Case Note & Summary
The case involves a petition under Section 34 of the Arbitration and Conciliation Act, 1996, filed by Tata Industries Limited and another against Grasim Industries Limited, challenging a procedural order dated 13 May 2010 passed by an arbitral tribunal. The tribunal was constituted pursuant to an order of a designated Judge of the Supreme Court under Section 11(6) of the Act. The dispute arose from a shareholders' agreement dated 15 December 2000 between the parties. On 31 January 2006, the first petitioner served a notice of termination alleging breach of Article 3.04(b) due to the respondent applying for a United Access Service Licence for Mumbai Metro Circle. A second notice was served on 27 November 2006 alleging breach of confidentiality. On 5 May 2006, the first petitioner invoked arbitration. On 1 June 2006, two share purchase agreements were executed, selling certain shares to the respondent without prejudice to the parties' contentions. The respondent contended before the Supreme Court that no live dispute survived due to the share purchase agreements. The Supreme Court, by order dated 9 July 2008, rejected the respondent's contention and appointed an arbitral tribunal. The tribunal passed a procedural order on 13 May 2010 directing discovery of documents. The petitioners challenged this order under Section 34. The court held that Section 34 only permits challenges to final arbitral awards, not procedural orders. The order was a procedural direction within the tribunal's discretion and not a final determination of rights. The petition was dismissed as not maintainable.
Headnote
A) Arbitration Law - Challenge to Procedural Order - Section 34 of the Arbitration and Conciliation Act, 1996 - Maintainability - The petition challenged a procedural order of the arbitral tribunal directing discovery of documents - The court held that Section 34 does not permit a challenge to every order of the tribunal, only to final awards - The order was a procedural direction within the tribunal's discretion - Held that the petition was not maintainable (Paras 1-6).
Issue of Consideration
Whether a procedural order of an arbitral tribunal directing discovery of documents can be challenged under Section 34 of the Arbitration and Conciliation Act, 1996.
Final Decision
The petition was dismissed as not maintainable. The court held that Section 34 of the Arbitration and Conciliation Act, 1996, does not permit a challenge to a procedural order of an arbitral tribunal; only final awards can be challenged under Section 34.
Law Points
- Section 34 of the Arbitration and Conciliation Act
- 1996
- does not permit challenge to procedural orders of the arbitral tribunal
- Arbitral tribunal has discretion to direct discovery of documents
- Discovery orders are not final awards
- Section 34 is not a remedy against every order of the tribunal
Case Details
2010 LawText (BOM) (11) 44
Arbitration Petition No.1097 of 2010
Mr. Milind Sathe, Senior Advocate with Mr. K.K. Lahiri, Mr. Gopal Jain, Ms. Ruby Ahuja, Mr. S.V. Doijode, Mr. Parag Kabadi and Ms. Priyanka C. Kothari i/b Doijode Associates for the Petitioners; Dr. Virendra Tulzapurkar, Senior Advocate with Mr. Virag Tulzapurkar, Senior Advocate, Mr. Vikram Trivedi, Mr. Gaurav Pachnanda, Mr. Sachin Chandarana, Mr. Mayur Bhojwani and Ms. Shilpa Joshi i/b M/s. Manilal Kher Ambalal & Co. for the Respondent.
Tata Industries Limited and another
Grasim Industries Limited
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Nature of Litigation
Challenge to a procedural order of an arbitral tribunal under Section 34 of the Arbitration and Conciliation Act, 1996.
Remedy Sought
The petitioners sought to set aside the procedural order dated 13 May 2010 of the arbitral tribunal directing discovery of documents.
Filing Reason
The petitioners contended that the procedural order was erroneous and should be set aside under Section 34.
Previous Decisions
The Supreme Court, by order dated 9 July 2008, rejected the respondent's contention that no live dispute survived and appointed an arbitral tribunal under Section 11(12).
Issues
Whether a procedural order of an arbitral tribunal directing discovery of documents can be challenged under Section 34 of the Arbitration and Conciliation Act, 1996.
Submissions/Arguments
The petitioners argued that the procedural order was erroneous and should be set aside under Section 34.
The respondent contended that the petition was not maintainable as Section 34 only permits challenge to final awards, not procedural orders.
Ratio Decidendi
Section 34 of the Arbitration and Conciliation Act, 1996, only permits challenges to final arbitral awards, not procedural orders. The arbitral tribunal has discretion to direct discovery of documents, and such orders are not subject to interference under Section 34.
Judgment Excerpts
This Petition under Section 34 of the Arbitration and Conciliation Act 1996 raises a challenge to a procedural order of 13 May 2010 of an arbitral tribunal constituted in pursuance of an order passed by a designated Judge of the Supreme Court under Section 11(6).
The order of the tribunal is a procedural order directing discovery of documents. Section 34 of the Arbitration and Conciliation Act, 1996 does not permit a challenge to every order of the tribunal. Only a final award can be challenged under Section 34.
Procedural History
On 15 December 2000, a shareholders' agreement was entered into. On 31 January 2006, the first petitioner served a notice of termination. On 27 November 2006, a second notice was served. On 5 May 2006, arbitration was invoked. On 1 June 2006, share purchase agreements were executed. Proceedings under Section 11(6) were withdrawn and later the Supreme Court appointed an arbitral tribunal on 9 July 2008. The tribunal passed a procedural order on 13 May 2010. The petitioners filed this petition under Section 34 on an unspecified date.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 34, Section 11(6), Section 11(12), Section 21
