In the absence of any agreement between the parties, the sole arbitrator has the absolute authority to decide on whether to allow evidence in a particular case or not: Delhi High Court
In the absence of any agreement between the parties, the sole arbitrator has the absolute authority to decide on whether to allow evidence in a particular case or to proceed with the adjudication of the matter on the basis of documents and other materials as held by the High Court of Delhi through the learned bench led by Justice Amit Bansal in the case of Telecommunication Consultants India Limited v. B. R. Sukale Construction (CM(M) 958/2021) Brief facts of the case are that the present petitions filed under Article 227 of the Constitution of India impugn the order/direction dated 7th October, 2021 and email dated 12th October, 2021 of the sole arbitrator, issued in two separate arbitration proceedings between the same parties. Vide the impugned order/direction dated 7th October, 2021, the sole arbitrator has observed as “ It is decided that no further evidence by way of witnesses will be held for the time being. Proceedings of the case will begin straightaway by arguments by both claimant and respondents. This was considered appropriate for curtailing delay and all also dispute being of contractual/tender nature and all issues are communicated by parties in writing which have already been filed by both parties and taken on record.” The counsel for the petitioner submits that after the order was passed by the arbitrator in both the arbitrations, a communication was sent by the counsel for the petitioner to the arbitrator stating that the petitioner be allowed to lead evidence in the matter. The said request on behalf of the petitioner was rejected by the arbitrator vide the impugned email dated 12th October, 2021. The counsel states that the aforesaid directions passed by the arbitrator are not tenable as the matter requires evidence to be led for proper adjudication of the arbitrations. The counsel appearing on behalf of the respondent on advance notice submits that the arbitrator, who is not a legally trained person but a retired Chief Engineer of Bharat Sanchar Nigam Limited, has taken a considered decision that no evidence by way of witnesses shall be held for the time being and he shall straightaway proceed with arguments of both the claimant and the respondent in order to curtail delay; as per Sections 19 and 24 of the Arbitration Act, failing any agreement existing between the parties, the arbitrator is free to consider the proceedings in the manner it considers appropriate; (iii) it is in the sole discretion of the arbitrator to decide whether to take oral evidence in a case or straightaway decide the matter on the basis of documents and other materials. After hearing the arguments by the learned counsel for the respective parties, the Hon’ble Court held, “In the present cases, the sole arbitrator having decided that the matter can be adjudicated on the basis of the documents on record, has held that no evidence by way of witnesses/oral evidence is required for the time being. No fault can be found in the decision of the arbitrator in this regard. Since no exceptional circumstances or exceptional rarity have been demonstrated/made out in the petitions or during the hearing and given the stage at which the arbitration proceedings are, there is no occasion to warrant the exercise of jurisdiction by this Court under Article 227 of the Constitution of India. In view of the above, there is no merit in the present petitions.”
CM(M) 958 2021 and CM No.959 2021 AMIT BANSAL J.VIA VIDEO CONFERENCING] HON BLE MR. JUSTICE AMIT BANSAL B. R. SUKALE CONSTRUCTION Through Mr. Ankur Gupta Advocate. Respondent Agarwal and Mr. Akshat Goel Through Mr. Amit Meharia Mr. Abinash Petitioner CONSULTANTS INDIA LIMITED TELECOMMUNICATION CM(M) 959 2021 B. R. SUKALE CONSTRUCTION Through Mr. Ankur Gupta Advocate. Respondent Agarwal and Mr. Akshat Goel Through Mr. Amit Meharia Mr. Abinash Petitioner CONSULTANTS INDIA LIMITED TELECOMMUNICATION CM(M) 958 2021 Date of decision: 28th October 2021 IN THE HIGH COURT OF DELHI AT NEW DELHI Signed By:ARUNAKANWARSigning Date:30.10.202122:34:33Signature Not Verified CM(M) 958 2021 and CM No.959 2021 impugned email dated 12th October 2021. said request on behalf of the petitioner was rejected by the arbitrator vide the stating that the petitioner be allowed to lead evidence in the matter. The communication was sent by the counsel for the petitioner to the arbitrator 7th October 2021 was passed by the arbitrator in both the arbitrations a The counsel for the petitioner submits that after the order direction of have already been filed by both parties and taken on record.” and all issues are communicated by parties in writing which delay and all also dispute being of contractual tender nature respondents. This was considered appropriate for curtailing begin straightaway by arguments by both claimant and will be held for the time being. Proceedings of the case will It is decided that no further evidence by way of witnesses arbitrator has observed as under: Vide the impugned order direction dated 7th October 2021 the sole proceedings between the same parties. 12th October 2021 of the sole arbitrator issued in two separate arbitration meeting dated 7th October 2021) dated 7th October 2021 and email dated India impugn the order direction 959 2021 and CM No.38682 2021958 2021 and CM No.38680 2021and The applications are disposed of. Allowed subject to all just exceptions. CM No.38683 2021in CM(M) 959 2020. CM No.38681 2021in CM(M) 958 2021 and Signed By:ARUNAKANWARSigning Date:30.10.202122:34:33Signature Not Verified CM(M) 958 2021 and CM No.959 2021 claimant and the respondent in order to curtail delay as per Sections 19 the time being and he shall straightaway proceed with arguments of both the considered decision that no evidence by way of witnesses shall be held for retired Chief Engineer of Bharat Sanchar Nigam Limited has taken a submits that the arbitrator who is not a legally trained person but a The counsel appearing on behalf of the respondent on advance notice of evidence. the parties the arbitral tribunal has to hold oral hearings for the presentation proviso to Section 24 of the Arbitration Act unless otherwise agreed to by given the opportunity to the petitioner to lead evidence andas per the with regard to the dispensation of oral evidence the arbitrator ought to have ‘Arbitration Act’) since there has been no agreement between the parties Arbitration and Conciliation Act 1996 as per Sections 19 and 24of the and therefore the arbitrator should have allowed the parties to lead oral Arbitration Act that are required to be disposed of in an expeditious manner these are not fast track arbitrations as envisaged under Section 29B of the same would have to be proved by the petitioner by leading evidence have been denied. In view of the denial of the documents as aforesaid the by the respondent herein the documents filed on behalf of the petitioner of the petition being the ‘Affidavit of Admission Denial of Documents’ filed The counsel for the petitioner submits that as per Annexure P 12 requires evidence to be led for proper adjudication of the arbitrations. aforesaid directions passed by the arbitrator are not tenable as the matter The counsel appearing on behalf of the petitioner states that the Signed By:ARUNAKANWARSigning Date:30.10.202122:34:33Signature Not Verified CM(M) 958 2021 and CM No.959 2021 present his case. with equality and each party shall be given a full opportunity to “18. Equal treatment of parties.—The parties shall be treated Arbitration Act the same are set out below for ease of reference: 10. Since both parties have placed reliance on various provisions of the I have heard the rival contentions of the parties. April 2021]. PetitionNo. 6171 2021 preferred whereagainst was dismissed on 27th Kumar Bhalotia and Others. 2021 SCC OnLine 3708 there is limited scope of interference October 2021 and the remaining final arguments are scheduled from 19th cases the hearings in the cases have already been held on 20th and 22nd sole arbitrator has rightly observed that no oral evidence is required in these iv) taking into account the nature of the dispute between the parties the No.370 2014 preferred whereagainst was dismissed on 1st September 2014] Bharat Heavy Electrical Ltd. 2014 SCC OnLine Del 3407 reliance is placed on the judgment of this Court in Silor Associates SA Vs. matter on the basis of documents and other materials and in this regard decide whether to take oral evidence in a case or straightaway decide the considers appropriate it is in the sole discretion of the arbitrator to parties the arbitrator is free to consider the proceedings in the manner it and 24 of the Arbitration Act failing any agreement existing between the Signed By:ARUNAKANWARSigning Date:30.10.202122:34:33Signature Not Verified CM(M) 958 2021 and CM No.959 2021 adjournment without any sufficient cause. impose costs including exemplary costs on the party seeking adjournments unless sufficient cause is made out and may for oral argument on day to day basis and not grant any possible hold oral hearings for the presentation of evidence or Provided further that the arbitral tribunal shall as far as be held. party unless the parties have agreed that no oral hearing shall an appropriate stage of the proceedings on a request by a Provided that the arbitral tribunal shall hold oral hearings at materials: shall be conducted on the basis of documents and other of evidence or for oral argument or whether the proceedings shall decide whether to hold oral hearings for the presentation 1) Unless otherwise agreed by the parties the arbitral tribunal 24. Hearings and written proceedings.— materiality and weight of any evidence. includes the power to determine the admissibility relevance 4) The power of the arbitral tribunal under sub section proceedings in the manner it considers appropriate. arbitral tribunal may subject to this Part conduct the 3) Failing any agreement referred to in sub section the its proceedings. procedure to be followed by the arbitral tribunal in conducting 2) Subject to this Part the parties are free to agree on the 72). Procedure 1908or the Indian Evidence Act 1872 1) The arbitral tribunal shall not be bound by the Code of Civil 19. Determination of rules of procedure.— Signed By:ARUNAKANWARSigning Date:30.10.202122:34:33Signature Not Verified CM(M) 958 2021 and CM No.959 2021 to day basis. required it would hold hearings for presentation of evidence on a day In the event that the Arbitral Tribunal decides that oral evidence is oral evidence is required or not. conducted on the basis of documents and other materials or whether Tribunal has the power to decide whether proceedings shall be v) Unless it has been otherwise agreed to by the parties the Arbitral relevance materiality and the weight of any evidence. iv) The Arbitral Tribunal has the power to determine the admissibility may conduct the proceedings in the manner it considers appropriate. If there is no agreement between the parties the Arbitral Tribunal Arbitral Tribunal in conducting its proceedings. ii) Parties are free to agree on the procedure to be followed by the the Code of Civil Procedure 1908 or the Indian Evidence Act 1872. The Arbitral Tribunal is not bound by the procedure laid down under provisions of the Arbitration Act is summarised below: 11. The legal position that emerges from a reading of the aforesaid making its decision shall be communicated to the parties.” evidentiary document on which the arbitral tribunal may rely in be communicated to the other party and any expert report or or applications made to the arbitral tribunal by one party shall 3) All statements documents or other information supplied to purposes of inspection of documents goods or other property. hearing and of any meeting of the arbitral tribunal for the 2) The parties shall be given sufficient advance notice of any Signed By:ARUNAKANWARSigning Date:30.10.202122:34:33Signature Not Verified CM(M) 958 2021 and CM No.959 2021 Tribunal may determine. The aforesaid provision has the effect produce documents exhibits or other evidence as the Arbitral of jurisdiction power in the Tribunal to require the parties to 19. There is nothing in the Act to contra indicate the existence 25 & 26 of the Act or any of them. the rights of the parties under Sections 13 16 17 22 23 24 to be evolved by the Tribunal cannot be such that it curtails opportunity to present its casethe Arbitral Tribunal of its proceedings. Section 19(3) states that “failing any procedure to be followed by the Arbitral Tribunal in conduct present case the parties have not agreed on any specific the Arbitral Tribunal in conducting its proceedings. In the the parties are free to agree on the procedure to be followed by 18. Section 19(2) states that subject to the provisions of Part I CPC) or the Evidence Act 1872or the Evidence Act 1872(1 of Arbitral Tribunal shall not be bound by the Code of Civil “17. Section 19(1) of the Act inter alia provides that “The this Court in Silor Associates SA wherein it has been observed as 12. The scope of the aforesaid provisions have been duly considered by Signed By:ARUNAKANWARSigning Date:30.10.202122:34:33Signature Not Verified CM(M) 958 2021 and CM No.959 2021 of the arbitrator in this regard. evidence is required for the time being. No fault can be found in the decision the documents on record has held that no evidence by way of witnesses oral arbitrator having decided that the matter can be adjudicated on the basis of basis of documents and other materials. In the present cases the sole in a particular case or to proceed with the adjudication of the matter on the arbitrator has the absolute authority to decide on whether to allow evidence proceedings. In the absence of any agreement between the parties the sole parties with regard to the procedure for carrying out the arbitration 13. Admittedly in the present petitions there is no agreement between the consensually under Section 19(2).” the parties have themselves not evolved the procedure parties. It is for the Tribunal to devise its own procedure if the proceedings need not be evolved by consensus of the 20. The procedure that the Tribunal may adopt for conducting courts — which are governed by the CPC and the Evidence proceedings and cut the procedural wrangles witnessed in the matter of conduct of its proceedings so as to expedite the be vest the Arbitral Tribunal with autonomy and flexibility in fair manner. On the contrary the legislative intent appears to conduct of the arbitration proceedings in a transparent and power to regulate its procedure for effective and expeditious 19 of the Act is not to denude the Arbitral Tribunal of its CPC) and the Evidence Act. The scheme contained in Section which is bound by the rigour of the Code of Civil Procedure arbitration proceedings than that exercised by a civil court — matter of regulating its procedure for conduct of the of vesting the Tribunal with much greater autonomy in the Signed By:ARUNAKANWARSigning Date:30.10.202122:34:33Signature Not Verified CM(M) 958 2021 and CM No.959 2021 said documents at the stage of final hearing. that the arbitrator cannot consider the admissibility and the materiality of the if the said documents have been denied by the respondent it does not mean respondent has denied the documents filed on behalf of the petitioner even As regards the objection of the counsel for the petitioner that the specified under Section 29A of the Arbitration Act. completion of pleadings for making an arbitral award has been statutorily Furthermore it may be noted that a time limit of 12 months from the date of that the arbitration need not be decided in an expeditious manner. arbitration is not being conducted in the fast track procedure does not mean expeditious disposal of all arbitration proceedings. Merely because the of the Arbitration Act as amended from time to time is to ensure early and dispense with oral evidence for early disposal of the dispute. The mandate under Section 29B of the Arbitration Act there was no requirement to that since the present arbitrations are not fast track arbitrations as envisaged 15. There is no merit in the submission of the counsel for the petitioner hearing procedurally mandatory. Arbitration Act or as making the presentation of evidence through oral discretion of the arbitral tribunal as provided under Section 24(1) of the provisos to the main provision cannot be read as taking way the absolute decide whether to hold oral hearings for the presentation of evidence. The of the Arbitration Act which states that the arbitral tribunal shall inter alia provisos have be read in context of the main provision being Section 24(1) provisos to Section 24(1) of the Arbitration Act is totally misplaced. The 14. Furthermore the reliance of the counsel for the petitioner on the Signed By:ARUNAKANWARSigning Date:30.10.202122:34:33Signature Not Verified CM(M) 958 2021 and CM No.959 2021 there is bad faith which is shown ix) The power should be exercised in exceptional rarity or if 226 227 viii) It is prudent not to exercise jurisdiction under Article not encouraged vii) Excessive judicial interference in the arbitral process is necessarily interfere with the arbitral process vi) High Courts ought to discourage litigation which perverse i.e. that the perversity must stare in the face v) Interference is permissible only if the order is completely jurisdiction the writ court would not interfere order is so perverse that it is patently lacking in inherent iv) Though interference is permissible unless and until the exceptional circumstances iii) For interference under Article 226 227 there have to be is a Constitutional provision apply in respect of exercise of powers under Article 227 which ii) The non obstante clause in section 5 of the Act does not under Article 226 227 would be maintainable i) An arbitral tribunal is a tribunal against which a petition the Act. an arbitral tribunal including orders passed under Section 16 of interference under Article 226 227 in challenges to orders by following principles are well settled in respect of the scope of “25. A perusal of the above mentioned decisions shows that the Paragraph 25 of the said judgment is set out below: under Articles 226 and 227 of the Constitution of India has been prescribed. interference with regard to arbitration matters in exercise of jurisdiction of this Court in Surender Kumar Singhal wherein the scope for 17. The counsel for the respondent has rightly relied upon the judgment Signed By:ARUNAKANWARSigning Date:30.10.202122:34:33Signature Not Verified CM(M) 958 2021 and CM No.959 2021 OCTOBER 28 2021 AMIT BANSAL J. 20. The petitions and all pending applications are dismissed. In view of the above there is no merit in the present petitions. Constitution of India. warrant the exercise of jurisdiction by this Court under Article 227 of the stage at which the arbitration proceedings are there is no occasion to demonstrated made out in the petitions or during the hearing and given the 18. Since no exceptional circumstances or exceptional rarity have been be completely avoided. ” to diminish and hence interdicting the arbitral process should x) Efficiency of the arbitral process ought not to be allowed Signed By:ARUNAKANWARSigning Date:30.10.202122:34:33Signature Not Verified 