Daisy Trading Corporation vs Union Of India
2001 Latest Caselaw 1705 Del

JUDGMENT

J.D. Kapoor, J.

1. This is an ex parte award. It appears that the principles of natural justice have been given a go by. The arbitration proceedings commenced in the year 1990. Till 1995 the respondent-UOI did not file any counter claim. The Arbitrator was adjudicating only the claim of the petitioner/objector. On 21st April, 1995 the petitioner submitted before the Arbitrator that he has not received the copy of the claim statement filed on behalf of the respondent-UOI. However, the proceedings were adjourned to 26th June, 1995 for argument. On 26th June, 1995 the counsel for the petitioner was not present. Though it is stated by the counsel that he went to attend the proceedings but the learned Arbitrator was on leave and the proceedings were adjourned without intimation to him about the next date.

2. Though the Arbitrator sent the registered notice to the petitioner for appearing on 20th July, 1995 but the same was not returned by the Postal Authorities. The learned Arbitrator proceeded ex parte against the petitioner by observing that this was a presumed sufficient service. Again it was on the vehement insistence of the counsel for the respondent that the matter was heard ex parte by the Arbitrator and closed for making and publishing the award.

3. The aforesaid facts and circumstances show that the learned Arbitrator did not have the benefit or opportunity of hearing the counsel for the petitioner with regard to the claim preferred by the petitioner which the Arbitrator was called upon to adjudicate.

4. The main object to getting the disputes adjudicated upon by way of alternative dispute mechanism of arbitration is to settle the disputes once for all. In order to meet the object and purpose of the Arbitration Act every Arbitrator is expected to make all out efforts to see that both the parties are given fair and reasonable opportunity of being heard. The Arbitrator is not supposed or expected to leave the things in such a state that his award itself becomes counter productive and subject of criticism and non-acceptance.

5. As far as possible the Arbitrator should not show haste or hurry in closing the proceedings so as to avoid the remittance of the award. Extra caution dn patience is to be exercised before proceeding ex parte. Arbitrator should always ensure that the party being proceeded ex parte is sufficiently noticed. The very observation of the Arbitrator that it was on the vehement insistence of the counsel for the respondent that the matter was heard ex parte and closed for making and publishing the award shows that the Arbitrator did not adhere to the principles of natural justice. The observation of the Arbitrator that there was sufficient presumption of the service of notice sent through registered AD on account of its non-return by the Postal Authorities is also legally unsound. Even if such a presumption is available it is dis-lodged the moment the concerned party denies having received the same.

6. It appears that due to the insistence of the respondent the Arbitrator acted in feverish haste and made and published the award without hearing the party who had preferred the claim particularly when there was no counter-claim filed by the respondent. The respondent was given as many as five long years to prefer any counter-claim or objections but he did not chose to file any.

7. Cumulative effect of the aforesaid facts and circumstances leads to the ineluctable conclusion that the Arbitrator has misconducted in proceeding ex parte against the petitioner and making and publishing the award. Even if the Arbitrator has given some reasons for rejection of the claim of the petitioner the award cannot be sustained in the eyes of law as to party much less the claimant can be condemned unheard.

8. The proceedings before the Arbitrator are not on the same parameter r pedestal as those in the court. Award is not appealable. it can be set aside if it is perverse, whimsical, arbitrary or is in complete violation of principles of natural justice or suffer from the vice of bias or partiality. That is why obligation is cast upon the Arbitrator to assessed and evaluate the claims and counter-claims of the parties after providing them substantially effective and full opportunity to prove them.

9. The foregoing principles and reasons persuade me to allow the objections and set aside the award and remit it to the Arbitrator for re-decision.

10. However it is pointed out by the learned counsel for the respondent that the Arbitrator is no more on the panel of the respondent and, therefore, as per terms of the contract the respondent be given liberty to appoint any other Arbitrator who is on the panel. The request is allowed. The respondent shall appoint the Arbitrator within one month and the parties shall appear before the Arbitrator under intimation to the petitioner on 18th December, 2001 for the aforesaid proceedings. All the records shall be transmitted to the Arbitrator well in time.

11. The suit stands disposed off.