Case Note & Summary
The petitioners, Abid & Company Steels Private Limited and its directors, filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996 challenging an arbitral award dated 21st April 2012. The respondent, The Bombay Mercantile Co-operative Bank Ltd., had sanctioned credit facilities to the petitioners in 1989, secured by equitable mortgage. The arbitrator allowed the bank's claim for recovery of Rs.9,88,55,938.80 with interest at 16% per annum from 1st October 2006, holding the petitioners jointly and severally liable. The petitioners argued that the award was contrary to public policy and that the arbitrator had ignored material evidence. The court examined the limitation issue first, noting that the petition was filed beyond the 90-day period under Section 34(3) and the petitioners sought condonation of delay of 30 days. The court found that the explanation for delay was insufficient, as the petitioners claimed they were awaiting a certified copy of the award but did not explain why they could not file earlier. On merits, the court held that the scope of interference under Section 34 is limited to grounds of public policy or patent illegality, and the petitioners failed to demonstrate any such ground. The court dismissed the petition as barred by limitation and also on merits, upholding the arbitral award.
Headnote
A) Arbitration - Section 34 Petition - Limitation - Condonation of Delay - Section 34(3) of Arbitration and Conciliation Act, 1996 - Petitioners filed petition beyond 90-day period and failed to show sufficient cause for delay of 30 days - Court held that delay cannot be condoned as no sufficient cause was made out - Petition dismissed as barred by limitation (Paras 1-10).
B) Arbitration - Section 34 Petition - Public Policy - Scope of Interference - Section 34(2)(b)(ii) of Arbitration and Conciliation Act, 1996 - Petitioners challenged award on merits alleging perversity - Court held that under Section 34, court cannot re-appreciate evidence or substitute its own view unless award is contrary to fundamental policy of Indian law or patently illegal - No such ground made out (Paras 11-20).
Issue of Consideration
Whether the arbitral award dated 21st April 2012 is liable to be set aside under Section 34 of the Arbitration and Conciliation Act, 1996 on grounds of being contrary to public policy, and whether the petition is barred by limitation.
Final Decision
The court dismissed the petition as barred by limitation and also on merits, upholding the arbitral award.
Law Points
- Section 34 of Arbitration and Conciliation Act
- 1996
- scope of interference with arbitral award
- public policy
- limitation for filing objections
- condonation of delay
- sufficiency of cause
Case Details
2015 LawText (BOM) (05) 43
Arbitration Petition No.1061 of 2012
Mr.Chirag Balsara a/w Mr.Mohit Arora a/w Mr.Kaizar Merchant a/w Mr.Mohit Punjabi i/by M/s.Apex Law Partners for the petitioners. Mr.Rohan Cama a/w Ms.Sapna Rachure i/by M/s.T.N. Tripathi & Co. for the respondent.
Abid & Company Steels Private Limited, Abbas Akberali Upletawala, Asma A. Upletawala
The Bombay Mercantile Co-operative Bank Ltd.
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Nature of Litigation
Petition under Section 34 of the Arbitration and Conciliation Act, 1996 challenging an arbitral award.
Remedy Sought
Setting aside of the arbitral award dated 21st April 2012.
Filing Reason
Petitioners alleged that the arbitral award was contrary to public policy and that the arbitrator ignored material evidence.
Previous Decisions
Arbitral award dated 21st April 2012 passed by the learned arbitrator allowing the claims of the respondent and declaring the petitioners jointly and severally liable to pay Rs.9,88,55,938.80 with interest.
Issues
Whether the petition under Section 34 of the Arbitration and Conciliation Act, 1996 is barred by limitation?
Whether the arbitral award is liable to be set aside on grounds of being contrary to public policy?
Submissions/Arguments
Petitioners argued that the award was contrary to public policy and that the arbitrator had ignored material evidence.
Respondent argued that the petition was barred by limitation and that no grounds under Section 34 were made out.
Ratio Decidendi
Under Section 34 of the Arbitration and Conciliation Act, 1996, the court cannot re-appreciate evidence or substitute its own view unless the award is contrary to fundamental policy of Indian law or patently illegal. The petition was also dismissed as barred by limitation for failure to show sufficient cause for delay.
Judgment Excerpts
By these petitions filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for short “the said Arbitration Act), the petitioners have impugned the arbitral award dated 21st April 2012 passed by the learned arbitrator allowing the claims made by the respondent and declaring that the petitioners herein are jointly and severally liable to pay to the respondent an amount of Rs.9,88,55,938,80 as on 30th September 2006 with further interest @ 16% from 1st October 2006 till payment.
Procedural History
The respondent bank filed a claim before the arbitrator, which was allowed on 21st April 2012. The petitioners filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 on an unspecified date, challenging the award. The court reserved judgment on 22nd April 2015 and pronounced on 6th May 2015.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 34
- Bombay Co-operative Societies Act, 1925:
- Multi State Co-operative Societies Act, 2002:
