Flfl Travel Retail Lucknow Private vs Airports Authority Of India & Anr.
Court
NCLAT
Date of Judgement:
October 8, 2024
Citation:
Neutral: 2024:DHC:7800
Category:
Section 34
Facts:
Arbitrator failed to disclose his appointment by the respondent in another arbitration, during the pendency of the present arbitral proceedings.
Arbitrator receiving documents and clarifications from the respondent after the order was reserved, which were not copied to the petitioner and were considered without giving the petitioner an opportunity to respond to the same.
Findings:
Relied on judgment of the Supreme Court in Bharat Broadband Network Ltd. v. United Telecoms Ltd. and the Division Bench of this Court in Ram Kumar v. Shriram Transport Finance Co. Ltd., both of which deal with Section 12 of the Act. It may be noted that the Division Bench of this Court, interpreting Section 12(1) of the Act, has held that the requirement of disclosure is mandatory and not at the discretion of the arbitrator. The same position would, in my view, obtain with regard to the duty of continuous disclosure in Section 12(2) of the Act.
In any event, the requirement of disclosure extends not just to several appointments by the same party, but also by ""an affiliate of one of the parties"". The practical problem posed by treating a large organization in this way - that one department may not know about the appointments made by another - is a red herring, as the duty of disclosure, as held in Ram Kumar, is upon the arbitrator, and not upon the litigant. Petitioner's challenge on the ground of a violation of Section 12 of the Act, is liable to succeed.
Section 24(3) of the Act reflects a facet of natural justice, that a party must be given the materials supplied by the other party to the arbitral tribunal, and have an opportunity to respond. In the event the facts reveal a violation of Section 18 of the Act, same requires parties to be given a full opportunity to present their case
"26. I am inclined to agree with the petitioner's submission on this ground also. Section 24(3) of the Act reflects a facet of natural justice, that a party must be given the materials supplied by the other party to the arbitral tribunal, and have an opportunity to respond. Respondent No. 1 failed to adhere to this principle when it did not mark the e-mail in question to the petitioner. The learned arbitrator forwarded the documents to the petitioner almost three weeks after he received them, but did not consider it necessary to grant the petitioner more than one working day to consider the documents and respond. Such a procedure is unjustifiable, particularly when the documents in question were of over 30 pages, and encompassed several circulars.
27. The facts discussed above reveal a violation of Section 18 of the Act, which requires parties to be given a full opportunity to present their case. The award is, therefore, vitiated on this ground also."
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Delhi High Court: Section 24(3) of the Act reflects a facet of natural justice, that a party must be given the materials supplied by the other party to the arbitral tribunal, and have an opportunity to respond. Act of the Arbitrator violates Section 18 of the Act, which requires parties to be given a full opportunity to present their case.