Case Note & Summary
The judgment concerns two arbitration petitions filed by Ms. Deepika Vijay Nihalani and Vijay Roopkumar Nihalani against INA Stock Broking Co. Pvt. Ltd. The petitioners challenged arbitral awards dated 29 September 2008 in Arbitration References No. 71 of 2008 and No. 70 of 2008, respectively, which directed them to pay sums of Rs.8,69,234.17 and Rs.2,39,385.10 along with interest at 18% per annum from the date of reference till payment. The respondent, a stock broking company, had initiated arbitration claiming outstanding dues for trading transactions. The petitioners defended on the ground that the respondent had engaged in bogus trading without their instructions or authorization. However, the arbitrator recorded that the petitioners did not pursue their counterclaims, which were disposed of as not pressed. Consequently, the allegations of unauthorized trading remained unproved. The court noted that there was no other material to support the allegations, and the defences raised were uncorroborated by documents. The petitioners sought to set aside the awards under Section 34 of the Arbitration and Conciliation Act, 1996. The court held that the findings of fact by the arbitrator are final and not open to challenge unless perverse or contrary to public policy. Since the petitioners failed to prove their case, no interference was warranted. The court dismissed both petitions, upholding the awards.
Headnote
A) Arbitration Law - Challenge to Arbitral Award - Section 34 of Arbitration and Conciliation Act, 1996 - Scope of Interference - Petitioners challenged awards directing payment of Rs.8,69,234.17 and Rs.2,39,385.10 with 18% interest - Court held that findings of fact by arbitrator are final and not open to challenge unless perverse or contrary to public policy - Petitioners failed to prove allegations of bogus trading as counterclaims were not pressed and no evidence was led - Held that no interference is warranted under Section 34 (Paras 1-4).
Issue of Consideration
Whether the arbitral awards directing payment of sums with interest should be set aside under Section 34 of the Arbitration and Conciliation Act, 1996, on grounds of alleged bogus trading and unauthorized transactions.
Final Decision
Both arbitration petitions are dismissed. The arbitral awards are upheld.
Law Points
- Arbitration award
- challenge under Section 34 of Arbitration and Conciliation Act
- 1996
- scope of interference
- findings of fact
- counterclaim not pressed
- lack of evidence
- bogus trading
- unauthorized transactions
Case Details
2010 LawText (BOM) (01) 25
Arbitration Petition No. 112 of 2009 and Arbitration Petition No. 113 of 2009
Mr. Prakash Punjabi for the Petitioner, Mr. Simil Purohit i/b Mr. Jayesh Patel for the Respondent
Ms. Deepika Vijay Nihalani and Vijay Roopkumar Nihalani
INA Stock Broking Co. Pvt. Ltd.
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Petitions under Section 34 of the Arbitration and Conciliation Act, 1996 challenging arbitral awards directing payment of sums with interest.
Remedy Sought
Setting aside of arbitral awards dated 29 September 2008 in Arbitration References No. 71 of 2008 and No. 70 of 2008.
Filing Reason
Petitioners alleged that the respondent engaged in bogus trading without instructions or authorization.
Previous Decisions
Arbitral awards dated 29 September 2008 directed petitioners to pay Rs.8,69,234.17 and Rs.2,39,385.10 with 18% interest per annum.
Issues
Whether the arbitral awards are liable to be set aside under Section 34 of the Arbitration and Conciliation Act, 1996.
Whether the allegations of bogus trading and unauthorized transactions were proved.
Submissions/Arguments
Petitioners argued that the respondent had done bogus trading without instructions or authorization.
Respondent submitted that the counterclaims were not pressed and no evidence was led to support the allegations.
Ratio Decidendi
Findings of fact by an arbitrator are final and not open to challenge under Section 34 of the Arbitration and Conciliation Act, 1996 unless perverse or contrary to public policy. Since the petitioners did not pursue their counterclaims and failed to lead evidence, the allegations of bogus trading remained unproved, and no interference with the awards is warranted.
Judgment Excerpts
In both the matters, there is a clear finding given as the petitioner (Original Respondent) has not persuaded the counter claim and therefore, both the counter claims of the Petitioners were disposed of as not pressed.
There is no other material to support the said allegations of bogus or uninstructed trading or business by the Respondent.
Procedural History
The respondent filed arbitration references (No. 70/2008 and No. 71/2008) before the Bombay Stock Exchange. The arbitrator passed awards on 29 September 2008 directing the petitioners to pay sums with interest. The petitioners filed Arbitration Petition No. 112 of 2009 and No. 113 of 2009 under Section 34 of the Arbitration and Conciliation Act, 1996 challenging the awards. The court reserved judgment on 7 December 2009 and pronounced on 15 January 2010.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 34
