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A. K. JAYASANKARAN NAMBIAR, SYAM KUMAR V. M.
POORAM FINSERV PRIVATE LIMITED (NBFC) – Appellant
Versus
SANTHOSH KUMAR ROBINSON K. S. S/O ROBINSON – Respondent
JUDGMENT :
1. This appeal is filed challenging the Order dated 05.07.2024 of the Additional District Court, Thrissur in Arb. O.P. No. 792 of 2017. Appellant herein was the respondent in the said Arb. O.P. The Arb. O.P. had been filed before the District Court by the respondent herein invoking Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act of 1996') seeking to set aside an arbitration award.
2. Arbitration proceedings had been initiated by the appellant seeking to recover amounts due from the respondent under a loan agreement. Though notice issued by the arbitrator had been received by the respondent, he did not choose to participate in the arbitration proceedings. An award for an amount of Rs.37,60,547/-with interest and cost was rendered against the respondent by the arbitrator on 20.08.2017. The said award was challenged by the respondent before the District Court by filing the above Arb. O.P. The learned Judge, after hearing both sides, concluded that the arbitration had been conducted violating the mandates of Sections 11 and 12 of the Act of 1996. The District Court relied on the dictum laid down by this Court in M/s. Hedge Finance
A party cannot challenge the jurisdiction of an Arbitral Tribunal after submitting a statement of defence, as per Section 16(2) of the Arbitration and Conciliation Act, 1996.
An arbitrator's previous findings cannot be blindly followed without independent evaluation, leading to procedural irregularities under the Arbitration and Conciliation Act, 1996.
The main legal point established in the judgment is that objections to jurisdiction must be raised at the appropriate stage, and the findings of the arbitrator on the point of jurisdiction, if not ch....
Unilateral appointment of an Arbitrator by one party cannot be sustained, and any award or order purporting to cast a liability on the objecting party would be non-est.
The appropriate 'Court' for proceedings under Section 34 of the Arbitration Act is determined based on the original jurisdiction, as defined under Section 2(e) of the Arbitration Act.
Unilateral appointment of an arbitrator is void if it violates Section 12(5) of the Arbitration Act; mere participation does not imply waiver without express written consent post-disputes.
The jurisdiction for setting aside arbitral awards lies exclusively with the City Civil Court as per Section 42 of the Arbitration and Conciliation Act, 1996.
Jurisdiction under Section 42 of the Arbitration Act is exclusive, necessitating that challenges to arbitral awards be made before the appropriate court.
The court's decision emphasized the limited scope of Section 34 of the Arbitration and Conciliation Act, 1996, and the grounds for setting aside an arbitral award.
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