Case Note & Summary
The appeal before the High Court of Karnataka at Dharwad arose from a dispute between a land developer and landowners regarding development of a residential layout named RVP City near Kanbargi Road, Belagavi. The appellant, a private limited company, had entered into a Joint Venture Agreement dated 17.04.2016 with the landowners for development of land bearing various R.S. numbers, with sharing of developed plots and a timeline of 24 months plus a six-month grace period. After the death of one landowner, disputes arose, and the remaining landowner issued a stop-work letter dated 17.11.2017 and demanded damages of Rs.1,01,83,435. The dispute was referred to a nominee arbitrator, who conducted proceedings and passed an award dated 28.01.2019 directing the appellant to pay Rs.2,21,58,000 with 18% interest, Rs.25,00,000 compensation with 18% interest, terminating the Joint Venture Agreement and General Power of Attorney, and directing compliance with RERA and handover of documents. The appellant challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996 before the Principal District Judge, Belagavi in Arbitration Petition No.2/2021. The District Court framed the issue whether any grounds under Section 34(2) or 34(2A) were made out and answered it in the negative, dismissing the petition on 22.04.2022. The appellant then filed Miscellaneous First Appeal No.103181 of 2022 under Section 37(1)(b) challenging the dismissal. The appellant raised contentions including that the Joint Venture Agreement provided for two arbitrators and an umpire, that the sole arbitrator was appointed contrary to procedure, that the District Court erroneously held the appellant had foregone its right by not naming an arbitrator within thirty days, that consent to sole arbitrator was wrongly inferred, that the KLS-GIT report was prepared ex parte and could not be relied upon, and that the award of interest and compensation exceeded the arbitrator's jurisdiction. The District Court had recorded that the appellant failed to appoint its arbitrator within thirty days, Section 10(2) permitted a sole arbitrator, and participation without objection constituted waiver. The court also held that non-filing of a formal claim petition was not fatal, reliance on the KLS-GIT report was permissible unless rebutted, and no evidence supported the alleged incapacity. The available judgment text does not include the High Court's final operative order, as it ends while narrating the appellant's contentions.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Validity of Sole Arbitrator - Arbitration and Conciliation Act, 1996, Section 10, Section 34, Section 37 - The Joint Venture Agreement provided for two arbitrators and an umpire, but the appellant failed to appoint its nominee within thirty days; the District Court held that Section 10(2) permitted appointment of a sole arbitrator and the appellant waived its right by participating without objection. Held that the arbitral proceedings were not vitiated by the procedure adopted (Paras 1-10).
B) Arbitration Law - Grounds for Setting Aside Award - Section 34(2) and 34(2A) - Arbitration and Conciliation Act, 1996 - The District Court rejected contentions regarding lack of party status of respondent no.1, failure to file formal claim statement, reliance on KLS-GIT report, and alleged incapacity of the petitioner; it found no material to show any ground under Section 34(2) or 34(2A) was made out. Held that the award could not be set aside on these grounds (Paras 7-9).
Issue of Consideration
Whether the appointment of a sole arbitrator by one party was valid when the Joint Venture Agreement provided for two arbitrators and an umpire; whether the appellant waived its right to appoint an arbitrator; whether the District Court erred in relying on the KLS-GIT report; whether any grounds under Section 34(2) or 34(2A) of the Arbitration and Conciliation Act, 1996 were made out.
Law Points
- Arbitration agreement interpretation
- appointment of sole arbitrator under Section 10(2) when party fails to nominate within 30 days
- waiver of right to object to tribunal constitution by participation
- limited grounds for setting aside award under Section 34(2) and 34(2A)
- reliance on technical report permissible unless rebutted by cogent evidence
- no reappraisal of evidence under Section 34
Case Details
2026 LawText (KAR) (08) 99
Miscellaneous First Appeal No. 103181 of 2022 (AA)
S.Sunil Dutt Yadav, K.G.Shanthi
NC: 2026:KHC-D:14276-DB, CNR: KAHC020126132022
S.S. Naganand, Senior Counsel for S.B. Hebballi; Anant Mandagi, Senior Counsel for Mrutyunjaya Tata Bangi
Lotus Landmarks (India) Pvt. Ltd., represented by its Director, Shri Dilip s/o Premaraj Chandak
RVP City Owners represented by Shri Shrinivas R. Pavuskar; Shri Shrinivas s/o Ramakrishna Pavuskar; Shri Eknath s/o Ramakrishna Pavuskar; Smt. Vaishnavi w/o Pradeep Pavuskar; Shri Suryanand s/o Pradeep Pavuskar; Shri Sandeep s/o Pradeep Pavuskar; Miss. Aishwarya d/o Pradeep Pavuskar; Arbitrator Shri Mallikarjun S. Mudnur
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Nature of Litigation
Appeal under Section 37(1)(b) of Arbitration and Conciliation Act, 1996 against dismissal of Arbitration Petition No.2/2021 which sought to set aside arbitral award dated 28.01.2019.
Remedy Sought
Appellant sought to set aside the order dated 22.04.2022 passed by Principal District Judge, Belagavi and set aside the arbitral award dated 28.01.2019, and reject the claim petition filed by respondents.
Filing Reason
The sole arbitrator passed award directing appellant to pay Rs.2,21,58,000 plus Rs.25,00,000 compensation with 18% interest and terminated JV Agreement; District Court dismissed Section 34 petition, prompting appeal.
Previous Decisions
Arbitral award dated 28.01.2019 by sole arbitrator; District Court order dated 22.04.2022 in Arbitration Petition No.2/2021 dismissing petition under Section 34.
Issues
Whether the appointment of sole arbitrator by one party was valid when the Joint Venture Agreement provided for two arbitrators and an umpire.
Whether the appellant waived the right to appoint its arbitrator by failing to do so within 30 days and participating in proceedings.
Whether the District Court erred in relying on KLS-GIT report prepared without notice.
Whether award of interest and compensation was in excess of jurisdiction conferred by Joint Venture Agreement.
Whether grounds under Section 34(2) or 34(2A) were made out.
Submissions/Arguments
Appellant contended that appointment of sole arbitrator by respondent was contrary to Joint Venture Agreement which required two arbitrators and an umpire.
Appellant contended that the District Judge erroneously held that failure to name arbitrator within 30 days resulted in forfeiture of right and sole arbitrator was empowered under Section 10.
Appellant contended that the finding of consent to sole arbitrator proceedings was incorrect and contrary to record.
Appellant contended that KLS-GIT report was prepared behind its back and without notice and should not have been relied upon.
Appellant contended that award of interest and compensation was in excess of jurisdiction conferred by Joint Venture Agreement.
Ratio Decidendi
Where an arbitration agreement provides for two arbitrators but a party fails to appoint its nominee within the prescribed 30 days, Section 10(2) of the Arbitration and Conciliation Act, 1996 permits appointment of a sole arbitrator; participation in proceedings without objection constitutes waiver of the right to object to constitution of tribunal; under Section 34, court cannot reappraise evidence and reliance on technical report is permissible unless rebutted by cogent evidence.
Judgment Excerpts
The present appeal is by M/s. Lotus Landmarks (India) Pvt. Ltd., calling in question the order dated 22.04.2022 passed in Arbitration Petition No.2/2021 by the Prl. District Judge, Belagavi filed under Section 34 of the Arbitration and Conciliation Act, 1996.
The said issue was held in the negative and the petition was dismissed.
From a perusal of the agreement, if the arbitrators are not appointed within the time limit outlined in the clause, the arbitrator shall be appointed in accordance with the Arbitration and Conciliation Act (Section 10 of the same).
Procedural History
Arbitration commenced by respondent's nominee; sole arbitrator passed award dated 28.01.2019; appellant filed Arbitration Petition No.2/2021 under Section 34 before Prl. District Judge, Belagavi; District Court dismissed petition on 22.04.2022; appellant filed MFA No.103181 of 2022 under Section 37(1)(b); appeal heard on 16.07.2026 and judgment pronounced on 31.08.2026.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 10, Section 34, Section 34(2), Section 34(2A), Section 37(1)(b)
- RERA:
