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Vishal Engineering Works v/s The Chief Engineer (Electrical) MTNL & Another

    Arbitration Petition No.106 of 2012

    Decided On, 24 February 2012

    At, High Court of Judicature at Bombay


    For the Petitioner: Ramesh Ramamurthy, Advocate. For the Respondents: Ms. S.I. Joshi i/b S.I. Shah & Co., Advocates.

Judgment Text


Heard finally.

1. The petitioner has invoked section 34 of the Arbitration and Conciliation Act (for short 'Arbitration Act') against order dated 7.9.2011 passed by the arbitrator whereby the claims of the petitioner-original claimants have been dismissed and so also the respondents counter claim by observing that 'As per section 25 of the Arbitration and Conciliation Act, 1996, the claimant has defaulted to submit the statement of claims within the time frame and various extension granted and thus forfeited his right.'

2. Section 23 to 25 of the Arbitration Act reads thus:

'23. Statements of claim and defence.-

(1) Within the period of time agreed upon by the parties or determined by the arbitral tribunal, the claimant shall state the facts supporting his claim, the points at issue and the relief or remedy sought, and the respondent shall state his defence in respect of these particulars, unless the parties have otherwise agreed as to the required elements of those statements.

(2) The parties may submit with their statements all documents they consider to be relevant or may add a reference to the documents or other evidence they will submit.

(3) Unless otherwise agreed by the parties, either party may amend or supplement his claim or defence during the course of the arbitral proceedings, unless the arbitral tribunal considers it inappropriate to allow the amendment or supplement having regard to the delay in making it.

24. Hearings and written proceedings.- (1) Unless otherwise agreed by the parties, the arbitral tribunal shall decide whether to hold oral hearings for the presentation of evidence or for oral argument, or whether the proceedings shall be conducted on the basis of documents an other materials;

Provided that the arbitral tribunal shall hold hearings, at an appropriate stage of the proceedings, on a request by a party, unless the parties have agreed that no oral hearing shall be held.

(2) The parties shall be given sufficient advance notice of any hearing and of any meeting of the arbitral tribunal for the purposes of inspection of documents, goods or other property.

(3) All statements, documents or other information supplied to, or applications made to, the arbitral tribunal by one party shall be communicated to the other party, and any expert report or evidentiary document on which the arbitral tribunal may rely in making its decision shall be communicated to the parties.

25. Default of a party.- Unless otherwise agreed by the parties, where, without showing sufficient cause,----

(a) the claimant fails to communicate his statement of claim in accordance with sub-section (1) of section 23, the arbitral tribunal shall terminate the proceedings;

(b) the respondent fails to communicate his statement of defence in accordance with sub-section (1) of section 23, the arbitral tribunal shall continue the proceedings without treating that failure in itself as an admission of the allegations by the claimant.

(c) a party fails to appear at an oral hearing or to produce documentary evidence, the arbitral tribunal may continue the proceedings and make the arbitral award on the evidence before it.

3. Admittedly, for whatever may be reason, though after sometime the petitioner has filed so called claims, firstly, on 6.10.2010. The reference was made to the written statement dated 16.11.2010 which was admittedly filed by the petitioner before the authority of respondent no.1. As directed the statement of claims was filed on 1st January, 2011. The respondents also filed his counter claim on 11th August, 2011. The arbitrator in my view ought not to have rejected the claim of the petitioner by holding that there is default committed by the petitioner for not filing statement of claims, though directed to file the same from time to time.

4. The arbitration clause no where provides what should be length or what are necessary documents to be filed by the claimant along with statement of claims and/or with the defence. The basic procedure of the Civil Procedure Code as well as the Evidence Act even if we take note of, the provisions of section 19 of the Arbitration Act just cannot be overlooked. The arbitral tribunal is not bound by technicalities of the Civil Procedure Code as well as the Evidence Act and/or pleadings, yet there can’t be a dispute that for proper adjudication of the matter, the party needs to file the pleadings and supporting material/evidence if any. But to dismiss the case for default of the parties as there was no detail pleadings filed on record is incorrect. It is necessary for the arbitrator to give full hearing and opportunity apart from fair and equal treatment to both parties.

5. It is not the case that the arbitrator has dismissed the case for want of pleadings and/or documents and/or evidence. The arbitrator has dismissed the case by treating the same as default, as contemplated under section 25 of the Act by holding that the petitioner failed to file statement of claims in accordance with subsection (1) of section 23 of the Act. As noted even by the arbitrator that the petitioner did file statement of claims and further clarification which is also pa

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rt of record, therefore, requirement was to adjudicate the matter, to hear the parties and pass appropriate order. Even otherwise in the interest of justice I am inclined to set aside this order/award dated 7.9.2011, solely on this ground in the interest of justice. 6. Resultantly, the following order is passed: The order dated 7.9.2011 is quashed and set aside. The matter is remanded back to the arbitrator to re-consider the claims as well as counter claims of both the parties by giving an opportunity to both the parties. All points are kept open. No order as to costs.