Allowed

The Municipal Corporation of Greater Mumbai, v. M/S. Angerejmer Strictiras and Civil Engineering Co.

Bombay HC10 Jul 2013APP/89/2013

Case brief

AI extract

What is this about?

In an appeal against a Single Judge order quashing an arbitration award and remanding the matter, the Division Bench relied on Geojit Financial Services. It held that Section 34(4) does not allow remand post-set-aside. The Single Judge order quashing the award was set aside, and the arbitration petition was restored for fresh consideration.

What did the court decide?

The impugned Single Judge order dated 1 October 2012 was set aside. Arbitration Petition No. 162 of 2009 was restored for fresh consideration.

The Municipal Corporation of Greater Mumbai, Vs M/S. Angerejmer… — Arbitration | Bombay HC (2013)

app 89-2013

1/5

sat

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

¶5

APPEAL NO. 89 OF 2013 IN

¶6

ARBITRATION PETITION NO. 162 OF 2009

¶7

The Municipal Corporation of Greater Mumbai

¶8

vs M/s.Angerlehner Structurals & Civil Engineering Co.

¶9

...Appellant

¶10

..Respondent

¶11

Mr.Kevic Setalwas, learned AG with Daisy Dubash i/b. Mr.R.A. Malandkar with Mr.H.C. Pimple for the Appellant. Mr.Zal Andhyarujinha with Mr.Duhita Lewis i/b. Mr.Javed Gaya for the Respondent.

¶12

CORAM : DR.D.Y.CHANDRACHUD, AND S.C. GUPTE, JJ.

¶13

10 JULY 2013

¶14

P.C. :

¶15

The Appeal arises from a judgment of Mr.Justice Anoop V. Mohta on a petition under Section 34 of the Arbitration and Conciliation Act. An arbitral tribunal consisting of three members rendered an arbitral award on 11 July 2007. Two members of the arbitral tribunal joined together in an award of a majority whereas the third member dissented.

¶16

2 An arbitration petition was filed by the Respondent under Section 34 which was decided by the learned Single Judge by the impugned judgment dated 1 October 2012. The conclusion which has been arrived at by the learned Single Judge may be extracted, for the purposes of this appeal, from the impugned order which reads as follows:

¶17

“ The conclusion, therefore, given by the majority Arbitrator in this matter, by overlooking the

app 89-2013

2/5

sat

similarly placed award. The party, one who makes a positive statement referring to interpretation of the clauses, if failed to prove the same and/or failed to support the same, this destroy their own case. This supports the claimant's case that the agreed formula was intended for all the purposes. The majority Arbitrator, therefore, in my view, committed an error in rejecting the claim of the Petitioners.

¶22

30 Considering overall view of the matter and the award so placed on record, "M/s. AJECT", the minority view required to be maintained. But under the Arbitration Act the Court, under Section 34, nowhere permitted to accept the minority view, in such manner. The challenge under Section 34 Petition is always to the majority award, therefore, to set aside the majority award itself, in no way means acceptance of the minority award in the present case. In such situation, the appropriate order will be to remand the matter for re-consideration on all points.”

¶23

The operative order which has been passed by the learned Single Judge

¶24

is thus;

¶25

ORDER

¶26

“a) The impugned majority award dated 11 July 2007 is quashed and set aside, except the award of cost.

¶27

b) The matter is remanded back for reconsideration, by giving opportunity to the parties.

¶28

c) All points are kept open.

¶29

d) The hearing is expedited.

¶30

e) The parties to take steps accordingly.

¶31

f) The Petition is accordingly allowed partly.

¶32

g) There shall be no order as to costs.”

¶33

While setting aside the award, the learned Single Judge has

app 89-2013

3/5

sat

remanded the matter “for reconsideration on all points” and has specifically kept all points open. In the recent judgment of a Division Bench of this Court in Geojit Financial Services Limited vs. Kritika Nagpal¹ delivered on 25 June 2013, this Court considered the ambit of the power of the arbitral tribunal under Section 34(4) of the Arbitration and Conciliation Act, 1996. Section 34(4) reads as follows;

¶39

"34. Application for setting aside arbitral award.-

¶40

(4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award."

¶41

The Division Bench has observed thus:

¶42

Under sub-section 4 of Section 34, the Court is vested with the discretion, where it is appropriate and where the court is requested by a party, to adjourn the proceedings for a period of time. An adjournment is granted in order to furnish the arbitral tribunal with an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of the Tribunal will eliminate the grounds for setting aside the award. Subsection 4 of Section 34, therefore, does not contemplate a situation where the proceedings are remanded back to the arbitrator after setting aside the arbitral award. Once an arbitral award is set aside under Section 34, that brings to a conclusion a proceeding before the Court. What sub-section 4 of Section 34 envisages is an opportunity to the arbitral tribunal to resume the arbitration proceedings or to take such other action as would eliminate the grounds for setting aside the award. Without meaning to be exhaustive, we can conceive of a situation where the arbitral tribunal has overlooked a particular item of claim on which parties have led evidence and have addressed arguments. A challenge

¶43

1 Appeal 35/2013 together with Appeals 33, 34, 36 and 41/2013

app 89-2013

4/5

sat

to the arbitral award in such a case would be on the ground that the arbitral tribunal has failed to decide a claim which was raised, controverted and submitted upon. The provisions of Section 34 enable the Court to adjourn the petition under Section 34 so that instead of setting aside the award, the arbitral tribunal can resume the proceedings and take necessary steps to eliminate a ground of challenge. Section 34(4), however, does not contemplate or vest a power in the Court to remand proceedings back to the arbitral tribunal once the Court has set aside the award. Once an award has been set aside, recourse cannot be taken to Section 34(4) since it is evident that the power can be exercised by the Court while adjourning a petition under Section 34.

¶48

The jurisdiction under Section 34(4) can be exercised in a manner which is strictly consistent with that provision. The equitable jurisdiction which the Court exercises under Article 226 of the Constitution is clearly inapposite when dealing with a petition under Section 34. The learned Single Judge has relied upon his earlier decision in Angel Capital and Debt Market Limited Vs. Sharad Munot² , which seems to suggest that the Court has while setting aside an award a general power to remand the proceedings for reconsideration. We clarify that this would not reflect the correct position in law.”

¶49

4 In the present case, the judgment of the learned Single Judge indicates that the Court expressed a view on the merits of the challenge to the arbitral award but did not finally decide all the questions since the proceedings were remanded back to the arbitral tribunal for reconsideration of all points. In view of the decision in Geojit Financial Services Limited vs. Kritika Nagpal (Supra) which construes the provisions of Section 34(4), the learned Single Judge was clearly in an error in remanding the proceedings to the arbitral tribunal.

¶50

5 In that view of the matter, we consider it appropriate to set aside the impugned order of the learned Single Judge dated 1 October 2012 and restore the Arbitration Petition under Section 34 to the file of the learned Single Judge

¶51

2 Arbitration Petition No.972 of 2009 decided on 31 August 2012

app 89-2013

5/5

sat

for fresh consideration. We clarify that since the learned Single Judge has not expressed a final view on the merits of the rival contentions in the petition under Section 34, we keep open all the rights and contentions of the parties to be urged before and decided by the learned Single Judge. To facilitate this, and for the reasons indicated above, we set aside the impugned order dated 1 October 2012 and restore Arbitration Petition No.162/2009 for fresh consideration. Since the petition pertains to the year 2009, we would request the learned Single Judge to take up the petition for disposal subject to the exigencies of the board.

¶56

6 The appeal is allowed in the aforesaid terms. There shall be no order as to costs.

¶57

7 In view of the disposal of the Appeal, Notice of Motion No.226 of 2013 in appeal does not survive and is accordingly disposed of.

The Municipal Corporation of Greater Mumbai, v. M/S. Angerejmer Strictiras and Civil Engineering Co.

Case brief

What is this about?

What did the court decide?

The Municipal Corporation of Greater Mumbai, v. M/S. Angerejmer Strictiras and Civil Engineering Co.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Kisan Agro Mart Pvt. Ltd. Vs Indian Overseas Bank

Dr. (Mrs.) Anjali Dilip Beke Vs Dr. (Mrs.) Sarojini Damodar Sathe and Ors.

Ashok Ravi Shankar Naval Vs Babubhai Thiba and Ors.

Surendra Narvekar Vs M/S. Kukreja Construction Company

Surendra Narvekar Vs M/S. Kukreja Construction Company

Meena U. Petkar Vs Bharat Petroleum Corportion Ltd.