A. National Highways Act, 1956 (48 of 1956), Section 3G -- Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 -- Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (30 of 2013), Sections 26, 27, 28, 31(3) – Acquisition of land under National Highway Act -- Market value and compensation for acquired land -- Determination of -- Ld. Arbitrator in cases for determination of market value and compensation should indicate reasons since the same will have to be arrived at on a comparative analysis for which the reasons should be recorded and Section 26 to 28 of RFCTLARR Act will be relevant -- Neither the land loser nor the exchequer should suffer in the matter of just and fair compensation -- Hence the reasons under Section 31(3) is to be expected in that manner, the absence of which will call for interference u/s 34 of Act, 1996.

(Para 23)

B. National Highways Act, 1956 (48 of 1956), Section 3G -- Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 -- Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (30 of 2013), Sections 26, 27, 28, 31(3) – Acquisition of land under National Highway Act -- Market value and compensation for acquired land -- Determination of – Award of Arbitrator – Challenge to – Scope of -- While examining the award in the limited scope u/s 34 of Act, 1996, the Court is required to take note as to whether the evidence available on record has been adverted to and has been taken note by the Arbitrator in determining the just compensation failing which it will fall foul of Section 31(3) and amount to patent illegality -- While examining the award within the parameters permissible u/s 34 of Act, 1996 and while examining the determination of compensation as provided u/s 26 and 28 of the RFCTLARR Act, 2013, the concept of just compensation for the acquired land should be kept in view while taking note of the award considering the sufficiency of the reasons given in the award for the ultimate conclusion.

(Para 24)

C. National Highways Act, 1956 (48 of 1956), Section 3G -- Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34, 37 -- Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (30 of 2013), Sections 26, 27, 28, 31(3) – Acquisition of land under National Highway Act -- Market value and compensation for acquired land -- Award of Arbitrator – Error in award – Scope u/s 34 and 37 of Arbitration Act, 1996 -- It would not be possible for the Court entertaining the petition u/s 34 or for the appellate court u/s 37 of Act 1996 to modify the award and alter the compensation as it was open to the court in the reference proceedings u/s 18 of the old Land Acquisition Act or an appeal u/s 54 of that act, it should certainly be open to the court exercising power u/s 34 of Act, 1996 to set aside the award by indicating reasons and remitting the matter to the Arbitrator to reconsider the same in accordance with law in terms of Section 34(4)

(Para 24, 40)

D. National Highways Act, 1956 (48 of 1956), Section 3G -- Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 -- Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (30 of 2013), Sections 26, 27, 28, 31(3) – Acquisition of land under National Highway Act -- Market value and compensation for acquired land -- Assessment of -- Where a document which is proximal to the date of acquisition is not available, it would be open to rely on a document which is much prior in point of time and if the time gap is more, determination could be made by providing for reasonable escalation depending on the area wherein the acquired property is situate and nature of property -- Similarly, in a circumstance where no document which is prior to the date of the acquisition notification is available and the exemplars are subsequent to the date of acquisition notification, the value therein could be noted and reasonable de-escalation be considered to determine the appropriate value -- No strait-jacket formula can be applicable to all cases with arithmetical precision in the matter of determination of compensation.

(Para 32)

E. National Highways Act, 1956 (48 of 1956), Section 3G -- Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34, 37 -- Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (30 of 2013), Sections 26, 27, 28, 31(3) – Acquisition of land under National Highway Act -- Market value and compensating for acquired land -- Patent illegality in award -- Ld. Arbitrator has committed patent illegality in applying two different notifications in determining the market value -- Only course open is to set aside the award and allow the ld. Arbitrator to reconsider the matter.

(Para 48)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 31(7)(a) -- Power/ Discretion of Arbitration Tribunal -- Interest on arbitration award -- Agreement to the contrary – Interpretation of the language employed by the legislature, the position that would emerge, on an analysis of clause (a) of sub-section (7) of Section 31 of the 1996 Act, is as under:

(i) It begins with the words “Unless otherwise agreed by the parties”;

(ii) where and insofar as an arbitral award is for the payment of money, the Arbitral Tribunal may include interest component in the sum for which the award is made;

(iii) the interest may be at such rate as the Arbitral Tribunal deems reasonable;

(iv) the interest may be on the whole or any part of the money;

(v) the interest may be for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made.

Power of the Arbitral Tribunal to award interest, would operate if it is not otherwise agreed by the parties -- If there is an agreement between the parties to the contrary, the Arbitral Tribunal would lose its discretion to award interest and will have to be guided by the agreement between the parties -- Discretion is wide enough -- It may grant or may not grant interest -- It may grant interest for the entire period or any part thereof -- It may also grant interest on the whole or any part of the money.

(Para 15-22)

Arbitration Act, 1940 (10 of 1940), Section 39 -- Constitution of India, Article 226, 227 -- Arbitration award -- Alternative statutory remedy available by way of appeal – Writ jurisdiction – When the statute provides a further remedy by way of appeal against the award and even against the order passed by the learned trial Court making the award a decree of the court, the High Court ought not to have entertained the writ petition and ought not to have set aside the award, in a writ petition -- Impugned judgment and order passed by the High Court is unsustainable and the same deserves to be quashed and set aside -- Liberty reserved in favour of the respondent to take further recourse to law under the provisions of the Arbitration Act, 1940 and in accordance with law -- If such proceedings are initiated within a period of four weeks, the same be considered in accordance with law and on its own merits without raising the issue with regard to limitation.

(Para 2-5)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11 -- Arbitration clause – Impounding of document/ Loan agreement – Power of Arbitrator -- Unless and until the same is produced on record before any Court/Tribunal, there is no question of any impounding the same -- Arbitrator may take call on the impounding of document provided it is produced by the original claimant.

(Para 3)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 33 – Arbitration Award – Modification in – Power of -- Original award was as per the original claim made by the respondent in the statement of claim -- Application u/s 33 for modification of award as per the market value of 3648.80 grams of pure gold at Rs.20,747/- per 10 grams, instead of Rs.740 per gram – Ld. Arbitrator allowed the said application and modified the original award – Held, only in a case of arithmetical and/or clerical error, the award can be modified and such errors only can be corrected -- Order passed by the Ld. Arbitrator is beyond the scope and ambit of Section 33 of the 1996 Act – Same deserves to be quashed and set aside -- Consequently, the original award passed by the learned arbitrator stands restored.

(Para 11-13)

National Highways Act, 1956 (48 of 1956), Section 3G – Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 -- Constitution of India, Article 226 -- Acquisition of land – Award by Arbitrator – Writ jurisdiction -- Competent authority assessed the amount of compensation, matter referred to arbitrator for re-assessment -- As per sub-section 6 of Section 3G the provisions of the Arbitration and Conciliation Act, 1996 shall apply to every arbitration under the Act -- Objections to the award of the Arbitrator are maintainable before the District Court -- Court did not find it appropriate to exercise its writ jurisdiction.

(Para 2-6)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11, 29-A, 43 -- Limitation Act, 1963 (36 of 1963), Section 43, Article 137 -- Appointment of Arbitrator -- Limitation of 3 years – No provision in Arbitration Act specifying period of limitation for filing an application u/s 11 of the Act -- One would have to take recourse to the Limitation Act, 1963, as per Section 43 of the Arbitration Act and it would be covered by the residual provision Article 137 of the Limitation Act, 1963 -- Section 29A mandates that the arbitral tribunal will conclude the proceedings within a period of 18 months -- In view of the legislative intent, the period of 3 years for filing an application u/s 11 would run contrary to the scheme of the Act -- It would be necessary for Parliament to effect an amendment to Section 11, prescribing a specific period of limitation within which a party may move the court for making an application for appointment of the arbitration under Section 11 of the 1996 Act.

(Para 9, 10, 13-17)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11(6A), 16 -- Objection to arbitration -- Preliminary objections – Jurisdiction of – Doctrine of kompetenz-komptenz -- Court is required only to examine the existence of the arbitration agreement -- All other preliminary or threshold issues are left to be decided by the arbitrator u/s 16 -- 2019 Amendment Act has deleted sub-section (6A) in Section 11, however, the same is yet to be notified -- Consequently, sub-section (6A) continues to remain on the statute book, and governs the scope of power under Section 11 for the present.

(Para 26)

C. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11  -- Issue of Limitation – Jurisdiction of Arbitration Tribunal -- Issue of limitation, in essence, goes to the maintainability or admissibility of the claim, which is to be decided by the arbitral tribunal as a preliminary issue, or at the final stage after evidence is led by the parties.

(Para 32-35)

D. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11  -- Issue of Limitation – Time-barred claim – Power of Court – Scope of -- It is only in the very limited category of cases, where there is not even a vestige of doubt that the claim is ex facie time-barred, or that the dispute is non-arbitrable, that the court may decline to make the reference -- However, if there is even the slightest doubt, the rule is to refer the disputes to arbitration, otherwise it would encroach upon what is essentially a matter to be determined by the tribunal.

(Para 37)

E. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11  -- Issue of limitation -- Notice invoking arbitration was issued 5 ½ years after rejection of the claims -- Consequently, the notice invoking arbitration is ex facie time barred, and the disputes between the parties cannot be referred to arbitration in the facts of the case -- Application filed u/s 11 dismissed.

(Para 38-41)

F. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11  -- Limitation Act, 1963 (36 of 1963), Section 5 to 20 -- Arbitration of dispute -- Period of limitation for issuing notice of arbitration would not get extended by mere exchange of letters or mere settlement discussions, where a final bill is rejected by making deductions or otherwise -- Sections 5 to 20 of the Limitation Act do not exclude the time taken on account of settlement discussions -- There must be a clear notice invoking arbitration setting out the “particular dispute” (including claims / amounts) which must be received by the other party within a period of 3 years from the rejection of a final bill, failing which, the time bar would prevail.

(Para 39)

G. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11 -- Limitation Act, 1963 (36 of 1963), Section 43, Article 137 -- Limitation for Arbitration -- Period of limitation for filing an application u/s 11 would be governed by Article 137 of the First Schedule of the Limitation Act, 1963 -- Period of limitation will begin to run from the date when there is failure to appoint the arbitrator -- It has been suggested that the Parliament may consider amending Section 11 of the 1996 Act to provide a period of limitation for filing an application under this provision, which is in consonance with the object of expeditious disposal of arbitration proceedings; -- In rare and exceptional cases, where the claims are ex facie time-barred, and it is manifest that there is no subsisting dispute, the Court may refuse to make the reference.

(Para 40)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 – Limitation -- Condonation of delay beyond 120 days -- Application itself must be within time, and if not within a period of three months, must be accompanied with an application for condonation of delay, provided it is within a further period of 30 days -- Section 5 of the Limitation Act, 1963 does not apply -- Any delay beyond 120 days cannot be condoned. Himachal Techno Engineers’s case (2010) 12 SCC 210 relied.

(Para 8, 33)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 8, 16, 24, 37 – Arbitration agreement – Existence of – Proof of -- So far as section 37(1)(a) is concerned, where a party is referred to arbitration u/s 8, no appeal lies -- This is for the reason that the effect of such order is that the parties must go to arbitration, it being left to the ld. Arbitrator to decide preliminary points u/s 16 of the Act, which then become the subject matter of appeal u/s 37(2)(a) or the subject matter of grounds to set aside u/s 34 an arbitral award ultimately made, depending upon whether the preliminary points are accepted or rejected by the arbitrator -- In either case, i.e. whether the preliminary ground for moving the court u/s 8 is not made out either by not annexing the original arbitration agreement, or a duly certified copy, or on merits, the court finding that prima facie no valid agreement exists, an appeal lies under section 37(1)(a).

(Para 20)

C. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 8, 16, Section 37(2)(a) -- U/s 37(2)(a), where a preliminary ground of the arbitrator not having the jurisdiction to continue with the proceedings is made out, an appeal lies under the said provision, as such determination is final in nature as it brings the arbitral proceedings to an end -- However, if the converse is held by the learned arbitrator, then as the proceedings before the arbitrator are then to carry on, and the aforesaid decision on the preliminary ground is amenable to challenge u/s 34 after the award is made, no appeal is provided.

(Para 21)

D. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34, 27(1)(c) -- Dismissal of application for condonation of delay – Appeal – Maintainability of -- Appeal u/s 37(1)(c) of the Arbitration Act, 1996 would be maintainable against an order refusing to condone delay in filing an application u/s 34 of the Arbitration Act, 1996 to set aside an award.

(Para 37)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 12(5), 29A(6) – Appointment of Arbitrator – Controlling influence on party  – Effect of -- Appointment of the Principal Secretary, Government of Haryana as the nominee arbitrator of HARSAC which is a Nodal Agency of the Government of Haryana, would be invalid under Section 12(5) of the Arbitration and Conciliation Act, 1996 read with the Seventh Schedule --Section 12(5) read with the Seventh Schedule is a mandatory and non-derogable provision of the Act -- In exercise of power u/s 29A(6) of the Act, 1996 former judge of Supreme Court appointed as the substitute arbitrator.

(Para 17)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 7 -- Indian Contract Act, 1872 (9 of 1872), Section 19 – Indian Stamp Act, 1899 (2 of 1899), Section 3, 33, 35 – Arbitration agreement -- Voidable contract – Unstamped agreement – Effect on arbitration clause -- Held, the decision in SMS Tea Estates (2011) 14 SCC 66 does not lay down the correct position in law on two issues i.e. (i) that an arbitration agreement in an unstamped commercial contract cannot be acted upon, or is rendered un-enforceable in law; and (ii) that an arbitration agreement would be invalid where the contract or instrument is voidable at the option of a party, such as u/S. 19 of the Indian Contract Act, 1872. Held,

-- since the arbitration agreement is an independent agreement between the parties, and is not chargeable to payment of stamp duty, the non-payment of stamp duty on the commercial contract, would not invalidate the arbitration clause, or render it un-enforceable, since it has an independent existence of its own -- The view taken by the Court on the issue of separability of the arbitration clause on the registration of the substantive contract, ought to have been followed even with respect to the Stamp Act -- The non-payment of stamp duty on the substantive contract would not invalidate even the main contract -- It is a deficiency which is curable on the payment of the requisite Stamp Duty.

-- second issue in SMS Tea Estates that a voidable contract would not be arbitrable as it affects the validity of the arbitration agreement, is not the correct position in law -- The allegations made by a party that the substantive contract has been obtained by coercion, fraud, or misrepresentation has to be proved by leading evidence on the issue -- These issues can certainly be adjudicated through arbitration.

(Para 6.8, 6.9)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 7, 9 – Indian Stamp Act, 1899 (2 of 1899), Section 3, 33, 35 – Arbitration agreement -- Unstamped agreement – Effect of -- If an application for urgent interim reliefs is filed u/s 9 before the Court, and it is brought to the attention of the Court that the substantive contract is not duly stamped, the Court would grant ad-interim relief to safeguard the subject-matter of the arbitration -- However, the substantive contract would then be impounded, and the concerned party be directed to take the necessary steps for payment of the requisite stamp duty in accordance with the provisions of the relevant Stamp Act, within a time-bound period.

(Para 7)

C. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 7 -- Indian Contract Act, 1872 (9 of 1872), Section 2(i), (j), 19 – Arbitration agreement -- Voidable contract – Whether the fraudulent invocation of the Bank Guarantee is arbitrable? – In the case of voidable agreements, such disputes would be arbitrable, since the issue whether the consent was procured by coercion, fraud, or misrepresentation requires to be adjudicated upon by leading cogent evidence, which can very well be decided through arbitration -- Until it so proved and upheld as per Sections 2(i) and (j) of the Indian Contract Act, 1872 such an agreement would remain enforceable, and is not void -- Allegations of fraud with respect to the invocation of the Bank Guarantee are arbitrable, since it arises out of disputes between parties inter se, and is not in the realm of public law.

(Para 8, 8.1-8.17)

D. Constitution of India, Article 226, 227 -- Arbitration and Conciliation Act, 1996 (26 of 1996), Section 9, 37 -- Commercial Courts Act, 2015 (4 of 2016), Section 13(1A) – Maintainability of writ -- Statutory remedy of appeal available -- Writ Petition to challenge the Order passed by the Special Commercial Court / District Judge-I in Commercial Dispute was not maintainable, since a statutory remedy under the amended Section 37 of the Arbitration Act is available -- Section 37(1)(a) provides for an appeal to be filed against an Order refusing to refer the parties to arbitration -- Appeal would lie before the Commercial Appellate Division of the High Court under Section 13(1A) of the Commercial Courts Act, 2015.

(Para 9)

E. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 7 -- Indian Stamp Act, 1899 (2 of 1899), Section 3, 33, 35 – Non-payment of stamp duty – Effect on Arbitration agreement -- Finding in SMS Tea Estates, (2011) 14 SCC 66 and Garware that the non-payment of stamp duty on the commercial contract would invalidate even the arbitration agreement, and render it non-existent in law, and un-enforceable, is not the correct position in law – In view of the finding in paragraph 92 of the judgment in Vidya Drolia in Civil Appeal No.2402 of 2019 decided vide Judgment dated 14.12.2020 by a co-ordinate bench, which has affirmed the judgment in Garware (2019) 9 SCC 209, the aforesaid issue is required to be authoritatively settled by a Constitution bench -- Following issue requires to be authoritatively settled by a Constitution bench of five judges of Supreme Court:

“Whether the statutory bar contained in Section 35 of the Indian Stamp Act, 1899 applicable to instruments chargeable to Stamp Duty under Section 3 read with the Schedule to the Act, would also render the arbitration agreement contained in such an instrument, which is not chargeable to payment of stamp duty, as being non-existent, un-enforceable, or invalid, pending payment of stamp duty on the substantive contract / instrument ? ”

(Para 12)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 16, 34 – Constitution of India, Article 226, 227 – Writ jurisdiction -- Appointment of Sole Arbitrator – Jurisdiction of – challenge to -- Respondent No. 1 did not take legal recourse against the appointment of the sole arbitrator, and rather submitted themselves before the tribunal to adjudicate on the jurisdiction issue as well as on the merits -- In this situation, he has to endure the natural consequences of submitting themselves to the jurisdiction of the sole arbitrator, which can be challenged, through an application u/s 34 -- Award has already been passed during the pendency of this appeal, and the Respondent No. 1 challenge u/s 34 to the same -- Held, High Court erred in utilizing its discretionary power available under Articles 226 and 227 of the Constitution -- Order of the High Court set aside -- Respondent No. 1 is at liberty to raise any legally permissible objections regarding the jurisdictional question in the pending Section 34 proceedings.

(Para 22-26)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 16, 34 – Gujarat Public Works Contracts Disputes Arbitration Tribunal Act, 1992 (4 of 1992),  Section 2(k) -- Constitution of India, Article 226, 227 – Writ jurisdiction -- Contract – Interpretation of -- Contract between the parties indicates that it was for both manufacturing as well as supply of bricks -- Pertinent question therefore is whether the present contract, which is composite in nature, falls within the ambit of a works contract under Section 2(k) of the Gujarat Act -- Question requires contractual interpretation, and is a matter of evidence, especially when both parties have taken contradictory stands regarding this issue -- It is a settled law that the interpretation of contracts in such cases shall generally not be done in the writ jurisdiction -- Mere fact that the Gujarat Act might apply may not be sufficient for the writ courts to entertain the plea to challenge the ruling of the arbitrator u/s 16 of the Arbitration Act.

(Para 24)

A. Transfer of Property Act, 1882 (4 of 1882), Section 111, 114, 114A – Ejectment of lessee – Forfeiture for non-payment of rent -- U/s 114A of the TP Act a condition for issue of notice prior to filing suit of ejectment is provided so as to enable the lessee to remedy the breach – Held, same cannot be construed as a statutory protection nor as a hard and fast rule in all cases to waive the forfeiture -- It is a provision enabling exercise of equitable jurisdiction in appropriate cases as a matter of discretion.

(Para 15)

B. Transfer of Property Act, 1882 (4 of 1882), Section 111, 114, 114A – Arbitration and Conciliation Act, 1996 (26 of 1996) -- Ejectment of lessee -- Forfeiture for non-payment of rent – Arbitration jurisdiction -- If the special statutes do not apply to the premises/property and the lease/tenancy created thereunder as on the date when the cause of action arises to seek for eviction or such other relief and in such transaction if the parties are governed by an Arbitration Clause; the dispute between the parties is arbitrable and there shall be no impediment whatsoever to invoke the Arbitration Clause – It would be open for the Arbitrator to take note of Section 114, 114A of TP Act and pass appropriate award in the nature as a Court would have considered that aspect while exercising the discretion.

(Para 16, 18)

C. Arbitration and Conciliation Act, 1996 (26 of 1996) -- Protection of Rent Control legislation – Eviction of tenants – Arbitration jurisdiction – Insofar as eviction or tenancy relating to matters governed by special statutes where the tenant enjoys statutory protection against eviction whereunder the Court/Forum is specified and conferred jurisdiction under the statute alone can adjudicate such matters -- Hence in such cases the dispute is non-arbitrable.

(Para 17, 18)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 8 (Amended by Act, 2015) – Arbitration clause – Duty of judicial authority -- Post amendment, it is clear that the judicial authority before which an action is brought shall, if the other conditions of section 8 are met, refer the parties to arbitration unless it finds that prima facie, no valid arbitration agreement exists.

(Para 6)

B. Specific Relief Act, 1963 (47 of 1963), Section 31, 34 – Cancellation of deed -- action in personam/ in rem  -- When it comes to cancellation of a deed by an executant to the document, such person can approach the Court u/s 31, but when it comes to cancellation of a deed by a non-executant, the non-executant must approach the Court u/s 34 of the Specific Relief Act, 1963 -- Cancellation of the very same deed, therefore, by a non-executant would be an action in personam since a suit has to be filed u/s 34 -- However, cancellation of the same deed by an executant of the deed, being u/s 31, would somehow convert the suit into a suit being in rem.

(Para 25)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 9, 11 -- Appointment of Arbitration – Procedure agreed already -- Proceedings u/s 9 – Appeal from -- Suo-moto power of High Court for appointment -- When the parties have agreed upon the procedure for appointment of arbitrator, ignoring the same, in the appeal arising out of the proceedings u/s 9 of the Act, the High Court, was not right in suo motu appointing an arbitrator -- Impugned order is liable to be set aside.

(Para 8)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 48 – Foreign award – Enforceability of --  Remanding the matter – Power of -- Whether the award rendered in the appellate arbitration being a “foreign award” is liable to be enforced under the provisions of Section 48 of the Arbitration and Conciliation Act, 1996? – Held, despite being informed time and again to appear before the Tribunal and submit their response and evidence in support thereof, it is only after the arbitrator indicated that he was going to pass an award that the respondent’s attorneys woke up and started asking for time to present their response -- This too was granted by the learned arbitrator, by not only granting extension of time, but by extending this time even further -- Finally, when the legal submissions of 75 pages were sent even beyond the time that was granted, the learned Arbitrator took this into account and then passed his award -- This being the case, on facts Court find no fault whatsoever with the conduct of the arbitral proceedings -- An arbitrator’s refusal to adjourn the proceedings at the behest of one party cannot be said to be perverse, keeping in mind the object of speedy resolution of disputes of the Arbitration Act – Remanding the matter to the ICC Arbitrator to pass a fresh award is clearly outside the jurisdiction of an enforcing court u/s 48 of the 1996 Act -- Foreign award ordered to be enforced.

(Para 7, 8, 34-37)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 – Arbitration award – Setting aside of – It is settled position that a Court can set aside the award only on the grounds as provided in the Arbitration Act as interpreted by the Courts.

(Para 12)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 – Arbitration award – Setting aside of – It is settled law that, where two views are possible, the Court cannot interfere in the plausible view taken by the arbitrator supported by reasoning.

(Para 13)

C. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 – Indian Contract Act, 1872 (9 of 1872), Section 32,56,65 -- Arbitration proceedings -- Interpretation of contract – Contract was for drilling oil wells and auxiliary operations -- Prices of High Speed Diesel (“HSD”), one of the essential materials for carrying out the drilling operations, increased -- Appellant raised a claim that increase in the price of HSD, an essential component for carrying out the contract, for reimbursement – Arbitration Tribunal allowed the claim of the Appellant – Held, contract price was payable to the ‘contractor’ for full and proper performance of its contractual obligations -- Contract states that the rates, terms and conditions were to be in force until the completion or abandonment of the last Well being drilled – Contract was based on a fixed rate -- Party, before entering the tender process, entered the contract after mitigating the risk of such an increase -- There is no gainsaying that there will be price fluctuations which a prudent contractor would have taken into margin, while bidding in the tender -- Interpretation of the Arbitral Tribunal to expand the meaning of Clause 23 to include change in rate of HSD is not a possible interpretation of this contract.

(Para 3,4, 28-30)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 17 -- Code of Civil Procedure, 1908 (V of 1908), Order 21 Rule 22(1)(a) -- Arbitration award – Execution of – Notice to opposite parties – Requirement of -- Where an application for execution is made within two years from the date of decree (the interim award being an interlocutory decree and the award treated as a decree under the Arbitration Act), then a notice was not required to be issued to the person against whom execution was applied for and notice is necessary only upon the expiry of two years from the date of decree that such notice is required to be issued.

(Para 5)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 17 -- Gujarat Public Works Contracts Disputes Arbitration Tribunal Act, 1992 (4 of 1992), Section 3  -- Arbitration Tribunal – Interim relief – Power of -- Insofar as the powers vested in the Arbitral Tribunal in terms of the Section 17 of the A&C Act are concerned, such powers can be exercised by the Tribunal constituted under the Gujarat Act because there is no inconsistency in these two Acts as far as the grant of interim relief is concerned -- Power is already vested in the tribunal under the Gujarat Act and Section 17 of the A&C Act compliments these powers – Contractor is given liberty to approach Tribunal, if the Tribunal is approached within 2 months, the tribunal shall not dismiss the claim on the issue of limitation.

(Para 1,21,22)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 -- Jurisdiction of the Court -- Arbitral awards should not be interfered with in a casual and cavalier manner, unless the Court comes to a conclusion that the perversity of the award goes to the root of the matter without there being a possibility of alternative interpretation which may sustain the arbitral award.

--       Section 34 is different in its approach and cannot be equated with a normal appellate jurisdiction.

--       Courts should not interfere with an award merely because an alternative view on facts and interpretation of contract exists.

--       Courts need to be cautious and should defer to the view taken by the Arbitral Tribunal even if the reasoning provided in the award is implied unless such award portrays perversity unpardonable u/s 34 of the Arbitration Act.

(Para 26, 27)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 31(3), 34 – Arbitration proceedings – Elaborate judgment – Requirement of -- Arbitration proceedings are not per se comparable to judicial proceedings before the Court -- A party under Indian Arbitration Law can opt for an arbitration before any person, even those who do not have prior legal experience as well -- Mandate under Section 31(3) of the Arbitration Act is to have reasoning which is intelligible and adequate and, which can in appropriate cases be even implied by the Courts from a fair reading of the award and documents referred to thereunder, if the need be -- Aforesaid provision does not require an elaborate judgment to be passed by the arbitrators having regards to the speedy resolution of dispute.

(Para 35)

C. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 – Arbitration proceedings – Reasoned order – Elaboration  of -- Three characteristics of a reasoned order can be fathomed. They are: proper, intelligible and adequate.

--       If the reasoning in the order are improper, they reveal a flaw in the decision-making process. If the challenge to an award is based on impropriety or perversity in the reasoning, then it can be challenged strictly on the grounds provided u/s 34 of the Arbitration Act.

--       If the challenge to an award is based on the ground that the same is unintelligible, the same would be equivalent of providing no reasons at all.

--       Coming to the last aspect concerning the challenge on adequacy of reasons, the Court while exercising jurisdiction u/s 34 has to adjudicate the validity of such an award based on the degree of particularity of reasoning required having regard to the nature of issues falling for consideration. The degree of particularity cannot be stated in a precise manner as the same would depend on the complexity of the issue.

Even if the Court comes to a conclusion that there were gaps in the reasoning for the conclusions reached by the Tribunal, the Court needs to have regard to the documents submitted by the parties and the contentions raised before the Tribunal so that awards with inadequate reasons are not set aside in casual and cavalier manner -- Courts are required to be careful while distinguishing between inadequacy of reasons in an award and unintelligible awards.

(Para 36)

Family Courts Act, 1984 (66 of 1984), Section 6, 9, 12 -- Family Courts (Procedure) Rules, 1992 (Delhi), Rule 8(viii) – Code of Civil Procedure, 1908 (V of 1908), Section 89 – Arbitration and Conciliation Act, 1996 (26 of 1996), Section 75, 81 -- Delhi High Court Mediation and Conciliation Rules, 2004, Rule, 20 -- Custody of child -- Mediation / Conciliation – Confidentiality of – Requirement of – Paramount consideration ought to be to see what is in the best interest of the child -- Complete adherence to confidentiality would absolutely be correct in normal matters where the role of the court is purely of an adjudicator -- But such an approach may not essentially be conducive when the court is called upon and expected to discharge its role in the capacity as parens patriae and is concerned with the welfare of a child.

(Para 24-31)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11 (6) – Appointment of Arbitrator – Intention of Contract -- Clause 16.3 of agreement does not provide for the reference of any dispute that may arise between the parties to an Arbitrator -- Purpose of this Clause is to vest the Competent Officer and the Commissioner with supervisory control over the execution of work and administrative control over it from time to time and thus to prevent disputes -- Intention is not to provide for a forum for resolving disputes -- Thus, in the present circumstances no Arbitrator could have been appointed by the High Court u/s 11(6) of the Arbitration and Conciliation Act, 1996.

(Para 12, 24)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 16, 31 – Place/Seat of Arbitration -- Place of arbitration was to be agreed upon between the parties -- It had not been agreed upon; and in case of failure of agreement, the Arbitral Tribunal is required to determine the same taking into consideration the convenience of the parties -- It is also incumbent on the Arbitral Tribunal that the determination shall be clearly stated in the “form and contents of award” that is postulated in Article 31.

(Para 31)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 16, 31 – Objections u/s 34 of the Act -- Place/Seat of Arbitration – Determination of -- Word ‘determination’ requires a positive act to be done – Arbitrator held the meeting at Kuala Lumpur and signed the award – Held, that does not amount to determination -- Sittings at various places are relatable to venue -- It cannot be equated with the seat of arbitration or place of arbitration which has a different connotation – Courts in India have jurisdiction, High Court is requested to deal with the application preferred u/s 34 of the Act as expeditiously as possible.

 (Para 32-34)

C. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 16, 31 – Objections u/s 34 of the Act -- Place/Seat of Arbitration – Determination of -- Word ‘determination’ has to be contextually determined -- When a ‘place’ is agreed upon, it gets the status of seat which means the juridical seat -- Term ‘place’ and ‘seat’ are used interchangeably -- When only the term ‘place’ is stated or mentioned and no other condition is postulated, it is equivalent to ‘seat’ and that finalises the facet of jurisdiction -- But if a condition precedent is attached to the term ‘place’, the said condition has to be satisfied so that the place can become equivalent to seat.

(Para 33)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 -- Objections against the arbitral award – Limitation – Condonation of delay – Power of -- The words 'but not thereafter' in the proviso are of mandatory nature, and couched in the negative, and leave no room for doubt -- Proviso to Section 34 gives discretion to the court to condone the delay for a sufficient cause, but that discretion cannot be extended beyond the period of thirty days, which is made exclusively clear by use of the words 'but not thereafter'.

(Para 14)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 31(5), 34 (3) -- Objections against the arbitral award – Limitation – Starts from -- By cumulative reading of Section 34(3) and Section 31(5) of the Act, it is clear that the limitation period prescribed under Section 34(3) of the Act would commence only from the date of signed copy of the award delivered to the party making the application for setting it aside.

(Para 16)

C. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 31(5), 34 – Service of award to Head of family – Received the award wth the endorsement “For myself and on behalf of my family members” -- In interim MOU dated 29.06.1996, petitioner signed for self and as a power of attorney holder for his wife and his all sons and daughter-in-law –Petitioner, being the head of his family, was a person directly connected with and involved in the proceeding and was also in control of the proceeding -- Being head of the family, petitioner would have been the best person to understand and appreciate the arbitral award and take a decision as to whether an application u/s 34 of the Act was required to be filed or not -- In such facts and circumstances, service of arbitral award on petitioner amounts to service on the other appellant Nos.1(a) to 1(d) and respondent No.10 and they cannot plead non-compliance of Section 31(5) of the Act.

(Para 18-23)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 16, 34 – Plea of Jurisdiction – Objection of -- No bar to plea of jurisdiction being raised by way of an objection u/s 34 of the Act even if no such objection was raised u/s 16.

(Para 6)

B. State Law – Central Law -- Public policy of India refers to law in force in India whether State law or Central law -- Accordingly, observations to the contrary in Paragraphs 16 and 17 of the judgment in MSP Infrastructures Ltd. (2015) 13 SCC 713, overruled.

(Para 8,9)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34, 36, 42 -- Arbitration award – Execution as decree of civil court – Enforcement mechanism, which is akin to the enforcement of a decree but the award itself is not a decree of the civil court as no decree whatsoever is passed by the civil court -- It is the arbitral tribunal, which renders an award and the tribunal does not have the power of execution of a decree -- For the purposes of execution of a decree the award is to be enforced in the same manner as if it was a decree under the said Code.

(Para 15)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 32, 36, 42 – Arbitral award – Execution as decree of civil court – Territorial jurisdiction -- When an award is already made, of which execution is sought, the arbitral proceedings already stand terminated on the making of the final award -- Thus, it is not appreciated how Section 42 of the said Act, which deals with the jurisdiction issue in respect of arbitral proceedings, would have any relevance.

(Para 19)

C. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 32, 36, 42 – Arbitral award – Execution as decree of civil court – Territorial jurisdiction -- Enforcement of an award through its execution can be filed anywhere in the country where such decree can be executed and there is no requirement for obtaining a transfer of the decree from the Court, which would have jurisdiction over the arbitral proceedings.

(Para 22)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 2(c), 31(6), 32, 34 – Finding on limitation – Interim award -- Ld. Arbitrator has disposed of one matter between the parties i.e. the issue of limitation finally – The award is an interim award, which being an arbitral award, can be challenged separately and independently under Section 34 of the Act.

(Para 7, 14-16, 29)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 2(c), 16, 31(6), 32, 34 – Finding on limitation -- Interim award -- An award, which does not relate to the arbitral tribunal’s own jurisdiction u/s 16, does not have to follow the drill of Section 16(5) and (6) of the Act -- Parliament may consider amending Section 34 of the Act so as to consolidate all interim awards together with the final arbitral award, so that one challenge u/s 34 can be made after delivery of the final arbitral award -- Piecemeal challenges like piecemeal awards lead to unnecessary delay and additional expense.

(Para 29)

A. Code of Civil Procedure, 1908 (V of 1908), Section 47 -- Decree – Execution of -- Objection before Executing Court -- If the objections had been raised by the judgment debtor under Section 47 of the Code challenging the decree then it was necessary for the executing Court to deal with the objections and record its finding one way or other in accordance with law.

(Para 29)

B. Code of Civil Procedure, 1908 (V of 1908), Section 47 – Decree – Objections to -- Objection, if none had any merit whatsoever, they simply deserved rejection at the outset.

(Para 29)

C. Code of Civil Procedure, 1908 (V of 1908), Section 47 – Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 -- Arbitration award/Decree – Execution of -- Objection to -- All the objections ought to have been raised by the respondents before the Arbitrator or/and Additional District Judge under Section 34 of the Act but certainly none of them could be allowed to be raised in execution once the award became final and attained finality as decree of the Civil Court.

(Para 30)

D. Code of Civil Procedure, 1908 (V of 1908), Section 47 – Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 -- Arbitration award/Decree – Execution of -- Objection to -- Objections were on facts and pertained to the merits of the controversy, which stood decided by the Arbitrator resulting in passing of an award -- None of the objections were in relation to the jurisdiction of the Court affecting the root of the very passing of the decree -- If the executing Court had probed these objections then it would have travelled behind the decree, which was not permissible in law -- An inquiry into facts, which ought to have been done in a suit or in an appeal arising out of the suit or in proceedings under Section 34 of the Act, cannot be held in execution proceedings in relation to such award/decree.

(Para 31)

E. Code of Civil Procedure, 1908 (V of 1908), Section 47, Order 21 Rule 1,2 – Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 -- Arbitration award/Decree – Decreetal amount -- Payment of – Procedure of -- No amount was paid by the respondents to the appellant pursuant to the award/decree so as to enable the executing Court to record its full satisfaction in accordance with the provisions of Order 21 Rules 1 and 2 – Executing Court is directed to issue warrant for recovery of the entire awarded decretal amount.

 (Para 37-39)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 7, 11 -- Conducting agreement -- Arbitration clause – Delegation of Judicial function – Permissibility of -- Ld. Single Judge prima facie was of the view that the “conducting agreement” may be a lease of the immovable property and sent the matter to Registrar (Judicial), who shall determine whether the transaction is in the nature of lease or licence and stamp duty that is attracted -- Held, a judicial functioning has to be done in a judicial manner -- Duty of determination of an instrument or, to explicate, to determine when there is a contest a particular document to be of specific nature, the adjudication has to be done by the Judge after hearing the counsel for the parties -- It is a part of judicial function and hence, the same cannot be delegated.

 (Para 6-17)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34, 35 -- Two-tier arbitration – Permissibility of -- Whether a settlement of disputes or differences through a two-tier arbitration procedure as provided for in Clause 14 of the contract between the parties is permissible under the laws of India? – “final and binding” clause in Section 35 of the A&C Act does not mean final for all intents and purposes -- Finality is subject to any recourse that an aggrieved party might have under a statute or an agreement providing for arbitration in the second instance -- There is nothing in the A&C Act that prohibits the contracting parties from agreeing upon a second instance or appellate arbitration, either explicitly or implicitly – Held, arbitration clause in the agreement between the parties does not violate the fundamental or public policy of India by the parties agreeing to a second instance arbitration -- Question is answered in the affirmative.

(Para 34, 44-46)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 5, 34, 37 -- Code of Civil Procedure, 1908 (V of 1908), Order XLI Rule 22 -- Arbitration award – Appeal against order on objection to award -- Cross-objections – Maintainability of -- The 1996 Act is a complete Code and Section 5 in categorical terms along with other provisions, lead to a definite conclusion that no other provision can be attracted -- Thus, the application of CPC is not conceived of and, therefore, as a natural corollary, the cross-objection cannot be entertained.

(Para 27,28)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 5 -- Code of Civil Procedure, 1908 (V of 1908), Section 1 – Applicability of CPC -- Analysis made in ITI Ltd., (2002) 5 SCC 510 to the effect that merely because the 1996 Act does not provide CPC to be applicable, it should not be inferred that the Code is inapplicable seems to be incorrect, for the scheme of the 1996 Act clearly envisages otherwise -- View expressed in ITI Ltd., deserves to be re-considered by a larger Bench.

(Para 28, 29)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 8(1)(2) – Appointment of Arbitrator – Original/certified copy of arbitration agreement – Requirement of -- Section 8(2) has to be interpreted to mean that the court shall not consider any application filed by the party u/s 8(1) unless it is accompanied by original arbitration agreement or duly certified copy thereof -- Filing of the application without such original or certified copy, but bringing original arbitration agreement on record at the time when the Court is considering the application shall not entail rejection of the application under Section 8(2).

(Para 22)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 8(1)(2) – Appointment of Arbitrator – Plaintiffs admittedly are parties to the arbitration agreement – It does not lie in their mouth to contend that since one of the defendants whom they have impleaded was not party to the arbitration agreement, no reference can be made to the arbitrator.

(Para 26)

C. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 8(1)(2) – Appointment of Arbitrator – Submission that partnership being an unregistered partnership, no reference can be made to the arbitration – Held, when the partners and those who claim through partners agreed to get the dispute settled by arbitration, it is not open for the appellants to contend that partnership being unregistered partnership, the dispute cannot be referred.

(Para 28)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 12(5), Fifth Schedule – Appointment of Arbitrator – Disqualification of -- Mere existence of conditions, illustrations of which are furnished in the Fifth Schedule, does not necessarily result in the disqualification of a person being appointed as an arbitrator -- Sub-section (5), on the other hand, stipulates the conditions which render a person ineligible to be appointed as an arbitrator.

(Para 10)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 12(1)(5), Fifth Schedule, Seventh Schedule – Appointment of Arbitrator – Challenge to -- Facts to be disclosed under sub-section (1) of section 12 do not necessarily render a person ineligible to be appointed an arbitrator -- If the facts required to be disclosed under sub-section (1) also fall under any of the categories specified in the Seventh Schedule, he would be ineligible to be appointed as an arbitrator -- If, the facts disclosed under sub-section (1) do not fall under any of the categories specified in the Seventh Schedule, he would not be rendered ineligible per se -- Whether such facts ought to render him ineligible or not would then depend upon the facts of the case -- Some of the categories in the Fifth and the Seventh Schedules are the same -- In such cases, the person would be ineligible to be appointed an arbitrator in view of sub-section (5).

(Para 11)

C. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 12 – Appointment of Arbitrator – Former employee -- Chief Secretary of a State is the head of the administrative machinery of the State, has control over the administrative offices of the State and is the main link between the State and the Centre -- Arbitrator was bound to disclose was that she is a former Chief Secretary of the State of Haryana -- This does not render her ineligible to be appointed an arbitrator -- Bar is against a person who is, at the time of appointment, an employee, consultant or advisor of the party concerned -- There is no bar against a former employee, consultant or advisor -- Contention that former employees are disqualified from being appointed because they receive pension and post-retiral benefits from the Government is irrelevant.

 (Para 12, 18, 19)

D. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11, 12 – Appointment of Arbitrator – Disclosure of past engagement -- It is not even necessary for a person, who is approached in connection with his possible appointment as an arbitrator, to disclose in writing a past employment or engagement as an employee, consultant or advisor unless such employment or engagement is likely to give rise to justifiable doubts as to his independence or impartiality.

(Para 23)

E. Arbitration and Conciliation Act, 1996 (26 of 196), Section 12(1), Sixth Schedule – Appointment of Arbitrator – Non-disclosure of past engagement – Contention that the form of the certificate prescribed in the Sixth Schedule establishes that the issuance of the certificate is a condition precedent to the acceptance of an appointment as an arbitrator under section 12(1) – Held, the form is in the affirmative and not in the negative -- If, according to the arbitrator, there are no circumstances which are likely to give rise to justifiable doubts about his independence or impartiality or which are likely to affect his ability to devote sufficient time to the arbitration, there is no question of his issuing the certificate in terms of the Sixth Schedule -- Sixth Schedule does not require a certificate in the negative stating that there are no circumstances which are likely to give rise to justifiable doubts about the independence or impartiality of the arbitrator.

(Para 24)

F. Arbitration and Conciliation Act, 1996 (26 of 196), Section 12, Fifth Schedule, Sixth Schedule – Appointment of Arbitrator – Disclosure of past engagement -- Disclosure would be necessary to all the parties, however, the disclosure to the other parties is necessary only from the time of his appointment as is evident from sub-section (2) of section 12 -- Mere nomination of a person as an arbitrator does not lead to or result in his appointment as an arbitrator -- Appointment is complete only upon his accepting it -- If he is inclined to accept his appointment and circumstances stipulated in section 12(1) read with the Fifth Schedule exist, he must make the disclosure as per the format provided in the Sixth  Schedule -- A view to the contrary would render sub-section (2) otiose -- If the disclosure was to be made at the stage contemplated in sub-section (1), it would have been unnecessary to enact sub-section (2).

(Para 27,28)

G. Arbitration and Conciliation Act, 1996 (26 of 196), Section 11, 12 – Appointment of Arbitrator – Disclosure of prior engagement -- It would be an implied term of every appointment by the High Court u/s 11 that a disclosure is to be made -- In other words, the appointment made by the High Court is subject to and, therefore, becomes effective upon the disclosure being made and further subject to any challenge to the appointment.

(Para 31, 32)

H. Arbitration and Conciliation Act, 1996 (26 of 196), Section 11, 13, 16 -- Appointment of Arbitrator – Challenge to – Remedy of -- If it is found subsequently that the arbitrator was ineligible to be appointed for any reason, the petitioner’s remedy to challenge the appointment would be under section 13 or under section 16 and not under section 11.

(Para 14)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 8 – Arbitration clause – Allegation of fraud – Jurisdiction of civil Court -- Mere allegation of fraud simplicitor may not be a ground to nullify the effect of arbitration agreement between the parties -- It is only in those cases where the Court, while dealing with Section 8 of the Act, finds that there are very serious allegations of fraud which make a virtual case of criminal offence or where allegations of fraud are so complicated that it becomes absolutely essential that such complex issues can be decided only by civil court on the appreciation of the voluminous evidence that needs to be produced, the Court can sidetrack the agreement by dismissing application u/s 8 and proceed with the suit on merits.

(Para 20)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 8 – Arbitration clause – Allegation of fraud – Jurisdiction of civil Court -- Civil Court proceed with the suit on merits, where there are serious allegations of forgery/fabrication of documents in support of the plea of fraud or where fraud is alleged against the arbitration provision itself or is of such a nature that permeates the entire contract, including the agreement to arbitrate, meaning thereby in those cases where fraud goes to the validity of the contract itself of the entire contract which contains the arbitration clause or the validity of the arbitration clause itself.

(Para 20)

C. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 8 – Arbitration clause – Allegation of fraud – Jurisdiction of civil Court -- Where there are simple allegations of fraud touching upon the internal affairs of the party inter se and it has no implication in the public domain, the arbitration clause need not be avoided and the parties can be relegated to arbitration.

(Para 20)

D. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 8 – Arbitration clause – Allegation of fraud – Jurisdiction of civil Court -- In an application u/s 8 of the Act, the focus of the Court has to be on the question as to whether jurisdiction of the Court has been ousted instead of focusing on the issue as to whether the Court has jurisdiction or not -- It has to be kept in mind that insofar as the statutory scheme of the Act is concerned, it does not specifically exclude any category of cases as non-arbitrable -- Such categories of non-arbitrable subjects are carved out by the Courts, keeping in mind the principle of common law that certain disputes which are of public nature, etc. are not capable of adjudication and settlement by arbitration and for resolution of such disputes, Courts, i.e. public fora, are better suited than a private forum of arbitration.

(Para 20)

E. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 8 – Arbitration clause – Allegation of fraud – Jurisdiction of civil Court – Inquiry by Court -- The inquiry of the Court, while dealing with an application u/s 8 of the Act, should be viz. whether the nature of dispute is such that it cannot be referred to arbitration, even if there is an arbitration agreement between the parties -- When the case of fraud is set up by one of the parties and on that basis that party wants to wriggle out of that arbitration agreement, a strict and meticulous inquiry into the allegations of fraud is needed and only when the Court is satisfied that the allegations are of serious and complicated nature that it would be more appropriate for the Court to deal with the subject matter rather than relegating the parties to arbitration, then alone such an application u/s 8 should be rejected.

(Para 20)

F. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 8 – Arbitration clause – Allegation of fraud – Jurisdiction of civil Court -- Only allegation of fraud that is levelled is that the appellant had signed and issued a cheque of Rs. 10,00,050/- dated 17.06.2010 of 'Hotel Arunagiri' in favour of his son without the knowledge and consent of the other partners i.e. the respondents -- It is a mere matter of accounts which can be looked into and found out even by the arbitrator -- It does not involve any complex issue.

(Para 21)

A. Arbitration Act, 1940 (10 of 1940), Section 30, 33 – Arbitral award – Challenge to -- Award can be set aside only on the grounds specified in sub-clause (a) (b) and (c) of Section 30 of 1940 Act and on no other grounds -- Grounds such as inadequacy of reasons in support of an award, error committed by the arbitrator on facts, alternate or/and more plausible view could be taken then what is taken by the arbitrator, improper appreciation of evidence done by the arbitrator in recording any finding etc. are not the grounds on which any award much less a reasoned award can be set aside.

(Para 31, 32)

B. Arbitration Act, 1940 (10 of 1940), Section 30, 33 -- Arbitral award – Challenge to -- Appellate Court jurisdiction – High Court virtually sat as an appellate Court as if it was hearing the appeal arising out of the award and proceeded to probe into all factual issues arising in the case – High Court gone to the extent of permitting the State’s counsel to file some documents in appeal and then went on to examine the case on facts and eventually held that the arbitrator has travelled beyond clauses of the agreement and hence committed legal misconduct requiring the High Court to set aside the award – Held, such approach is wholly against the law.

(i)    In the first place, the High Court did not apply the law laid down by this Court while deciding the appeal and hence committed a jurisdictional error;

(ii)   Secondly, the High Court acted like an appellate Court and virtually treated as if the appeal arose directly against the award and then proceeded to examine all factual findings of the arbitrator by appreciating the evidence, it was not permissible in law;

(iii)  Thirdly, the High Court should have confined its inquiry to find out as to whether any legal misconduct was committed by the arbitrator and, if so, how and in what manner, it was, however, not done;

(iv)   Fourthly, the High Court went into the factual question by referring to clause of the agreement for holding that the arbitrator passed an award contrary to clause and thereby traveled beyond the terms of agreement which constituted a legal misconduct on his part -- In the absence of any finding recorded by the arbitrator and the Trial Court, such issue could not have been gone into for the first time in appeal by the High Court -- Being a question of fact, the same could not be examined in appeal.’

(v)    Fifthly, Clause 26 had nothing to do with the claims filed by the appellants -- Finding of the High Court that the award is rendered bad because it was passed in contravention of clause 26 of the agreement is, therefore, not legally sustainable in law;

(vi)   Sixthly, the High Court further failed to see that there was no error apparent on the face of the record in the findings recorded by the arbitrator;

(vii)  Seventhly, the High Court also failed to see that the Trial Court had elaborately gone into all the factual issues and rightly did not find any substance in the objections raised by the respondent; and

(viii) lastly, the award being a reasoned one, the reasoning of the arbitrator could not be said to be perverse to the extent that no man with ordinary prudence could take such view and nor any finding of the arbitrator was against any provision of law or in contravention of any of the clauses of the agreement so as to constitute a case of legal misconduct on the part of the arbitrator within the meaning of Section 30 of the Act for setting aside an award.

(Para 33-37)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 2(1)(e)(ii), 9, 37 – Letters Patent Appeal Rules, Clause 10 – Arbitration proceedings -- Interim order – L.P.A. – Maintainability of – An order passed by the learned Single Judge under Section 9 would be appealable under Section 37(1)(b) but not under clause 10 of the Letters Patent – LPA is not maintainable.

 (Para 2-7, 32-41)

B. Appeal – Remedy of – Interpretation of Statue -- Rules of interpretation of a statute would command that language of the statute be respected to be read as it is without injecting any other meaning to read non-existent words into it -- Appeal is creation of a statute and if not otherwise provided in the enactment, the remedy has to be treated to be an exclusion.

(Para 25-27)

C. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 1 – Object of the Act -- Interpretation of statute -- Arbitration and Conciliation Act, 1996 is a special statute enacted to keep pace with the UNCITRAL Model providing expeditious settlement -- Therefore, the objective of the Act also has to be kept in mind while placing an interpretation on its provisions.

(Para 28)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 34 -- Foreign arbitration award – Execution of -- Objection u/s 34 of Indian Arbitration Act -- Where the parties choose a juridical seat of Arbitration outside India and provide that the law which governs Arbitration will be a law other than Indian law, part I of the Indian Arbitration Act would not have any application and, therefore, the award debtor would not be entitled to challenge the award by raising objections u/s 34 before a Court in India -- Proceedings u/s 34, which occurs in Part I, are liable to be dismissed as untenable -- Judgment of the High Court enforcing the Foreign Award under Part II of the Arbitration Act is correct and liable to be upheld.

(Para 28-34)

Arbitration and Conciliation Act, 1996 (26 of 1996), Section 11 – Appointment of Arbitrator – Discussion on merit - Jurisdiction of Court -- Jurisdiction of Court u/s 11 of the Act is limited and confine to examine as to whether there is an arbitration agreement between the contracting parties and, if so, whether any dispute has arisen between them out of such agreement which may call for appointment of arbitrator to decide such disputes -- A discussion much less with such elaboration on factual issues was wholly uncalled for and should not have been made -- Indeed, it was not necessary for the learned Single Judge to have recorded any finding on merits while making reference to the arbitrator u/s 11 of the Act.

(Para 12-14)

A. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 33(4) – Review of award – Power of -- It is a trite law that a decree should be specific and well defined with sufficient precision to be executable since an award becomes a decree in arbitration law -- Section 33 (4) is a request jurisdiction to cure a material thing which has been left out or omitted by the Arbitrator in the award and the jurisdiction conferred by section 33 is to be exercised in the manner provided and is not plenary to the disputes referred to arbitration.

(Para 45)

B. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 33(4) – Review of award – Power of -- Original award was reviewed by the Arbitrator which was improper exercise of jurisdiction -- Section 33(4) of the Act makes provisions for re-visiting the award by the Arbitrator if there is no agreement to the contrary, then an aggrieved party with notice to the opposite party may request, within 30 days from the receipt of the award to make an additional award as to claims presented in the arbitral proceedings but omitted from the award -- Arbitral tribunal would examine such a request under section 33 (5) of the Act and if it is found justified it may proceed to make an additional award within 60 days of such request -- Whereas the object of section 34 (4) is to eliminate the grounds for setting aside the arbitral award.

(Para 45)

C. Arbitration and Conciliation Act, 1996 (26 of 1996), Section 33(4), 34(4) – Arbitration award -- Summary dismissal of appeal -- Review of -- Court do not think the ends of justice were served in summary dismissal of the appeals on grounds of delay, laches and limitation -- Due regard should have been had for an effective consideration of the issues involved after hearing counsel at length by noticing and deciding the issues raised by both the parties -- Hence the order/s, in the opinion of the court, on careful reconsideration deserves to be reviewed -- Cases stand remitted to the Arbitrator for eliminating the grounds of challenge as per mandate of section 34 (4) of the Act, 1996.

(Para 46,47)

Arbitration Act, 1940 (10 of 1940), Section 8 -- Arbitration and Conciliation Act, 1996 (26 of 1996), Section 15(2) -- Code of Civil Procedure Code, 1908 (V of 1908), Section 89 – Appointment of arbitrator – Substitute Arbitrator -- Section 89 of the CPC specifically provides that a Court hearing a suit may formulate terms of settlement between the parties and may either settle the same or refer the same for settlement by conciliation, judicial settlement, mediation or arbitration – Following the mandate of Section 89, the High Court disposed of the suit between the parties by recording the settlement between the parties in clauses 1 to 7 of the consent terms and by referring the remaining disputes to arbitration -- Therefore it is clear that it is the High Court that was the appointing authority which had in fact appointed arbitrator in terms of clause 8 of the consent terms – Lateron High Court correctly appointed another independent retired Judge as substitute arbitrator in terms of Section 15(2) of the Arbitration Act, 1996 -- Object of speedy resolution of disputes by arbitration would best be sub-served by a substitute arbitrator continuing at the point at which the earlier arbitrator has left off.

(Para 21,22)