Supreme Court Invalidates Ex Parte Arbitration Awards; Upholds Principles of Party Autonomy


Summary of Judgement

Existence of Arbitration Agreement: Whether the purported arbitration agreement dated 01.04.1957 was valid and enforceable. Unilateral Appointment of Arbitrators: Whether the arbitrators were appointed in violation of the principles of party autonomy and statutory requirements.Fraudulent Claims: Whether the arbitration proceedings and awards were tainted with fraud, lacking jurisdiction. (Paras: 16-25)

Acts and Sections Discussed:

  1. Constitution of India (COI)
    • Article 226: Jurisdiction of High Courts
  2. Arbitration and Conciliation Act, 1996 (A&C Act)
    • Section 7: Arbitration Agreement
    • Section 11: Appointment of Arbitrators
    • Section 34: Application for Setting Aside Arbitral Award
    • Section 43: Limitation Period
    • Section 18: Equal Treatment of Parties
  3. Code of Civil Procedure, 1908 (CPC)
    • Section 47: Questions to Be Determined by the Court Executing a Decree

Subjects:
Arbitration Agreement, Limitation Period, Unilateral Appointment, Ex Parte Awards, Fraudulent Arbitration


Decision and Ratio Decidendi:

  1. Nullity of Awards:
    The Supreme Court declared the ex parte arbitration awards dated 15.02.2008 and 25.06.2008 as null and void, holding that the arbitration agreement relied upon was not established.
  2. Fraudulent Proceedings:
    The Court emphasized that arbitration proceedings orchestrated by the respondent were fraudulent and lacked jurisdiction, violating fundamental principles of justice.
  3. Principle of Party Autonomy:
    The unilateral appointment of arbitrators was deemed invalid. Arbitration requires consent and adherence to statutory frameworks under the A&C Act.
  4. Execution Proceedings Dismissed:
    The Court dismissed the execution petitions initiated based on the invalid awards

The Judgement

Case Title: STATE OF UTTAR PRADESH AND ANOTHER VERSUS R.K. PANDEY AND ANOTHER

Citation: 2025 LawText (SC) (1) 91

Case Number: CIVIL APPEAL NO. 10212 OF 2014

Date of Decision: 2025-01-09