Case Note & Summary
The appeal was filed under Clause 15 of the Letters Patent read with Order XXXVI Rule 9 of the Original Side Rules and Section 37 of the Arbitration and Conciliation Act, 1996 and Section 13(1A) of the Commercial Courts Act, 2015, challenging an order dated 26.04.2023 passed by a learned Single Judge in Arb.OP (Comm.Div) No.36 of 2022. The Single Judge had rejected the appellant's petition under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside an arbitral award dated 21.7.2021 passed by a Sole Arbitrator. The appellant, Gopal Krishan Rathi, was the respondent in the arbitration, and the respondent, Dr. R. Palani, was the claimant. The dispute pertained to a loan agreement under a Memorandum of Understanding dated 28th August 2015. The appellant raised two grounds before the Division Bench: (a) that no personal hearing was granted by the Arbitrator despite being sought, and (b) that all documents filed by the appellant were not considered in the award. On the first ground, the court noted that this ground was not raised in the Section 34 petition, which contained 31 grounds, and the appellant's counsel candidly admitted it was not raised before the Single Judge. Therefore, the court held that this ground cannot be raised for the first time in an appeal under Section 37. On the second ground, the court observed that the learned Single Judge had considered the submissions and found no perversity. The court further noted that the Arbitrator had listed all 28 documents filed by the appellant in paragraph 3 of the award, stated that all documents were taken on record, and dealt with relevant documents in paragraphs 8, 9, and 10. The Arbitrator observed that the documents and emails produced by the respondent (appellant herein) failed to shift liability or disprove the loan. The court found no perversity in the Single Judge's findings and dismissed the appeal, confirming the award.
Headnote
A) Arbitration Law - Appeal under Section 37 - New Grounds - A ground not raised before the Single Judge in a petition under Section 34 of the Arbitration and Conciliation Act, 1996 cannot be raised for the first time in an appeal under Section 37 of the said Act - The appellant accepted the position that the ground of no personal hearing was not raised earlier, hence cannot be urged now (Paras 2-3).
B) Arbitration Law - Arbitral Award - Consideration of Documents - The Arbitrator having listed all 28 documents filed by the appellant in the award and stating that all documents were taken on record and issues decided, the contention that all documents were not considered is without merit - The Single Judge's finding of no perversity is upheld (Paras 4-5).
Issue of Consideration
Whether a new ground not raised before the Single Judge under Section 34 can be raised in an appeal under Section 37 of the Arbitration and Conciliation Act, 1996; Whether non-consideration of all documents by the Arbitrator constitutes a ground to set aside the award.
Final Decision
The appeal is dismissed. The order dated 26.04.2023 passed by the learned Single Judge in Arb.OP (Comm.Div) No.36 of 2022 is confirmed. No costs.
Law Points
- Appeal under Section 37 of Arbitration and Conciliation Act
- 1996
- cannot raise new grounds not urged before Single Judge under Section 34
- Arbitrator's consideration of documents is sufficient if all documents are listed and dealt with
- No perversity in Single Judge's findings.
Case Details
2025 LawText (MAD) (01) 304
O.S.A.(CAD) No.141 of 2023
K.R. Shriram, Chief Justice, Senthilkumar Ramamoorthy
Mr. Jayesh B. Dolia (Senior Counsel for M/s. Aiyar and Dolia) for Appellant, Mr. Muralikumaran (Senior Counsel for Mr. R. Gopinath for M/s. Mc Gan Law Firm) for Respondent
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Nature of Litigation
Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 against order rejecting Section 34 petition to set aside arbitral award.
Remedy Sought
Appellant sought to set aside the order dated 26.04.2023 passed by the learned Single Judge in Arb.OP (Comm.Div) No.36 of 2022 and consequently set aside the arbitral award dated 21.7.2021.
Filing Reason
Appellant challenged the arbitral award on grounds of no personal hearing and non-consideration of documents.
Previous Decisions
Learned Single Judge rejected the Section 34 petition on 26.04.2023.
Issues
Whether a ground not raised before the Single Judge under Section 34 can be raised in an appeal under Section 37 of the Arbitration and Conciliation Act, 1996?
Whether the Arbitrator's failure to consider all documents filed by the appellant constitutes a ground to set aside the award?
Submissions/Arguments
Appellant argued that no personal hearing was granted by the Arbitrator despite being sought.
Appellant argued that all documents filed by him were not considered in the award.
Respondent opposed the appeal, supporting the Single Judge's order.
Ratio Decidendi
A ground not raised before the Single Judge in a Section 34 petition cannot be raised for the first time in an appeal under Section 37 of the Arbitration and Conciliation Act, 1996. An arbitral award is not liable to be set aside on the ground of non-consideration of documents if the Arbitrator has listed all documents and stated that they were taken on record and issues were decided.
Judgment Excerpts
Shri Dolia raised two grounds of challenge to the award: (a) that no personal hearing was granted by the learned Arbitrator, though it was sought for by appellant; and (b) that all documents of appellant were not considered in the award.
On the first ground that no personal hearing was granted, though in the petition filed under Section 34 of the said Act almost 31 grounds were raised, this was not one of the grounds.
Moreover, Shri Dolia, to a specific query posed by us, was candid that this ground was not raised before the learned Single Judge. Therefore, in our view, this cannot be raised now at the stage of appeal under Section 37 of the said Act, appellant having accepted the position.
As regards the non-consideration of all documents filed by appellant, the learned Single Judge has considered the submissions and given his findings. We find no perversity in the findings given by the learned Single Judge.
Moreover, in our view, the learned Arbitrator has considered all the 28 documents. Paragraph 3 of the award dated 21.7.2021 contains the list of 28 documents filed by appellant. The Arbitrator has also stated that all documents filed by both parties, as stated in the award, were taken on record and issues were decided.
Procedural History
Arbitral award dated 21.7.2021 passed by Sole Arbitrator. Appellant filed Arb.OP (Comm.Div) No.36 of 2022 under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside the award. Learned Single Judge rejected the petition on 26.04.2023. Appellant filed the present appeal under Section 37 of the said Act read with Clause 15 of Letters Patent and other provisions.
Acts & Sections
- Arbitration and Conciliation Act, 1996: 34, 37
- Commercial Courts Act, 2015: 13(1A)
- Letters Patent: Clause 15
- Original Side Rules: Order XXXVI Rule 9
