Case Note & Summary
The petitioner, Rajnikant B. Vora, filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996, challenging an ex parte arbitral award dated 5 June 2014 passed by a sole arbitrator. The award directed the petitioner to pay Rs.3,12,183/- to the respondent, Fincruise Credit Services Pvt. Ltd., along with interest at 18% per annum and costs of Rs.5,000/-. The dispute arose from a loan facility of Rs.4,50,000/- availed by the petitioner from Barclays Investments & Loan India Limited in 2008, which was subsequently assigned to JFC Finance India Ltd. and then to the respondent. The respondent initiated arbitration and appointed a sole arbitrator, who issued a notice on 7 October 2013 directing the petitioner to appear on 22 October 2013. The petitioner failed to appear, and the arbitrator proceeded ex parte. The petitioner contended that he was not given sufficient notice of the arbitration proceedings and was denied an opportunity to present his case. The respondent was served but did not appear. The court examined the record and found that the arbitrator had issued only one notice and had not ensured proper service or granted any adjournment before proceeding ex parte. The court held that the award was passed in violation of the principles of natural justice and was liable to be set aside. However, considering the conduct of the petitioner, the court imposed costs of Rs.5,000/- payable to the respondent as a condition for setting aside the award. The petition was allowed, the award was set aside, and the parties were directed to appear before the arbitrator on a specified date.
Headnote
A) Arbitration Law - Setting Aside Ex Parte Award - Section 34 Arbitration and Conciliation Act, 1996 - Natural Justice - Petitioner challenged ex parte arbitral award on ground of insufficient notice and denial of opportunity - Court found that the arbitrator issued only one notice and proceeded ex parte without ensuring proper service or granting adjournment - Held that the award was passed in violation of principles of natural justice and set aside subject to payment of costs (Paras 5-8).
Issue of Consideration
Whether the arbitral award passed ex parte against the petitioner is liable to be set aside under Section 34 of the Arbitration and Conciliation Act, 1996 on the ground that the petitioner was not given sufficient notice of the arbitration proceedings and was denied an opportunity to present his case.
Final Decision
The court allowed the petition, set aside the ex parte arbitral award dated 5 June 2014, subject to the petitioner paying costs of Rs.5,000/- to the respondent within two weeks. The parties were directed to appear before the arbitrator on 20 April 2015 at 11:00 a.m.
Law Points
- Natural justice
- Ex parte award
- Sufficient notice
- Opportunity of hearing
- Section 34 Arbitration and Conciliation Act 1996
