Prima Facie Violation of Natural Justice by Non-Disclosure of Documents Warrants Interim Stay of Award: Calcutta High Court

Calcutta High Court Stays Award Execution Citing Prima Facie Violation of Natural Justice

Kolkata: The Calcutta High Court has granted an interim stay on the execution of an arbitral award, observing a prima facie violation of the principles of natural justice. The court, presided over by Justice Shampa Sarkar, noted that a key document was introduced late in the proceedings, denying one party a fair opportunity to respond.

The decision came in the case of Bridge and Roof Company (India) Limited vs M/S. FEPL Engineering Pvt. Ltd. (AP-COM/64/2025), where the petitioner, Bridge and Roof Company, sought an unconditional stay on the execution of an award passed by the Facilitation Council of Konkan.

Background of the Dispute

The petitioner challenged the arbitral award on two primary grounds. First, it was argued that the award was delivered by a four-member panel, whereas the Facilitation Council was constituted with five members as per the official notification. This raised questions about the proper composition of the arbitral tribunal.

Second, and more critically, the petitioner contended that a crucial document, which heavily influenced the award, was submitted by the award-holder, M/s. FEPL Engineering, only at the final stage as part of their written arguments.

Arguments Presented

Ms. Meharia, learned senior advocate for the petitioner, argued forcefully that this late submission deprived her client of the opportunity to counter the document's contents or explain the context in which it was issued. She asserted that had such an opportunity been granted, it could have altered the outcome of the arbitration.

The petitioner's counsel maintained that this failure to disclose evidence during the hearing stage constituted a severe breach of natural justice, thereby making a strong case for an unconditional stay of the award's execution.

Court's Prima Facie Observations

Justice Shampa Sarkar, in the order, acknowledged the weight of the petitioner's arguments. The court made a preliminary finding that the principles of natural justice appear to have been violated.

The judgment noted:

"In view of non-disclosure of documents at the stage of hearing, the principle of natural justice appears to have been violated. These observations are prima facie as the award holder must be afforded an opportunity to deal with these factual aspects."

The court emphasized that while these were initial observations, they were sufficient to warrant a stay to allow the award-holder to present their side of the story regarding the alleged procedural lapses.

Final Order and Implications

The High Court has directed the respondent (M/s. FEPL Engineering) to file an affidavit in opposition within a week after the Puja Vacation, with the petitioner given a week thereafter to file a reply.

The application for an unconditional stay has been scheduled for hearing on November 17, 2025. In the interim, the court has extended the stay on the execution proceeding until November 30, 2025, providing temporary relief to the petitioner. This order underscores the judiciary's commitment to ensuring that arbitral proceedings adhere to fundamental principles of fairness and due process.