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2022 (2) TMI 88 - SC - Indian LawsFailure to adhere to the principles of natural justice - validity of Emergency Arbitrator’s Award - order passed under Section 17(2) of the Arbitration Act, in enforcement proceedings, is appealable under Section 37 of the Arbitration Act or not - HELD THAT:- The serious procedural errors were committed by the learned Single Judge. Natural justice is an important facet of a judicial review. Providing effective natural justice to affected parties, before a decision is taken, is necessary to maintain the Rule of law. Natural justice is usually discussed in the context of administrative actions, wherein procedural requirement of a fair hearing is read in to ensure that no injustice is caused. When it comes to judicial review, the natural justice principle is built into the rules and procedures of the Court, which are expected to be followed meticulously to ensure that highest standards of fairness are afforded to the parties. It is well known that natural justice is the sworn enemy of unfairness. It is expected of the Courts to be cautious and afford a reasonable opportunity to parties, especially in commercial matters having a serious impact on the economy and employment of thousands of people. Coming to the facts herein, the opportunity provided to the appellants herein was insufficient, and cannot be upheld in the eyes of law - Whenever an order is struck down as invalid being in violation of the principles of natural justice, there is no final decision of the case and fresh proceedings are left open. All that is done is to vacate the order assailed by virtue of its inherent defect. Such proceedings are not terminated and are usually remitted back. The contempt of a civil nature can be made out under Order XXXIX Rule 2A CPC not when there has been mere “disobedience”, but only when there has been “wilful disobedience”. The allegation of wilful disobedience being in the nature of criminal liability, the same has to be proved to the satisfaction of the court that the disobedience was not mere “disobedience” but “wilful” and “conscious”. A disconcerting aspect wherein the interim order enforcing the Emergency Award has adopted a standard beyond ‘prima facie view’, as required under law. It is expected of Courts to be cautious while making observations on the merits of the case, which would inevitably influence the Arbitral Tribunals hearing the matters on merit. The order dated 09.09.2021, imposed no bar on the High Court to adjudicate the issue concerning legality of the vacate application order by the Arbitral Tribunal. In our opinion, adjudication of the applications under Section 37(2), Arbitration Act filed by the appellants before the Delhi High Court are distinct from the earlier appeals filed before this Court - certain important questions of law concerning the effect of the award of an Emergency Arbitrator and the jurisdiction of an Arbitral Tribunal qua such awards arise in the present matter. Therefore, these matters need to be remitted back for adjudication on its own merits. Appeal allowed by way of remand.
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