Bombay High Court

Iqbal Trading Company vs The Union Of India And Ors on 10 November, 2025

   2025:BHC-AS:47439


                                                                                            J-F-ARA.27.2012.doc




                                      IN THE HIGH COURT OF JUDICATURE AT BOMBAY

                                               CIVIL APPELLATE JURISDICTION

                                            ARBITRATION APPEAL NO.27 OF 2012

                       Iqbal Trading Company                                      ...Appellant
                            Versus
                       The Union of India & Ors.                                  ...Respondents


                            Mr. S.K. Halwasia a/w. Ms. S.S. Halwasia and Mr. Keshav
                            Thakur i/b. Halwasia and Co., Advocates for the Appellant.
                            Mr. Mohamedali M. Chunawala a/w. P.S. Gujar, Advocates for
                            Respondents.


                                CORAM                          : SOMASEKHAR SUNDARESAN, J.

                                RESERVED ON                    : May 6, 2025

                                PRONOUNCED ON                  : November 10, 2025


                       JUDGEMENT:

Context and Factual Background:

1. This is an appeal filed under Section 37 of the Arbitration and

Conciliation Act, 1996 ("1996 Act") challenging an order dated October

21, 2011 ("Impugned Order") passed by a Learned District Judge, Pune

Digitally signed by AARTI

GAJANAN PALKAR PALKAR Date:

2025.11.10 November 10, 2025 12:00:07 Aarti Palkar +0530

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refusing to exercise jurisdiction under Section 34 of the Act in relation

to an arbitral award dated January 16, 1998 ("Arbitral Award").

2. The Impugned Order records the opinion of the Learned

District Judge that the arbitration proceedings that led to the Arbitral

Award is governed by the Arbitration Act, 1940 (" 1940 Act") and not the

1996 Act. The Impugned Order also returns a finding that the challenge

to the Arbitral Award was hopelessly barred by limitation. Applying the

standards applicable under the 1940 Act, the Impugned Order also

emphatically upholds the Arbitral Award.

3. A brief overview of the factual matrix for purposes of

adjudicating this Appeal would be necessary, and is summarised below:-

a) The Appellant, Iqbal Trading Company ("Iqbal") is

said to have been a registered supplier of meat with the armed

forces for 15 years. The Respondents are essentially, the

Government of India and various authorities relevant for

procurement of meat for the armed forces and for

convenience, collectively referred to as " GOI" - for all

practical purposes, Respondent No. 5, the Commanding

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Officer, Supply Depot ASC, Khadki, Pune is the decision

maker on behalf of GOI while Respondent No. 6 is a Lt.

Colonel who was the arbitrator in the proceedings;

b) In December 1994, GOI floated a tender inviting

bids for supply of meat, fowl, eggs and fish for the period

between April 1, 1995 and March 31, 1996 ("Supply Period");

c) Iqbal filed its bid for supply of meat of sheep and

goats with varying prices for direct stores delivery (Rs. 2,799

for 100 kg); for 'meat on hoof' (Rs. 1,000 for 100 kg); and for

per-animal skin (Rs. 25), which was accepted by GOI;

d) While the parties did not execute a separate formal

agreement, Iqbal had executed various documentation in the

course of making its bid, and indeed took various steps

pursuant to its selection. These included paying over a

security deposit of Rs. 2.20 lakhs ("Security Deposit"); supply

of meat until May 28, 1995 (after which, it sought to be

excused from supply on the premise of meat not being

available in scale in the market and prices also having

doubled); and raising of invoices at the rate contracted for the

period in which supplies were made;

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e) Eventually on June 3, 1995, Iqbal wrote to GOI

stating that it would not be possible to supply meat at the

contracted rate;

f) This led to the GOI issuing a show cause notice

dated July 1, 1995 and a letter dated August 20, 1995 for

forfeiture of the Security Deposit;

g) GOI did not desire to let the forfeiture be the sole

sanction against Iqbal. It was desirous of making Iqbal pay

for all the damages incurred by it owing to his failure to

supply. Therefore, it pursued a claim in arbitration. Towards

this end, on April 4, 1996, GOI appointed the arbitrator, an

officer ranked as Lt. Colonel. The Learned Arbitral Tribunal

entered upon reference on April 8, 1996;

h) Meanwhile, before the Learned Arbitral Tribunal

was appointed, the 1996 Act had come into force with effect

from January 25, 1996;

i) The GOI's claim in the arbitration was for a sum of

Rs. ~35.42 lakhs, ostensibly and primarily based on the value

of meat procured from the market upon the failure on Iqbal's

part to supply meat, valued at Rs. 33.22 lakhs;

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j) On December 7, 1996, the Learned Arbitral

Tribunal dealt with various requests for information and

material on which the claim is based. Many requests were

rejected;

k) Iqbal took a stance that a formal contract in the

name of the President of India had not been executed and a

mere cyclostyled acceptance of the bid was the basis of the

supplies made, and there was no formal -executed arbitration

agreement;

l) Iqbal filed a suit in the local district court and

obtained a status quo order which is said to have been vacated

on December 28, 1997 "because of Advocate's mistake";

m) Eventually, the Arbitral Award was passed on

January 16, 1998, purportedly under the 1940 Act;

n) GOI filed Civil Suit No. 231 of 1998 (" Suit 231")

seeking declaration of the Arbitral Award as a decree of the

Court, as required under the 1940 Act. Iqbal filed

Miscellaneous Application No. 383 of 1998 (" MA 383")

challenging the Arbitral Award;

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o) On August 29, 2005, seven years later, the Civil

Judge, Senior Division, Pune passed a judgement holding that

the 1940 Act had no application and returned Iqbal's MA 383,

giving Iqbal liberty for 30 days to file an appropriate challenge

under Section 34 of the 1996 Act before the District Court

("Liberty Order");

p) On September 26, 2005 (i.e. within the period of 30

days for which liberty had been granted) , Iqbal filed MA 383

which was assigned a number as Miscellaneous Application

No. 927 of 2005 ("Section 34 Application");

q) Eventually, on October 21, 2011, another six years

later, the Impugned Order was passed holding all over again,

that the Arbitral Award was in fact governed by the 1940 Act.

The Section 34 Application was held to be hopelessly barred

by limitation. The Section 34 Application was dealt with on

merits as if it were an application under the 1940 Act and

emphatic findings were returned holding that the arbitration

agreement was in existence, and that the grounds for setting

aside the Arbitral Award under the 1940 Act had not been

attracted;

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r) On September 28, 2012, the Impugned Order was

stayed by a Learned Single Judge of this Court. Since then,

the Appeal was stood over from time to time until it was taken

up for final hearing and disposal with judgement being

reserved on May 6, 2025.

Contentions of the Parties:

4. I have heard at length, Mr. S.K. Halwasia, Learned Advocate

on behalf of Iqbal and Mr. Mohamedali M. Chunawala, Learned

Advocate on behalf of GOI. I have examined the material on record with

the assistance of their verbal submissions and their copious written

notes on submissions.

5. Mr. Halwasia would submit on behalf of Iqbal, invoking

Article 299 of the Constitution of India, that the requirement for a

formal validly executed contract in the name of the President of India is

necessary to bring into existence a contract with the GOI, which is

absent in the instant case. He would submit that a suit was filed by

Iqbal because of the absence of an arbitration agreement and indeed, a

status quo order had also been passed. However, owing to the lapse on

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the part of the advocate, the status quo order came to be vacated, and

forthwith, the Arbitral Award was passed.

6. Mr. Halwasia demanded and obtained inspection of the

original contracts relied upon by the GOI, in the course of the

proceedings in this Appeal.

7. Mr. Halwasia would submit that after the Arbitral Award was

made, both parties, bona fide, pursued their respective proceedings

under the 1940 Act since the Arbitral Award purported to have been

made under that legislation. This was squarely dealt with in the Liberty

Order which dismissed Suit 231 as not being covered by the 1940 Act,

and returned MA 383 for presentation within 30 days, under Section 34

of the 1996 Act. The Section 34 Application was indeed filed within the

period of 30 days in terms of the liberty granted. Therefore, he would

submit, it is untenable for the Impugned Order to contain a finding that

the Section 34 Application is barred by limitation and that too on the

premise that the 1996 would not apply, when the Liberty Order had

attained finality.

8. Mr. Halwasia would submit that presenting officer on behalf

of GOI was another Lt. Colonel who was senior to the arbitrator and

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from the same department, which has vitiated objective and judicial

adjudication of the arbitral proceedings. That apart, he would submit

that the core evidence on which GOI's claim would have been based was

simply not shared with Iqbal, resulting in a gross violation of basic

principles of natural justice, thereby vitiating the arbitral proceedings.

9. The Impugned Order, Mr. Halwasia would submit, is

diametrically contrary to the Liberty Order and inexplicably brings back

the application of the 1940 Act and yet holds that Iqbal was hopelessly

barred by limitation, without any explanation for wishing away the

liberty granted in the Liberty Order and the timely filing of the Section

34 Application within the time given.

10. Mr. Chunawala, would submit on behalf of the GOI that the

contention of non-existence of a written contract is untenable inasmuch

as the very conduct of Iqbal by participating in the tender and providing

all the documentation; providing the Security Deposit; supplying meat

until it was unilaterally stopped; and raising of invoices, were all

indicative of the parties having executed the contract. Indeed, Mr.

Chunawala also ensured that given the efflux of time, not only an

inspection of the original files in the records of the GOI was provided to

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Mr. Halwasia but also copies to show execution on behalf of Iqbal were

also shared.

11. Mr. Chunawala would defend the Impugned Order by

contending that indeed the 1940 Act would apply since the contract had

been executed before the 1996 Act and the cause of action i.e. the failure

to supply meat, took place in 1995 well before the 1996 Act came into

existence. He would also defend the Impugned Order by contending

that indeed the Section 34 of the Act is barred by limitation and that

there is no scope for showing any "sufficient cause" under the

Limitation Act, 1963 for purposes of Section 34 of the 1996 Act. Once it

is found that the challenge is barred by limitation, he would submit, it is

not even necessary for this Court to enter upon a discussion on merits.

ANALYSIS AND FINDINGS:

12. Having examined the material on record, in my opinion it

would be important to analyse specific facets of the matter to return my

findings on the status and legal validity of the Impugned Order and the

Arbitral Award.

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1996 Act to Apply:

13. At the threshold, it is noteworthy that not only would the 1996

Act apply, but also the contention that the Section 34 Application could

not have been filed, was untenable. The Liberty Order had attained

finality. At the threshold, in my opinion, the Liberty Order was validly

passed and declared the law accurately, namely, that the GOI was wrong

in its contention that the 1940 Act would apply.

14. Not only was Suit 231 held to be not maintainable but also MA

383 was returned and allowed to be filed as an application under

Section 34 of the Act within 30 days. In other words, evidently, the time

spent in consideration and disposal of Suit 231 and MA 383 was a bona

fide pursuit of remedies, primarily because it was the GOI's contention

that the 1940 Act would apply, with the GOI-appointed Learned Arbitral

Tribunal having purported to have passed the award under the 1940

Act. The GOI did not challenge the Liberty Order. It suited the GOI to

proceed on the basis that under the 1996 Act, there was no longer any

need for a Court's endorsement of an arbitral award. Yet, GOI seeks to

defend the Impugned Order that holds that the 1940 Act applies.

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15. Section 85(2)(a) of the 1996 Act makes it abundantly clear

that the 1940 Act would not apply to proceedings that commenced after

the 1996 Act came into force. The 1996 Act admittedly came into force

on January 25, 1996. Under Section 21 of the Act, arbitration

proceedings commence on the date on which request for that dispute to

be referred to arbitration is received by the counterparty. The Learned

Arbitral Tribunal was constituted by GOI on April 4, 1996, well after

1996 Act came into force.

16. Indeed, the Security Deposit of Rs. 2.20 lakhs had been

forfeited before January 25, 1996. However, the GOI did not want to

rest with that forfeiture. The GOI desired to pursue a claim for Rs.

~35.42 lakhs towards all the expenses (i.e. damages) incurred owing to

Iqbal's failure to supply meat. It was the GOI that was the claimant in

the arbitration proceedings. The Learned Arbitral Tribunal was

appointed on April 4, 1996. The Learned Arbitral Tribunal entered

reference on April 8, 1996, and gave notice to Iqbal - all after the 1996

Act came into force. Therefore, the commencement of the arbitral

proceedings under Section 21 of the Act was clearly after the 1996 Act

came into force. The Liberty Order deals with this facet accurately.

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17. Therefore, the Impugned Order is wrong to have held that the

1940 Act would apply. It also had no basis to hold that the Section 34

Application was barred by limitation.

Standard of Review Applied:

18. The next issue that falls for consideration is whether the

Impugned Order was at all accurate in how it considered the challenge.

To begin with, since the standard of the 1940 Act was applied, there has

been no application of the 1996 Act by the Learned District Judge. On

this ground alone, the Impugned Order may be liable to be set aside.

19. However, it is well settled law that an appeal is a continuation

of the original proceeding. This being an appeal under Section 37 of the

1996 Act, this Court must examine the Arbitral Award through the

prism of Section 34, in much the same way the District Court ought to

have examined it. This position is well summarised in Malluru Mallapa1

in the following words:

13. It is a settled position of law that an appeal is a continuation of the proceedings of the original court. Ordinarily, the appellate jurisdiction involves a rehearing on law as well as on fact and is invoked by an aggrieved person. The first appeal is a valuable right of 1 Malluru Mallapa (D) through LRs vs. Karuvathappa & Ors. - (2020) 4 SCC 313

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the appellant and therein all questions of fact and law decided by the trial court are open for reconsideration. Therefore, the first appellate court is required to address itself to all the issues and decide the case by giving reasons. The court of first appeal must record its findings only after dealing with all issues of law as well as fact and with the evidence, oral as well as documentary, led by the parties. The judgment of the first appellate court must display conscious application of mind and record findings supported by reasons on all issues and contentions.

[Emphasis Supplied]

20. Therefore, the scope of review of the Section 37 Court being

identical and co-extensive with the scope of review that the Section 34

Court ought to have applied, it would be fruitful to extract the law

declared by the Supreme Court in Konkan Railway2 in the following

words:

14. Analysis: At the outset, we may state that the jurisdiction of the Court under Section 37 of the Act, as clarified by this Court in MMTC Ltd. v. Vedanta Ltd., is akin to the jurisdiction of the court under Sec-

tion 34 of the Act. Scope of interference by a court in an appeal under Section 37 of the Act, in examining an order, setting aside or refusing to set aside an award, is restricted and subject to the same grounds as the challenge under Section 34 of the Act.

[Emphasis Supplied]

2 Konkan Railway Corporation Ltd. Vs. Chenab Bridge Project Undertaking - (2023) 11 SCR 215

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21. This is the standard that I have applied in considering

whether the Arbitral Award is sustainable. Towards this end, I have

applied the same scope of review that ought to have been applied by the

Section 34 Court.

Natural Justice Denied:

22. Denial of natural justice is one of the grounds on which an

arbitral award could be regarded as being in conflict with the

fundamental policy of India. What is evident from the record is that the

claim made by the GOI before the Learned Arbitral Tribunal was

essentially a claim for damages. GOI's claim was that because Iqbal did

not deliver the meat as contracted, in addition to the forfeiture of the

Security Deposit, the GOI ought to be compensated by Iqbal with the

expenditure incurred by GOI by having to procure meat from elsewhere.

In the eyes of law, the essence of such a claim is one for damages. To

award damages, at the very least, the Learned Arbitral Tribunal ought to

have examined, analysed and reasoned the following issues in the

Arbitral Award:

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a) the price at which meat was actually procured by the

GOI;

b) the difference between the price at which meat was

actually bought and the price at which Iqbal had promised to

supply meat;

c) an assessment of efforts that the GOI took to

mitigate losses;

d) an assessment of the veracity of Iqbal's claim that

meat of the scale required was not available owing to

developments in the marketplace; and

e) an assessment of the veracity of Iqbal's claim that

market price had doubled and that it was impossible to supply

meat as committed.

23. Towards this end, the information and documents evidencing

the claim ought to be considered as evidence and analysed in the

Arbitral Award. It is also noteworthy that under Clause 21(g) of the

contract between the parties, containing the arbitration agreement, it

was explicitly agreed that where the disputed amount is Rs. 30,000 or

more, "the arbitrator shall give reasons for his award ". The Arbitral

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Award is conspicuously silent on the reasons for allowing the claim of

the GOI in toto. Whatever was claimed by the GOI has been awarded by

the Learned Arbitral Tribunal. There is not a whisper of an analysis of

the price actually paid by GOI for the meat it procured after Iqbal's

failure to deliver meat; the veracity of Iqbal's reasons for being unable to

supply; mitigating factors taken by the GOI; veracity of GOI's claim for

damages; and not even an analysis of whether the claim was only for the

difference between the price actually paid in the market and the price

committed to by Iqbal.

24. The Arbitral Award reads like a summary judgement without

any analysis whatsoever. It was obligatory as a matter of the contract

under which the Learned Arbitral Tribunal was constituted, that the

Arbitral Award should have been reasoned, explained and articulated in

the Arbitral Award. This is entirely missing. The agreement contained

an explicit stipulation that a claim of over Rs. 30,000 would need to be

adjudicated with reasons. The GOI's claim was evidently a multiple of

this threshold.

25. Worse, when Iqbal sought inspection of such data and

material in order to defend against the claim, the Learned Arbitral

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Tribunal actually denied supply of the information sought on a number

of counts, and even held material information as not being relevant. For

example, in response to Iqbal's request for copies of quotations obtained

for supply of meat from the market, the Learned Arbitral Tribunal ruled

in the record of proceedings held on December 7, 1996 that such

information has no relevance to the adjudication. As regards

information on the local market rates for the meat purported to have

been bought by the GOI, the Learned Arbitral Tribunal ruled that such

data could be obtained from the Civil Supplies Officer and no copies

need be given in the course of the arbitral proceedings. Copies of supply

orders on meat actually procured was denied on the premise that Iqbal

was a defaulter contractor and no such information is required to be

given. Vouchers for local purchases were also denied on the premise

that such information was outside the purview of the arbitral

proceedings.

26. Although the Arbitral Award eventually recorded Iqbal's

contention that there was no availability of meat in the market on a bulk

basis, Iqbal's request for information on availability of bulk meat in the

market was refused on the premise that it was Iqbal's duty to deliver the

meat as contracted and it was unnecessary to show whether the meat

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had been available when the GOI claimed to have purchased it from the

market. Even the quantification of meat actually procured compared

with the orders placed on Iqbal was not provided and it was stated that

this would be "discussed" during the proceedings. The Arbitral Award

contains no discussion on the point.

27. I am afraid the approach of the Learned Arbitral Tribunal is

untenable and tramples upon basic expectations of natural justice

principles. Even a court martial for military personnel entails following

the principles of natural justice, of course, in accordance with the rules

stipulated therefor. In arbitral proceedings conducted over a

commercial contract with a third party, where care has been taken to

stipulate that the arbitrator is required to give reasons for disputes of a

value of Rs. 30,000 and above, the Learned Arbitral Tribunal has not

only refused to provide documents and information that would be

relevant for adjudication of the issue but has also denied information

about availability of meat in the market despite noticing that one of the

grounds of defence was that meat in bulk had simply not been available.

28. Therefore, without delving into merits of the case, and

focusing solely on the due process meant to be followed by the Learned

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Arbitral Tribunal, what is writ large on the face of the record is that the

Arbitral Award is in serious violation of principles of natural justice and

has seriously prejudiced Iqbal by denying relevant information as well

as by denying reasons in the Arbitral Award. To the extent that the

Arbitral Award does not provide reasons, it is also contrary to the

contract, since Clause 21(g) explicitly requires reasons to be provided.

Absence of Judicial Approach:

29. In the absence of providing the underlying documents to

Iqbal, and in the absence of reasoning for the assessment and

quantification of damages, and that too in the teeth of the requirement

in Clause 21(g) of the arbitration agreement that reasons should be

provided, the Arbitral Award appears to have been made without

adopting a judicial approach. The following extracts from the ruling of

the Supreme Court in Associate Builders3, are noteworthy:

29. It is clear that the juristic principle of a "judicial approach"

demands that a decision be fair, reasonable and objective. On the obverse side, anything arbitrary and whimsical would obviously not be a determination which would either be fair, reasonable or objective.

3 Associate Builders vs. DDA - (2015) 3 SCC 49

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30. The audi alteram partem principle which undoubtedly is a fundamental juristic principle in Indian law is also contained in Sections 18 and 34(2)(a)(iii) of the Arbitration and Conciliation Act. These sections read as follows:

"18.Equal treatment of parties.--The parties shall be treated with equality and each party shall be given a full opportunity to present his case.

***

34.Application for setting aside arbitral award.--(1)*** (2) An arbitral award may be set aside by the court only if--

(a) the party making the application furnishes proof that--

***

(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case;"

*****

32. A good working test of perversity is contained in two judgments. In Excise and Taxation Officer-cum-Assessing Authority v. Gopi Nath & Sons [1992 Supp (2) SCC 312] , it was held : (SCC p. 317, para 7) "7. ... It is, no doubt, true that if a finding of fact is arrived at by ignoring or excluding relevant material or by taking into consideration irrelevant material or if the finding so outrageously defies logic as to suffer from the vice of irrationality incurring the blame of being perverse, then, the finding is rendered infirm in law."

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In Kuldeep Singh v. Commr. of Police [(1999) 2 SCC 10 : 1999 SCC (L&S) 429] , it was held : (SCC p. 14, para 10) "10. A broad distinction has, therefore, to be maintained between the decisions which are perverse and those which are not. If a decision is arrived at on no evidence or evidence which is thoroughly unreliable and no reasonable person would act upon it, the order would be perverse. But if there is some evidence on record which is acceptable and which could be relied upon, howsoever compendious it may be, the conclusions would not be treated as perverse and the findings would not be interfered with."

33. It must clearly be understood that when a court is applying the "public policy" test to an arbitration award, it does not act as a court of appeal and consequently errors of fact cannot be corrected. A possible view by the arbitrator on facts has necessarily to pass muster as the arbitrator is the ultimate master of the quantity and quality of evidence to be relied upon when he delivers his arbitral award. Thus an award based on little evidence or on evidence which does not measure up in quality to a trained legal mind would not be held to be invalid on this score. Once it is found that the arbitrators approach is not arbitrary or capricious, then he is the last word on facts. In P.R. Shah, Shares & Stock Brokers (P) Ltd.v.B.H.H. Securities (P) Ltd. [(2012) 1 SCC 594 : (2012) 1 SCC (Civ) 342] , this Court held : (SCC pp. 601-02, para 21) "21. A court does not sit in appeal over the award of an Arbitral Tribunal by reassessing or reappreciating the

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evidence. An award can be challenged only under the grounds mentioned in Section 34(2) of the Act. The Arbitral Tribunal has examined the facts and held that both the second respondent and the appellant are liable. The case as put forward by the first respondent has been accepted. Even the minority view was that the second respondent was liable as claimed by the first respondent, but the appellant was not liable only on the ground that the arbitrators appointed by the Stock Exchange under Bye-law 248, in a claim against a non- member, had no jurisdiction to decide a claim against another member. The finding of the majority is that the appellant did the transaction in the name of the second respondent and is therefore, liable along with the second respondent. Therefore, in the absence of any ground under Section 34(2) of the Act, it is not possible to re-examine the facts to find out whether a different decision can be arrived at."

34. It is with this very important caveat that the two fundamental principles which form part of the fundamental policy of Indian law (that the arbitrator must have a judicial approach and that he must not act perversely) are to be understood.

[Emphasis Supplied]

30. The only reasoning found in the Arbitral Award is about how

the contract is indeed in existence since Iqbal had contended that a

mere cyclostyled acceptance of the tender had been provided, to

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contend that no contract containing an arbitration agreement was in

existence. While there are plausible reasons on the issue of existence of

the contract and the arbitration agreement, the Arbitral Award, falls

woefully short of the standard contracted by the parties for adjudication

of their disputes, and is a product of an abject denial of natural justice

and the absence of a judicial approach.

31. Therefore, applying the standard of review provided for in

Section 34 of the Act, in exercise of the jurisdiction under Section 37,

which is an appellate jurisdiction over decisions of the Section 34 Court

with the scope of review being identical to the Section 34 jurisdiction,

the Arbitral Award deserves to be set aside. Iqbal has been able to

prove that it was unable to present its case with the denial of basic

factual ingredients that would be necessary to adjudicate the dispute,

thereby attracting Section 34(2)(a)(iii) of the Act.

Conflict with Public Policy:

32. I also find that the Arbitral Award is in conflict with public

policy for being in conflict with fundamental principles of natural justice

by denying inspection of relevant material that would have assisted the

Learned Arbitral Tribunal in conducting a fair assessment of a fact-

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intensive question of assessment of damages. By failing to do so, the

Learned Arbitral Tribunal has simply rendered a summary judgement

by awarding whatever had been claimed against Iqbal by GOI.

33. In ONGC vs. Discovery4 the Supreme Court ruled on a

situation where the arbitral tribunal had not permitted inspection of the

record that would have enabled consideration of whether a veritable

party was involved, before deciding a jurisdictional challenge under

Section 16 of the Act. The Supreme Court ruled that denial of discovery

and inspection of documents before ruling on jurisdiction was a

fundamental error of law and led to denial of natural justice since vital

evidence that could have assisted the arbitral tribunal in determination

of the challenge under Section 16 was shut out - (paragraphs 73 and 74,

including its sub-paragraphs set this out). To avoid further prolixity, I

am not extracting these paragraphs. This is precisely the reasoning that

weighs with me in holding that the Arbitral Award is against the

fundamental requirement of law.

34. In the process, the Arbitral Award indeed betrays a lack of

judicial approach in the adjudication entrusted to it. Assessment of

damages necessarily involves adjudication of facts relating to the 4 ONGC vs. Discovery Enterprises (P) Ltd. - (2022) 8 SCC 42

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damage purportedly suffered. The information sought and denied, as

set out above, and the summary judgement on a question of damages,

has resulted in the Arbitral Award being unsustainable and untenable.

Conclusion:

35. In the result, I find that the Impugned Order as well as the

Arbitral Award are unsustainable and deserve to be set aside. The

captioned Appeal is therefore allowed.

36. Having examined the conduct of both parties throughout the

proceedings right since the commencement of arbitration, I am satisfied

that no case is made out for award of costs.