The Arbitral Tribunal lacked jurisdiction over the petitioner due to improper notification and exclusion from proceedings, rendering the award invalid.

ORDER

This original petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for brevity, hereinafter referred to as “the Act”) questioning the award passed by the Arbitral Tribunal dated 21.08.2010, for which subsequent correction was made on 16.10.2010.

2. The case of the petitioner is that the petitioner company is carrying on the business of construction contracting. The first respondent called for a tender for the work of construction of mooring dolphin at BD111 etc., vide Tender No.5/JDA/015/2005/E. The petitioner and the second respondent entered into a Memorandum of Understanding (for brevity, hereinafter referred to as “the MOU”) dated 26.05.2005 for the purpose of submitting tender for the said work by forming a Joint Venture between the two, on the basis of mutually agreed terms and conditions.

3. In line with the MOU, the second respondent submitted the tender on behalf of the joint venture, by letter dated 10.06.2005. Negotiations took place between the first respondent and the petitioner and the first respondent was insisting for a rebate of 10.5%, to which the second respondent also agreed, in spite of the petitioner advising otherwise. The petitioner, therefore, sent a revised offer letter dated 05.08.2005.

4. The tender was accepted by the first respondent and after getting various clarifications from the joint venture partners, the first respondent awarded the work by letter dated 15.09.2005. The work faced several bottlenecks and ultimately, the contract was foreclosed and terminated by the first respondent.

5. The second respondent made a claim for damages and for other payments against the first respondent. The petitioner was not made aware of the same and the second respondent straight-away started the arbitration proceedings and the petitioner did not participate in the appointment of the Arbitrator and they were included as the second respondent in the arbitration proceedings.

6. In view of the above, the petitioner raised a preliminary issue with regard to the very maintainability of the proceedings as against the petitioner. The Arbitral Tribunal informed the petitioner that the preliminary objection will be considered at the time of passing the main award. Ultimately, the preliminary objection raised by the petitioner was overruled and the award was passed on merits. Aggrieved by the same, the present petition has been filed before this Court.

7. Issues 1 & 2 framed by the Arbitral Tribunal pertain to the jurisdiction of the Arbitral Tribunal. For proper appreciation, Issues 1 & 2 are extracted hereunder:-

“1. Whether the claim petition filed by the claimant individually without including its Joint Venture Partner viz., Messrs.Nilakantan & Bros., Constructions Pvt Ltd., as a claimant is maintainable?

2. Whether the Hon'ble Tribunal has jurisdiction to adjudicate the claims made against the second respondent?”

8. The findings rendered by the Arbitral Tribunal for Issues 1 & 2 are also extracted hereunder:-

“(51) Issues 1 & 2:

A reading of the above pleadings shows that parties are blowing hot and cold on issues of maintainability and joinder of parties. Claimants and the 2nd respondent are supposed to be joint venture partners accepted by the 1st respondent while awarding the subject contract work. In fact it was the 1st respondent who called to for a joint undertaking in stamp paper from the claimant and the 2nd respondent. making them jointly liable for the contract work, but