Case Note & Summary
The present petition was filed under Section 34 of the Arbitration and Conciliation Act, 1996, challenging in part an Arbitral Award dated 23rd November, 2023. The Arbitral Award allowed the claim of Petitioner No.1 (Claimant) for Rs.59,97,210/- and also allowed the Counter Claim of Respondent Nos. 1 to 3 for Rs.1,25,69,768/-, directing Petitioner No.1 to pay the net amount of Rs.65,72,558/-. The dispute arose from a Loan Agreement dated 29th January, 2010 between L&T Finance Company as lender and Respondent No.1 as borrower for Rs.2,85,70,000/- with interest at 6.26% p.a., secured by hypothecation of assets and guarantees. Default occurred, and the lender sold the assets for Rs.1.10 Crores, reducing its claim. The Petitioner alleged that the Counter Claim was not served properly and that the Arbitrator proceeded ex parte, violating natural justice. The procedural history detailed multiple arbitration meetings, substitutions of parties, and delays, culminating in the Arbitrator hearing the Counter Claim in the Petitioner's absence. The judgment text provided only factual narration and does not contain the court's analysis or final decision.
Issue of Consideration
Whether the arbitral award is liable to be set aside under Section 34 of the Arbitration and Conciliation Act, 1996 on grounds of procedural irregularity and denial of natural justice
Law Points
- Arbitration and Conciliation Act
- 1996
- Section 34
- challenge to arbitral award
- natural justice
- service of counter claim
- procedural fairness
Case Details
2024 Lawtext (BOM) (6) 134
I.A. (L) NO.6246 OF 2024 IN COMM. ARBITRATION PETITION (L)NO.5565 OF 2024
Mr. Ranjeev Carvahlo with Ms. Aaushi Doshi and Mr. Deep Dighe i/b. DS Law, for the Applicant/ Petitioner. Mr. Aditya Shiralkar with Ms. Garima Mehrotra and Mr. Satish Desai, for Respondent Nos.1, 2 and 3.
Petitioner No. 1 and Petitioner No. 2
Respondent No. 1, Respondent No. 2, Respondent No. 3
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Nature of Litigation
Petition under Section 34 of the Arbitration and Conciliation Act, 1996 challenging an arbitral award
Remedy Sought
Setting aside in part the Arbitral Award dated 23rd November, 2023
Filing Reason
Alleged procedural irregularities including improper service of Counter Claim and denial of opportunity to respond
Previous Decisions
Arbitral Award dated 23rd November, 2023 allowed Claimant's claim for Rs.59,97,210/- and Counter Claim for Rs.1,25,69,768/-, directing net payment of Rs.65,72,558/- by Petitioner No.1
Judgment Excerpts
The present Petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996 ("the Arbitration Act"), challenging in part the Arbitral Award dated 23rd November, 2023 passed by the learned Arbitrator.
By the impugned Award, the learned Arbitrator allowed the claim of Petitioner No.1 (Claimant) for a sum of Rs.59,97,210/-. At the same time, the Arbitrator allowed the Counter Claim filed by Respondent Nos. 1 to 3 for a sum of Rs.1,25,69,768/- and, accordingly, after giving credit for the claim amount, directed Petitioner No.1 to pay Respondents a sum of Rs.65,72,558/-.
It is the case of the Petitioner that a copy of this Counter Claim was only served on Petitioner No.1 vide an e-mail dated 23rd June, 2023 and that too without annexures.
Procedural History
Loan Agreement dated 29-01-2010; Default and recall notice dated 01-06-2011; Arbitration invoked; Statement of Claim filed 28-06-2011; Respondent objected to Arbitrator appointment 29-11-2012; Valuation Report submitted 29-04-2013; Assets sold for Rs.1.10 Crores, claim reduced 21-11-2014; Multiple arbitration hearings from 2014 to 2023 with various orders; Counter Claim filed 05-12-2017; Petitioner No.1 substituted 27-09-2022; Petitioner No.2 informed assignment 21-10-2022; Issues framed 18-04-2023; On 14-06-2023, Petitioner absent, arguments heard on Counter Claim, hearing closed; Advocate for Petitioner requested Counter Claim copy on 22-06-2023; incomplete Counter Claim forwarded 23-06-2023; E-mail of 27-06-2023 seeking further documents.
Acts & Sections
- Arbitration and Conciliation Act, 1996: 34
