Case Note & Summary
The Petitioner, Municipal Corporation of Greater Mumbai, filed a petition under Section 24 of the Arbitration & Conciliation Act, 1996 challenging an arbitral award dated 10th November 2002 made by a sole arbitrator. The award directed the Petitioner to pay certain amounts with interest to the Respondent, PWT Projects Ltd. The dispute arose out of a contract entered into by the parties in February 1998 for the supply, delivery, erection, and commissioning of a 455 MLD Water Treatment Plant and associated civil works at Panjrapur. The contract contained an arbitration clause providing for appointment of a single arbitrator by consent or three arbitrators, with arbitration to be conducted in accordance with the Rules and Procedure for Arbitration of the International Chamber of Commerce (ICC). A single arbitrator was appointed by consent. In the first meeting on 24th March 1999, the Respondent's advocate pointed out that the arbitration proceedings should be conducted under ICC Rules. The Petitioner's advocate sought time to consider the situation. The Petitioner never raised any objection thereafter and participated in the proceedings for over three years. The arbitrator made the award. The Petitioner challenged the award on the ground that the proceedings were not conducted in accordance with the arbitration clause because the ICC Rules were applied without the Petitioner's consent. The Court held that the Petitioner, by its conduct, had waived any objection to the applicability of ICC Rules. The Petitioner's advocate sought time to consider the situation but never raised any objection. The Petitioner participated in the proceedings for over three years without demur. Therefore, the challenge to the award was not maintainable. The petition was dismissed with no order as to costs.
Headnote
A) Arbitration Law - Challenge to Arbitral Award - Section 24 of Arbitration & Conciliation Act, 1996 - ICC Rules - Validity of Proceedings - The Petitioner challenged the award on the ground that the arbitration was conducted under ICC Rules without the Petitioner's consent. The Court held that the Petitioner, by participating in the proceedings without raising any objection, had waived its right to challenge the applicability of ICC Rules. The award was upheld. (Paras 1-5) B) Arbitration Law - Conduct of Proceedings - Waiver of Objection - Section 24 of Arbitration & Conciliation Act, 1996 - The Court observed that the Petitioner's advocate sought time to consider the situation regarding ICC Rules but never raised any objection thereafter. The Petitioner participated in the proceedings for over three years without demur. Held that the Petitioner cannot now challenge the award on that ground. (Paras 3-5)
Issue of Consideration
Whether the arbitration proceedings conducted in accordance with ICC Rules were valid and binding on the Petitioner, and whether the Petitioner's challenge to the award on the ground that the proceedings were not conducted in accordance with the arbitration clause is maintainable.
Final Decision
The petition is dismissed. No order as to costs.
Law Points
- Arbitration clause
- ICC Rules
- Section 24 of Arbitration & Conciliation Act
- 1996
- challenge to award
- conduct of proceedings
- waiver of objection
