TMI Blog2014 (9) TMI 1205X X X X Extracts X X X X X X X X Extracts X X X X ..... an award dated 15.12.2007 and directed the petitioners to pay ₹ 63,82,802/- and interest on ₹ 50,00,000/- at 14% from 11.08.2000 and cost of ₹ 52,959/-. To set aside the said award, the petitioners filed A.S.No.1/2008, under Section 34 of the Arbitration and Conciliation Act, 1996 ( Act for short), in the Court of District Judge at Mangalore. The first respondent having filed written statement, resisting the case, issues have been raised on 09.12.2009. The petitioners filed an application, under Section 151 of CPC, to permit adduction of evidence. The application having been objected to by the first respondent and the learned I Additional District Judge having passed an order of dismissal, on 02.06.2010, these writ petitions were filed, to quash the said order and allow the application. 2. Sri B.L.Sanjeev, learned advocate, contended that there being disputed facts in the case and based onthe pleadings of the parties, issues having been raised on 09.12.2009, the Court below has committed illegality in dismissing I.A. filed on 17.03.2010. He submitted that the I.A. has been mechanically dismissed, in disregard of the ratio of law in the case of Fiza Dev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the law for the time being in force; or (iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or (iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration: Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or (v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or (b) the Court finds that- (i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in the nature of an adversarial proceeding where a dispute between two parties requires adjudication by the Court; that there is a legal presumption in favour of the award being valid; and that whether the opposite party joins issue or not, theperson challenging the award has to make out one of the grounds enumerated under Section 34(2) of the Act and as a consequence held that there is no need for the Court to frame issues, as is done in a civil suit. Writ appeal filed there against having been dismissed as per the judgment reported in 2009 (6) Kar.L.J. 545, Apex Court, whenapproached for relief, after examining the scheme andprovisions of the Act and also the scope of proceedings under S.34 and also the effect of Rules 4 and 12 of the High Court of Karnataka Arbitration (Proceedings before the Courts) Rules, 2001, has held as follows: 17. The scheme and provisions of the Act disclose two significant aspects relating to courts vis- -vis arbitration. The first is that there should be minimal interference by courts in matters relating to arbitration. Second is the sense of urgency shown with reference to arbitration matters brought to court, requiring promptness in dispo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not intervene except where so provided in this Part. Pursuant to this policy, Section 34 imposes certain restrictions on the right of the court to set aside an arbitral award. It provides, in all, seven grounds for setting aside an award. In other words, an arbitral award can be set aside only if one or more of these seven grounds exists. The first five grounds have been set forth in section 34(2)(a). In order to successfully invoke any of these grounds, a party has to plead and prove the existence of one or more of such grounds. That is to say, the party challenging the award has to discharge the burden of poof by adducing sufficient credible evidence to show the existence of any one of such grounds. The rest two grounds are contained in section 34(2)(b) which provides that an award may be set aside by the court on its own initiative if the subject-matter of the dispute is not arbitrable or the impugned award is in conflict with the public policy of India. The grounds for setting aside the award are specific. Therefore, necessarily a petitioner who files an application will have to plead the facts necessary to make out the ingredients of any of the grounds me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f failure to file a defence, it will be lawful for the court to pronounce the judgment on the basis of facts contained in the plaint [Vide Order 8 Rule 5(2) of the Code]. But in an application under Section 34, even if there is no contest, the court cannot, on the basis of the averments contained in the application, set aside the award. Whether there is contest or not, the applicant has to prove one of the grounds set out in Sections 34(2)(a) and (b). Even if the applicant does not rely upon the grounds under clause (b), the court, on its own initiative, may examine the award to find out whether it is liable to be set aside on either of the two grounds mentioned in Section 34(2)(b). It is perhaps in this sense, the High Court has stated that the proceedings may not be adversarial. Be that as it may. 30. Having regard to the object of the Act, that is providing an expeditious alternative binding dispute resolution process with minimal court intervention, it is difficult to envisage proceedings under Section 34 of the Act as full-fledged regular civil suits under the Code of Civil Procedure. 31. Applications under Section 34 of the Act are summary proceedings with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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