Case Note & Summary
The matter arose out of a petition under Section 34 of the Arbitration and Conciliation Act, 1996 filed by Hindustan Petroleum Corporation Ltd., a state-owned oil company, challenging an arbitral award dated 18 June 2024. The respondent was a joint venture of Om Constraction and Nice Projects Ltd., which had been awarded a contract for civil, structural and piping work at an ethanol bio-refinery in Bathinda pursuant to a tender floated in April 2021. The contract was terminated by the petitioner in August 2022 alleging slow progress, and the respondent invoked arbitration. The sole arbitrator, appointed by the High Court under Section 11, allowed the respondent’s claims in the sum of Rs.19,82,79,601 with interest and costs, and also granted counterclaims in favour of the petitioner for Rs.10,00,226, leading to the present challenge. The petitioner’s core grievance was that the contract and the entire arbitral proceedings were vitiated by fraud because one of the joint venture partners, Nice Projects Ltd., was undergoing Corporate Insolvency Resolution Process (CIRP) since 12 February 2021 under an order of the National Company Law Tribunal, a fact that was allegedly suppressed at the time of bidding and contract formation. The petitioner contended that the joint venture agreement and the subsequent contract were void ab initio, that the undertaking of non-pendency of insolvency proceedings submitted by the respondent was false, and therefore no valid arbitration agreement existed. Before the arbitral tribunal, the petitioner had raised jurisdictional objections under Sections 16 and 32, which were rejected by Procedural Order No.9 dated 16 September 2023, holding that the petitioner ought to have verified the correctness of the undertaking and that any fraud could be pursued by criminal action, which was not within the tribunal’s purview. A writ petition against that order was dismissed by the High Court on 17 October 2023. The petitioner also alleged that the tribunal denied it the opportunity to amend the statement of defence to incorporate the fraud ground and to lead evidence, and accused the arbitrator of bias. The tribunal refused amendment and also rejected the bias application. In the Section 34 petition, the petitioner advanced four broad objections: (i) the award was vitiated by fraud; (ii) the award was granted without any evidence; (iii) the petitioner was denied a fair opportunity of hearing; and (iv) the arbitrator was biased. The judgment as provided does not contain the Court’s analysis or final order; the text ends abruptly during the narration of petitioner’s submissions. The procedural history records that the award had been unconditionally stayed by order dated 21 August 2025, and the petition was heard and reserved on 5 January 2026, pronounced on 19 January 2026. The incomplete record precludes a definitive statement of the Court’s decision and ratio decidendi.
Headnote
A) Arbitration Law – Validity of Arbitration Agreement – Fraud – Arbitration and Conciliation Act, 1996, Sections 16, 32, 34 – Petitioner argued that the contract and arbitration agreement were vitiated by fraud because the respondent joint venture suppressed the initiation of CIRP against partner Nice Projects Ltd. before the contract award, and that the arbitral tribunal wrongly held that the petitioner should have verified undertakings and that fraud gave rise to criminal action only. (Paras 10-11)
B) Arbitration Law – Locus Standi of Joint Venture – Insolvency and Bankruptcy Code, 2016, Section 14 – The petitioner contended that the JV agreement was void ab initio as it was signed by a suspended director of a company under CIRP, and the JV could not prosecute the claim without impleading Nice Projects Ltd. The tribunal had earlier rejected a challenge to locus standi, treating the JV as an independent entity. (Paras 2, 10)
C) Arbitration Law – Amendment of Pleadings – Procedural Fairness – Arbitration and Conciliation Act, 1996, Sections 18, 34 – Petitioner alleged that the tribunal refused to allow amendment to the statement of defence to incorporate the fraud allegations, leading to denial of natural justice, and that the tribunal prevented filing of further applications on jurisdiction. (Paras 6, 7)
D) Arbitration Law – Bias Allegation – Impartiality of Tribunal – Arbitration and Conciliation Act, 1996, Sections 12, 34 – Petitioner filed an application alleging bias, which was rejected by the tribunal, claiming that the overall conduct of proceedings indicated prejudice. (Para 7)
E) Evidence Law – Award Without Evidence – Patent Illegality – The petitioner submitted that the arbitral tribunal allowed the respondent’s claims in the absence of supporting evidence, rendering the award patently illegal and liable to be set aside under Section 34. (Para 9)
Issue of Consideration
Whether the arbitral award is vitiated by fraud due to non-disclosure of Corporate Insolvency Resolution Process (CIRP) against a joint venture partner, and whether the Arbitral Tribunal's rejection of jurisdictional objection under Sections 16 and 32 was justified; Whether denial of opportunity to amend pleadings and lead evidence amounts to violation of natural justice; Whether the Arbitral Tribunal acted with bias.
Case Details
2026 LawText (BOM) (01) 68
CARBP(L) NO. 28685 OF 2024 (with Interim Application (L) NO. 28770 OF 2024)
Zubin Behramkamdin, Vijay Purohit, Pratik Jhaveri, Samkit Jain, Akshay Ringe, Akash Menon, Anjana Vijay
Hindustan Petroleum Corporation Ltd.
Om Constraction on behalf of Om Constraction Nice Projects Limited JV
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Nature of Litigation
Petition under Section 34 of the Arbitration and Conciliation Act, 1996 challenging an arbitral award dated 18 June 2024.
Remedy Sought
Petitioner seeks to set aside the arbitral award in its entirety and remit the matter.
Filing Reason
Petitioner alleges that the arbitral award is vitiated by fraud, lack of supporting evidence, denial of opportunity to lead evidence and amend pleadings, and bias on the part of the Arbitral Tribunal.
Previous Decisions
Arbitral Tribunal rejected petitioner's application under Sections 16 and 32 challenging jurisdiction on 16 September 2023; High Court dismissed Writ Petition No. 3553 of 2023 challenging that order on 17 October 2023; Arbitral Tribunal rejected amendment of Statement of Defence on 25 October 2023 and 1 November 2023; bias allegation rejected on 18 December 2023; Award passed on 18 June 2024; High Court unconditionally stayed award on 21 August 2025.
Issues
Whether the non-disclosure of CIRP proceedings against a joint venture partner renders the contract and arbitration agreement void ab initio, thereby vitiating the arbitral award.
Whether the Arbitral Tribunal's rejection of the jurisdictional objection under Sections 16 and 32 of the Arbitration Act was perverse and contrary to law.
Whether the petitioner was denied a reasonable opportunity to present its case due to the refusal to allow amendment of pleadings and to lead evidence.
Whether the Arbitral Tribunal's conduct demonstrated bias warranting setting aside of the award.
Submissions/Arguments
Petitioner argued that the joint venture partner Nice Projects Ltd. was under CIRP since 12 February 2021, making the JV agreement and subsequent contract void ab initio; the undertaking of no insolvency was false; the Arbitral Tribunal erroneously held that fraud gave rise only to criminal action and that the petitioner should have verified the correctness of the undertaking.
Petitioner contended that the Arbitral Tribunal wrongly treated the JV as an independent legal entity when the JV agreement itself showed it was not, and that the locus standi challenge was wrongly rejected.
Petitioner submitted that the Arbitral Tribunal prevented filing of further applications on jurisdiction and refused amendment to introduce fraud allegations, thereby violating principles of natural justice.
Petitioner alleged that the award was passed without any evidence and that the Arbitral Tribunal’s overall conduct, including denial of opportunity, indicated bias.
Judgment Excerpts
the purchase order, letter of Award, Arbitration Agreement and the Arbitral Award are vitiated by fraud allegedly committed by the Respondent in not disclosing initiation of CIRP against M/s. Nice Projects Ltd.
since M/s. Nice Projects Ltd. was admitted into CIRP on 12 February 2021, the very contract awarded in favour of the JV is an outcome of fraud.
the Arbitral Tribunal has erroneously held that the JV is an independent legal entity and that the entity was not in CIRP.
Procedural History
On 30 April 2021, the petitioner issued a tender notice for civil, structural and piping work, with a corrigendum on 18 May 2021. Prior to this, on 12 February 2021, the National Company Law Tribunal had admitted Company Petition No.3042/ND/2019 and initiated Corporate Insolvency Resolution Proceedings against Nice Projects Ltd. A Joint Venture Agreement was executed on 31 May 2021 between Om Constraction and Nice Projects Ltd., followed by another JV agreement on 2 July 2021. The respondent-JV emerged as the successful bidder, and the petitioner issued a Purchase Order and Letter of Award on 15 July 2021. Work commenced but, after issuing show cause notices for slow progress, the petitioner terminated the contract on 26 August 2022. The respondent invoked arbitration on 7 September 2022 and filed a Section 11 application on 21 October 2022, disclosing that Nice Projects Ltd. was undergoing CIRP. The High Court constituted an arbitral tribunal of a sole arbitrator on 12 December 2022. Respondent filed its Statement of Claim. Petitioner’s application challenging locus standi was rejected on 23 March 2023. An interim order of status quo was passed on 12 April 2023. The Statement of Defence was filed on 31 July 2023. In August 2023, the petitioner claims to have discovered the suppression of CIRP. On 1 September 2023, it sought stay of proceedings, and on 13 September 2023 filed written submissions on jurisdiction. The Arbitral Tribunal rejected the jurisdictional objection on 16 September 2023. A writ petition against that order was dismissed on 17 October 2023. The request to stay proceedings to amend pleadings was rejected on 25 October 2023, and the formal application for amendment was rejected on 1 November 2023. The bias application was rejected on 18 December 2023. The Arbitral Award was passed on 18 June 2024. The High Court unconditionally stayed the award on 21 August 2025. The petition was heard and reserved on 5 January 2026, and judgment pronounced on 19 January 2026.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 11, Section 16, Section 17, Section 32, Section 34
- Insolvency and Bankruptcy Code, 2016: Section 14
- Companies Act, 1956:
