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2024 Supreme(Online)(MAD) 41102
The appointment of an arbitrator may not be objected to after participants have actively engaged in proceedings; waiver rights can occur through participation without timely objections.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 4 and 12(5) - Appeals for setting aside a lower court's order that set aside an arbitral award. The lower court found the appointment of the Sole Arbitrator flawed, yet did not substantiate this finding with clarity on which provision was violated. The arbitrator's appointment was also supported by a joint application, indicating no objection from parties at that time. The respondents raised objections only post-award. (Paras 11, 12, 30)
(B) Waiver of objections - Respondents failed to object at any stage during arbitration, thus waiving their rights per Section 4. Their post-award objections were assessed as an abuse of process. (Paras 21, 24, 32)
(C) Dismissal of lower court's order - The court allowed the appeal, quashed the lower court's order, and remanded the matter to reconsider other grounds raised by the respondents. Respondents were ordered to pay costs. (Paras 32)
IN THE HIGH COURT OF JUDICATURE AT MADRAS RESERVED ON : 19.11.2024 DELIVERED ON : 26.11.2024 CORAM :
THE HON'BLE MR.K.R.SHRIRAM, CHIEF JUSTICE AND THE HON'BLE MR.JUSTICE SENTHILKUMAR RAMAMOORTHY O.S.A. (CAD) Nos.62 and 63 of 2023 and C.M.P.Nos.14361 and 14368 of 2023 O.S.A (CAD) No.62 of 2023: VR Dakshin Private Limited (formerly known as Sugam Vanijya Holdings Private Limited)
rep. by its Authority Signatory, Ramu Rangaraju, Plot No.11B, Sy. No.40/9, Devasandra Industrial Area, 2nd Stage, K.R. Puram, Hobli, Bengaluru-560 048. .. Appellant [Cause-title accepted vide order of the Court dated 26.6.2023 made in C.M.P.No.12196 and 12197 of 2023]
Versus
1.SCM Silks Private Limited, rep. by its Director, K.Sivalingam, No.77, New Market Street, Tiruppur-641 604.
2.K.Sivalingam 3.Prime Store, No.77, New Market Street, Tiruppur-641 604.
4.S.Kaarthi
5.Padma Sivalingam
6.Shruthi Kaarthi .. Respondents O.S.A (CAD) No.63 of 2023: VR Dakshin Private Limited (formerly known as Sugam Vanijya Holdings Private Limited)
rep. by its Authority Signatory, Ramu Rangaraju, Plot No.11B, Sy. No.40/9, Devasandra Industrial Area, 2nd Stage, K.R. Puram, Hobli, Bengaluru-560 048. .. Appellant [Cause-title accepted vide order of the Court dated 26.6.2023 made in C.M.P.No.12196 and 12197 of 2023]
Versus
1.Prime Store, No.77, New Market Street, Tiruppur-641 604.
2.S.Kaarthi
3.Padma Sivalingam
4.Shruthi Kaarthi
5.K.Sivalingam
6.SCM Silks Private Limited, No.77, New Market Street, Tiruppur-641 604. .. Respondents Prayer : Appeals under Section 37 of the Arbitration and Conciliation Act, 1996 read with Clause 15 of the Letters Patent read with Order 36 Rule 1 of the Original Side Rules and Section 13(1) of the Commercial Courts Act, 2015 to set aside the common order dated 20.4.2023 made in Arb. O.P.
(Com. Div) No.257 of 2021 and 209 of 2022.
For Appellant : Mr.P.S.Raman in both appeals Senior Advocate for Mr.P.J.Rishikesh For Respondents : Mr.Anirudh Krishnan in both appeals Mr.Adarsh Subrmanian Mr.Mohit Kumar Mr.Sasank Iyer Mr.Anuraag Rajagopalan Ms.Nivethithaa.S COMMON JUDGMENT THE CHIEF JUSTICE Appellant, unhappy with the order dated 20.4.2023 passed by the learned Single Judge under Section 34 of the Arbitration and Conciliation Act, 1996 (the Act), has preferred these appeals under Section 37 of the Act. The learned Single Judge, by the impugned order, set aside an award dated 22.3.2021 made by the Sole Arbitrator, Hon'ble Mr. Justice A.Ramamoorthy, a Former Judge of the Madras High Court, inter alia, on grounds of appointment of the Sole Arbitrator purportedly being foul of the Seventh Schedule read with Section 12 of the Act.
2. Appellant is engaged in the business of developing and operating commercial projects and malls. First respondent, which is engaged in the business of operating and running retail textile outlets in the State of Tamil Nadu, popularly known as “The Chennai Silks”, was inclined to open a store in the mall owned and operated by appellant in Chennai. The mall was called VR Chennai Mall (hereinafter referred to as “the Mall”).
3. Appellant and first respondent executed necessary documents, by which first respondent took on lease a space with a carpet area of 34,434 sq.ft. in mall that was owned and operated by appellant. A lease deed dated 12.9.2018 was executed and the same was also registered in the Sub Registrar Office, Anna Nagar. An addendum to the lease deed was executed between the parties on 25.9.2018. Appellant handed over possession of the premises to first respondent on 5.9.2018 and issued a possession notice in this regard. The lease deed was for a term of nine years, with a lock-in period of 36 months commencing from 30.11.2018.
4. First respondent, subsequently, vide email dated 14.12.2018, terminated the lease deed stating “due to unforeseen and unavoidable circumstances the Management of The Chennai Silks have decided not to proceed with the proposed store Nachaas at VR Mall, Chennai.” First respondent also sought refund of the security dep
