September 5, 2018:
Delhi High Court has expounded that,"Terms of an arbitration agreement, which is in writing as per the Arbitration and Conciliation Act, 1996, cannot be substituted by any oral demand or agreement".
HC Judge, Justice Prathiba M Singh was hearing Section 34 challenge to an Arbitral Award passed by a three-member tribunal for being against mandate of Arbitration Agreement.
Delhi HC enunciated that,“The proverb, “better safe than sorry”, cannot be of universal application as the facts in the present case would show".
Bench stated that,"The safe procedure for parties to an arbitration agreement is to actually adhere to the stipulation in the arbitration clause and not attempt anything which the parties may perceive to be safer".
Justice Pratibha Singh further added that, “It is not possible that Respondent decided to adopt a fair attitude by appointing a three-member tribunal, however, if a three-member tribunal had to be appointed, then the same ought to have been done with the consent of the Petitioner and in accordance with the provisions of the Act.”
Petitioner, Mother Boon Foods Pvt Ltd, had entered into an agreement with Respondent, Mindscape One Marketing Pvt Ltd, to manufacture and package pieces of bread as per the requirements and specifications of the Respondent.
Contract was terminated afterwards due to certain disputes between the parties, which were referred to an Arbitral Tribunal in accordance to the Agreement’s Arbitration Clause.
Although Arbitration clause stated appointment of a sole arbitrator by Respondent, a three-member tribunal was constituted by it.
But, the Petitioner chose not to participate in the arbitration proceedings. He directly filed petition in HC against the Award thus passed by Tribunal.
High Court Bench proceeded to set aside the Award for not being in accordance with Arbitration Agreement between Disputed Parties.
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