Appeal under section 37 of the Arbitration and Conciliation Act challenging a District Judge order setting aside a second arbitral award between former partners. Since an earlier award on the same dispute had become final after failed section 34 challenge and appeal, the court upheld setting aside the subsequent award and dismissed the appeal.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF ORISSA AT CUTTACK
ARBA No.39 of 2022
In the matter of an Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 assailing the judgment dated 9th September 2022 passed by the learned District Judge, Ganjam in Arbitration Petition No.09 of 2009.
Harihar Panda …. Appellant
-versus-
Bhabani Charan Samantara …. Respondent
Appeared in this case by Hybrid Arrangement
(Virtual/Physical Mode):
================================================
For Appellant - Mr. S.K. Swain,
Advocate.
For Respondent - Mr. Goutam Misra,
Senior Advocate.
CORAM:
MR. JUSTICE D. DASH
Date of Hearing : 19.01.2024 : Date of Judgment:29.01.2024
D.Dash, J. The Appellant, by filing this Appeal under section-37 of Arbitration and Conciliation Act, 1996 (for short, ‘The A & C Act’), has assailed the judgment dated 09.09.2022 passed by the learned District Judge, Ganjam in Arbitration Petition No.09 of 2009 in the matter of an Application under section-34 of the A & C Act.
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2. The parties to this Appeal are the parties to a deed of partnership dated 29.08.1998 and were carrying of business in the name of M/s. B.H. Enterprisers having franchise dealership in the Asian Sky Shop at Berhampur on the terms as long as continue from 29th August 1998.
A dispute having arisen, as provided in clause-21 of the deed of partnership an Arbitrator has been appointed and he finally passed an award in the said Arbitration Case No.01 of 2004. Said award was thereafter challenged by the present Appellant under section-34 of the A & C Act by carrying an Application which stood numbered as Arbitration case No.06 of 2006. The Application was dismissed and the said award prevailed for being enforced under section-35 of the A & C Act. The present Appellant having further carried the matter to this Court in an Appeal under section-37 of the A & C Act numbered as ARBA No.14 of 2007, this Court dismissed the Appeal.
In the meantime, Arbitrators have again been appointed, they sat over the matter afresh. The Respondent in that subsequent arbitral proceeding had questioned constitution of the Arbitral Tribunal for fresh arbitration on the ground that once, Arbitral Tribunal having finally passed the award, the subsequent Arbitral Proceeding is not permissible. But that being not considered when again an award was passed, the
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Respondent challenged the same by filing Application under section-34 of the A & C Act before the learned District Judge, Ganjam and that being numbered as Arbitration Petition No.09 of 2009 has been allowed which is now under challenge in this Appeal.
3. Heard Mr. S.K. Swain, learned Counsel for the Appellant and Mr. Goutam Misra, learned Senior Counsel for the Respondent at length. Perused the case record including the impugned judgment as well as the award passed in the Arbitral Proceedings.
It was submitted by the learned Counsel for the Appellant that since the appointment of the Arbitrator during the first Arbitral Proceeding was not in consonance with the clause-21 of the deed of Partnership, the award passed in that First Arbitral Proceeding is nonest in the eye of law. Therefore, according to him, when the second Arbitral Tribunal has been duly constituted in consonance with the clause-21 of the deed of Partnership, the award passed therein could not have been set aside on the ground of existence of the first Arbitral award which in fact is not visible in the eye of law.
4. Learned Senior Counsel for the Respondent submitted that it was always open for the Appellant to call in question, the competency of the first Arbitral Tribunal in that Arbitral
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Proceeding, itself before the Arbitrator and the law provides that in the event such decision goes against the objection as to the competency, the same would also arise for consideration in an Application under section-34 of the A & C Act, if so, carried by the party who had raised such objection when so raised as a ground to set aside award. The Appellant having not taken recourse to that, when his challenge to the earlier award under section-34 has failed and Appeal being carried, that has also not been dismissed, the subsequent Arbitral Proceeding has no legal foundation and therefore, the award passed therein has been rightly set aside by the learned District Judge on application filed by this Respondent.
5. It appears that in this Arbitration Proceeding Case no.01 of 2005, the Respondent had filed an application under section-16 of the A & C Act challenging the jurisdiction of the Arbitrators. The said petition was rejected on 01.02.2009. So, when the Respondent filed an application under section-34 of the A & C Act challenging the final award passed in that Arbitration Case No.01 of 2005, that lack of jurisdiction on the part of the Arbitrators and their competency were also projected as the grounds.
6. Undisputed position is that prior to the initiation of Arbitration Case No.01 of 2005, Arbitration Case No.01 of 2004
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had been initiated and there the Arbitrator had passed an award. That award had been challenged by the present Appellant by carrying application under section 34 of the A & C Act. Said application being dismissed refusing to entertain the application under section 34 of the A & C Act in view of the bar contained for such entertainment after the period of limitation prescribed under section 34 of the A & C Act, the Respondent had carried an appeal under section 37 of the Act in Arbitration Appeal No.14 of 2007 before this Court which too has been dismissed vide order dated 15.03.2019. So, the earlier award has attained finality and is thus enforceable.
On these obtained facts, the objection raised by the Respondent as to the jurisdiction and competency of the Arbitral Tribunal in proceeding with Arbitration Case No.01 of 2005 has to sustain and it has been rightly so favoured by the Court below by setting aside the award which has been passed in Arbitration Case No.01 of 2005. The impugned judgement, therefore, has to sustain.
7. In the result, the Appeal stands dismissed. No order as to cost.
Signature Not Verified
Digitally Signed Signed by: NARAYAN HO Reason: Authentication Location: OHC Narayan Date: 09-Feb-2024 10:57:17
(D. Dash), Judge.
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2 issues framed by the court
Whether the second arbitral award could stand when an earlier award on the same dispute had attained finality under sections 34 and 37 of the A&C Act.
Whether the objection to jurisdiction of the arbitrators in the second arbitration had to sustain given the prior award's finality.
4 provisions across 1 enactments
Harihar Panda
Bhabani Charan Samantara
D. Dash
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
