Case Note & Summary
The dispute arose from a contract awarded to M/s. Narinder Singh and Sons by the Divisional Superintendent Engineer-II, Northern Railway, for additional washing lines at Jammu Tawi Railway Station. Following the termination of the contract in 1996 due to alleged non-performance, the appellant invoked the arbitration clause. The appointed arbitrator issued an ex parte award in favor of the appellant, which was later challenged by the respondent under Section 34 of the Arbitration and Conciliation Act, 1996. The Additional District Judge dismissed the objections, but the Punjab and Haryana High Court set aside the award, citing violations of natural justice and the arbitrator's haste. The Supreme Court, upon reviewing the case, agreed with the High Court's findings and noted that the respondent was not given a fair opportunity to present its case, leading to the conclusion that the award was in conflict with public policy. The court appointed a new arbitrator, Mr. Justice S.N. Aggarwal, to adjudicate the disputes, directing both parties to share the arbitration costs and ensuring that the proceedings would continue from the stage where the respondent could cross-examine the appellant's witness. The question of interest was left open for the new arbitrator to decide. The appeal was disposed of without costs.
Headnote
A) Arbitration - Ex Parte Award - Setting Aside - Arbitration and Conciliation Act, 1996, Section 34 - The court found that the arbitrator's ex parte award violated principles of natural justice as the respondent was deprived of a fair opportunity to present its case. The award was set aside on grounds of the respondent being unable to present its case and conflict with public policy. Held that the arbitration proceedings would continue with a newly appointed arbitrator (Paras 5-11).
Issue of Consideration
Whether the ex parte award should be set aside due to violation of natural justice and public policy.
Final Decision
The Supreme Court set aside the ex parte award and appointed Mr. Justice S.N. Aggarwal as the new arbitrator to adjudicate the disputes, directing both parties to share the arbitration costs and allowing the respondent to cross-examine the appellant's witness.
Law Points
- Arbitration
- natural justice
- ex parte award
- public policy
- appointment of arbitrator
