Appeal against arbitration Award
IN THE COURT OF HON’BLE DISTRICT JUDGE, DWARKA COURT,
NEW DELHI – 110075
In the matter of:
M/S Infovinity Systems Pvt Ltd
(Through its Director Mr. Prakash Khandelwal)
Mr. Sandeep Singh
Appeal against arbitration Award
APPLICATION UNDER SECTION 34 OF THE ARBITRATION & CONCILIATION ACT, 1996 TO SET ASIDE AWARD OF SOLE ARBITRATOR
BRIEF FACTS OF THE CASE
- The Applicant and the Respondent had entered into an agreement on 10.11.2010, in which the Arbitration Clause was as follows
“10.2 Alternative Dispute Resolution (ADR)
In case of any dispute, arbitrator will be assigned by Infovinity Systems Pvt Ltd.
10.2 Governing Law
This agreement shall be governed by and construed in accordance with the laws of the State of Madhya Pradesh exclusive jurisdiction and venue shall be in the Indore, Madhya Pradesh Superior Court.”
- The Respondent sent a notice dated 23.09.2011, asking Applicant to refund the amount paid by him within 15 days. The Applicant replied on 01.10.2011, requesting the Respondent to pay the balance amount and also specified in Para 15 of the reply that in case the Respondent did not pay the balance amount, the Applicant shall be compelled to assign a Arbitrator and jurisdiction shall be at Indore, as per agreement.
- On receipt of reply, the Respondent immediately appointed a Sole Arbitrator on 03.10.2011. The Applicant again reminded in his reply dated 06.10.2011, addressed to Respondent and the Hon’ble Arbitrator, that Respondent has no authority to appoint the Arbitrator as per agreement and they should not proceed with voidable arbitration.
- The Hon’ble Arbitrator ignored the reply of Applicant and sent a letter dated 19.12.2011, only to Applicant, stating that the Respondent has lodged his claims before him and directed the Applicant to file his reply on 30.12.2011 else ex-parte Award shall be passed.
- The Applicant again replied on 28.12.2011 to Hon’ble Arbitrator and the Respondent, stating that appointment of Hon’ble Sole Arbitrator by the Respondent is totally illegal & beyond the scope of arbitration agreement and also requested the Hon’ble Arbitrator to immediately stop posing as Sole Arbitrator and in continuance with the so called proceedings he shall render himself for legal action by the Applicant.
- After the exchange of aforesaid notices & replies, the Applicant received the notice on 31.08.2012, of this Hon’ble Court for execution of the Award dated 08.02.2012, filed by the Respondent.
GROUNDS FOR SETTING ASIDE OF AWARD
The Applicant may please be allowed to furnish following proof of objections to set aside the AWARD dated 08.02.2012, given by Sole Arbitrator, Hon’ble Sh. Gurcharan Singh Jugti, Advocate:–
(1) That, the arbitration agreement is not valid under the law to which the Hon’ble Arbitrator has subjected.
(i) The Hon’ble Arbitrator has written in Para 8 of the Award as follows:
“8. That, as per legal notice dated 23.09.2011, the Respondent was to appoint arbitrator as per Arbitration Clause. This option to appoint the arbitrator has not been exercised by the Respondent. The arbitration clause is a mutual agreement with unity of mind by both sides to the agreement and in that manner if a party does not go ahead with the arbitration clause, then the other party has a right to see settlement of dispute through arbitration. Failing to exercise the option by the Respondent, the claimant has a right to appoint the arbitrator.”
Sir, the above is not a clause of the valid agreement. Therefore, the Award given under this invalid clause is also invalid and is liable to be set aside U/Sec 34(2)(a)(ii) of the Arbitration & Conciliation Act, 1996 and it be set aside.
(2) That, the composition of arbitral tribunal and arbitral procedure was not in accordance with the agreement of the parties:-
(i) The Hon’ble Arbitrator writes in his Para 9 of the Award as follows:-
“9. That from the legal notice dated 23.09.2011 and its reply dated 01.10.2011, it has become absolutely clear that the Respondent in this case was not prepared and willing to appoint any arbitrator for settlement of the dispute through arbitration. The claimant in this case has appointed the undersigned as Sole Arbitrator for settlement of the dispute in this case.”
The fact is that, the Respondent had shown willingness to appoint Arbitrator in his reply dated 01.10.2011 saying that jurisdiction shall be at Indore. But the claimant on receipt of reply immediately appointed the Arbitrator at Delhi, without such an agreement. Therefore, the composition of arbitral tribunal and arbitral procedure was NOT in accordance with the agreement and therefore liable to be set aside U/Sec 34(2)(a)(v) of the Arbitration & Conciliation Act, 1996, and it be set aside.
(3) That, the Hon’ble arbitrator has mis-conducted in giving this Award as follows:
The Hon’ble Arbitrator violated the principles of natural justice by NOT conducting the arbitration proceedings according to the arbitration agreement and in accordance with the law of the land, as follows:
(A) That, the Hon’ble Arbitrator knew that there was a arbitration clause in the written agreement signed by both the parties and has referred to same in Para 8 of his award that Arbitrator is to be Appointed by the Applicant. But still he accepted the appointment and conducted the arbitration by violating Section 11(6)(a) of the Arbitration & Conciliation Act, 1996.
(B) That, the Hon’ble Arbitrator knew that his appointment may be challenged as there is NO unity of mind of both the parties due to replies of Applicant dated 06.10.2011 and 28.12.2012, but still he accepted the appointment and conducted the arbitration and also mentioned the same in Para 8 of the Award. Therefore, the Hon’ble Arbitrator totally ignored the grounds of challenge and violated Section 12 of the Arbitration & Conciliation Act, 1996.
(C) That, the Hon’ble Arbitrator knowingly did not send copy of Application of Claimant, Statements and documents presented by Claimant presented before the Hon’ble Arbitrator along with his notice dated 19.12.2011 to the Applicant. Therefore, the Hon’ble Arbitrator violated Section 24(3) of the Arbitration & Conciliation Act, 1996.
(D) That the Hon’ble Arbitrator was to send a copy of the Award to both the parties after the arbitration has been concluded as per law. But the Hon’ble Arbitrator has not sent the copy of the Award to the Applicant. Therefore, the Hon’ble Arbitrator has violated Section 31(5) of the Arbitration & Conciliation Act, 1996.
The above is a proof that the Award of Hon’ble Arbitrator contains decisions, beyond the scope of the submission to arbitration and therefore the Award given by such Hon’ble Arbitrator deserves to be set aside U/Sec 34(2)(iv) and it be set aside.
CLAIM FOR VEXATIOUS PROCEEDINGS
The Respondent, on 03.10.2011, without any authority to appoint Arbitrator has appointed the Arbitrator and lodged total claim of Rs.4,13,250/ ; interest @ 18% and compensation of Rs.15,00,000/- (as per letter dated 19.12.2011 received from the Hon’ble Arbitrator).
The Respondent, on 17.10.2011, in-spite of arbitration agreement, filed a case before the Consumer Disputes Redressal Forum, Janakpuri, New Delhi and claimed Rs.4,13,250/-; interest @ 18% and compensation of Rs.15,00,000/- and Litigation cost of Rs.35,000/-.
The Respondent is has lodged this a vexatious proceedings against the innocent Applicant due to which the Applicant had to spend Rs.30,000/- as cost of this proceedings alone.
The Applicant prays this Hon’ble Court to kindly:–
(A) Set aside the impugned Award dated 08.02.2012 given by the Hon’ble Sole Arbitrator Sh. Gurcharan Singh Jugti, Advocate.
(B) Award the cost for making vexatious claims as Rs.30,000/- in favour of the Applicant and against the Respondent.
(C) Pass any other orders as this Hon’ble Court may deem fit & proper in the present circumstances and in the interest of justice against the Respondent and in favour of the Applicant.
Raminder Singh Sahota
At: New Delhi
Dated: ____ October, 2012