Case Note & Summary
The petitioners, Mrs. Prajakta Mahesh Joshi and Mr. Mahesh Shrikrishna Joshi, filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996, challenging an ex parte arbitral award dated 14 August 2010. The award directed the petitioners and respondent No. 3 (the cooperative housing society) to execute a sale deed and convey a flat to respondents 1 and 2, or in the alternative, to locate a suitable flat and pay compensation. The petitioners contended that they were not served with any notice of the arbitration proceedings and that the arbitrator proceeded ex parte without ensuring proper service. The court examined the record and found that the arbitrator had issued a notice to the petitioners at an address that was not their correct address, and there was no evidence that the notice was served. The court held that the arbitrator failed to comply with the principles of natural justice by proceeding ex parte without proper service. Consequently, the court set aside the award and remitted the matter to the arbitrator for fresh consideration, directing the arbitrator to give notice to all parties and decide the matter afresh. The petition was allowed with no order as to costs.
Headnote
A) Arbitration - Ex Parte Award - Natural Justice - Section 34 Arbitration and Conciliation Act, 1996 - The petitioners challenged an ex parte award on the ground that they were not served with notice of the arbitration proceedings. The court held that the arbitrator must ensure proper service before proceeding ex parte. Since the record did not show that the petitioners were served, the award was set aside and the matter remitted to the arbitrator for fresh consideration after giving notice to all parties. (Paras 2-6)
Issue of Consideration
Whether an ex parte arbitral award can be sustained when the arbitrator did not ensure proper service of notice on the respondents before proceeding ex parte.
Final Decision
The court allowed the petition, set aside the ex parte award dated 14 August 2010, and remitted the matter to the arbitrator for fresh consideration after giving notice to all parties. No order as to costs.
Law Points
- Natural justice
- Ex parte award
- Service of notice
- Section 34 Arbitration and Conciliation Act
- 1996
- Setting aside award
Case Details
Arbitration Petition No. 121 of 2012
Mr. Subodh Gokhale for the petitioners; Mr. V. Verma i/by S. K. Associates for respondents 1 and 2.
Mrs. Prajakta Mahesh Joshi and Mr. Mahesh Shrikrishna Joshi
Mrs. Rekha Uday Prabhu, Mr. Uday Manjunath Prabhu, and The Secretary and Chairman, RNA Hills Cooperative Housing Society Ltd.
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Nature of Litigation
Petition under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside an ex parte arbitral award.
Remedy Sought
The petitioners sought to set aside the ex parte award dated 14 August 2010.
Filing Reason
The petitioners claimed they were not served with notice of the arbitration proceedings and the arbitrator proceeded ex parte without proper service.
Previous Decisions
An ex parte arbitral award was passed on 14 August 2010 by the arbitrator.
Issues
Whether the ex parte award was passed in violation of principles of natural justice due to lack of proper notice to the petitioners.
Submissions/Arguments
The petitioners argued that they were not served with any notice of the arbitration proceedings and the arbitrator proceeded ex parte without ensuring service.
The respondents supported the award and contended that the petitioners were duly served.
Ratio Decidendi
An arbitrator must ensure proper service of notice on all parties before proceeding ex parte. Failure to do so violates principles of natural justice and renders the award liable to be set aside under Section 34 of the Arbitration and Conciliation Act, 1996.
Judgment Excerpts
The Petitioners have invoked Section 34 of the Arbitration and Conciliation Act, 1996 and thereby challenged an exparte award.
The record shows that the arbitrator issued notice to the petitioners at an address which was not their correct address, and there is no evidence that the notice was served.
The arbitrator failed to comply with the principles of natural justice by proceeding ex parte without proper service.
Procedural History
The petitioners filed Arbitration Petition No. 121 of 2012 under Section 34 of the Arbitration and Conciliation Act, 1996 challenging an ex parte award dated 14 August 2010. The court heard the petition and delivered judgment on 6 December 2012.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 34
