity to lead evidence. Analysis (c) : Unilateral fixation of the fee agreeable to the claimant's only :- Violation of Natural Justice and Bias Conclusion on the plea of Bias - Violation of Section 18 of the Act' 1996.	160 160 177 193 206 210 219 226
G	Merits of the claims (a) Award of INR 22.19 Crores with interest for misappropriation of funds of LLP Analysis (b) Award of damages to the tune of INR 84 Crores for Loss of Profits Analysis (c) Award of Costs and Expenses, etc.	228 229 246 251 256 259
H	Doctrine of Severability : When claims are distinct	275
I	Conclusion	282
J	Operative Portion	283

(A) Preface

3. This is a matter pertaining to an arbitral award passed in an international commercial arbitration proceedings. The above referred two connected First Appeals No. 2819 and 2830 of 2024 under Section 37 of the Arbitration and Conciliation Act, 1996 have been filed by the original claimant, namely Mr. Manbhupindar Singh Atwal (Mr.M.S. Atwal) challenging the judgment and order dated 05.07.2024 passed by the learned Single Judge in allowing the applications under Section 34 of the Arbitration and Conciliation Act, 1996 (in short as the "Arbitration Act' 1996), viz. Arbitration Petition No. 23 of 2023 and Arbitration Petition No. 24 of 2023, filed by respondents no.1 and 2, viz. Mr. N.K. Shah and Mr. K.S. Jhadwani, resulting into setting aside of the arbitral award dated 16.04.2021 delivered by the majority (in the ratio of 2:1) of three member arbitral tribunal.

4. The record indicates that an execution petition for enforcement of the arbitral award dated 16.04.2021 filed by the appellant was registered as Arbitration Petition No. 110 of 2022 and has also been decided along with the application under Section 34 of the Arbitration Act' 1996 challenging the arbitral award, inasmuch as, with the setting aside of the arbitral award, no further order was required to be passed in the execution petition.

5. The other two connected appeals, viz. First Appeals No.3066 of 2024 and 3096 of 2024 under Section 37 of the Arbitration Act' 1997, have been filed by the original respondent Nos. 1 and 2 challenging certain findings of the Court in the order impugned dated 05.07.2024 passed under Section 34 of the Act' 1996.

(B) An overview of the Litigation:-

6. We may note that the First Appeal No. 2819 of 2024 (under Section 37) (arising out of Arbitration Petition No. 23 of 2023) was initially filed by t