Disputes have arisen between three brothers namely; Shri A, Shri K and Shri M. All three are sons of late Shri S.N. The three brothers were engaged in joint business in three partnership firms namely; M/s VE, M/s VSE and
CS Professional · Arbitration, Mediation and Conciliation · PYQS · December 2024
Disputes have arisen between three brothers namely; Shri A, Shri K and Shri M. All three are sons of late Shri S.N. The three brothers were engaged in joint business in three partnership firms namely; M/s VE, M/s VSE and M/s. K Brothers. The shares of the brothers vary in each of the firms. The named Arbitrator, Shri B. S. Gupta, entered reference and passed four Awards, Award No. 1 dated 12th May, 2007, Award No. 2 dated 28th May, 2007, Award No. 3 dated 8th June, 2007 and Award No. 4 dated 13th July, 2007. Some other documents including a draft MOU were also drawn up by the Arbitrator but the said documents are not admitted by some of the parties. Ms. Isha Aggarwal appearing for the Petitioner submits that the third Award was not in the knowledge of the Petitioner at the time of filing of the present petition. She further submits that the arbitration proceedings were conducted in a completely ad hoc and haphazard manner. No hearings were held, and no evidence was led before the Arbitrator. The Arbitrator in fact did not conduct any adjudication in accordance with law. All the four Awards have been simply passed on the basis of the documents/pleadings filed by the parties. It is her case that even self-acquired properties of the Petitioner which are in the name of the Petitioner/his family members have been wrongly included in the common hotchpotch. It is submitted that the shares of the parties have also been wrongly determined. Decide the matters with reference to case law and comment whether an arbitral award can be set aside on the ground that parties were not given a chance to be heard.
Answer & Explanation:
The facts of the given situation are similar to the case of Adarsh Kumar Khera (Petitioner) vs Kewal Kishan Khera And Ors. (Respondents) , decided on 16 January, 2019. In this case, the Court has heard the submissions on behalf of the parties. A perusal of the various Awards passed by the learned Arbitrator shows that the Arbitrator has decided the matter simply on the basis of the statement of claims made by all the parties. Though the Arbitrator is not bound by the strict provisions of the Civil Procedure Code, 1908 (CPC), each of the parties ought to have been given an opportunity to respond to the case set up by the other, which is a basic feature in any arbitration proceedings. The Respondents submit that even though some properties may be in the name of the Petitioner, or his family members, the same have been purchased from the profits earned by the common businesses. This contention is disputed by learned counsel for the Petitioner, who has objected to the inclusion of the properties which belong to either him and his wife/son. The question as to which of the properties need to be considered as properties of the firms. On this issue, the learned Arbitrator, after hearing the parties, would have to adjudicate the shares of each of the partners. This has clearly not been done by the learned Arbitrator. All parties agree that the four Awards dated 13th July, 2007, 12th May, 2007, 28th May, 2007 and 8th June, 2007 be set aside. The said Awards are accordingly set aside. The learned Arbitrator would be free to determine as to which of the properties is to be included in the common pool for being divided, the valuation of all movable/immovable assets of the firms, liabilities of the firms and adjustments to the given, the share of each of the parties, the manner of sale of any of the properties including the market rates thereof, the manner of disbursement of the various amounts due to the respective parties and all other issues which may arise during the course of the arbitration proceedings. Owing to the age of all the brothers and considering the fact that this petition has remained pending before this Court since 2007, it is directed that the learned Arbitrator would endeavour to conclude the proceedings within a period of 6 months from the date of filing of claims by all the parties. The arbitral award was set aside since it was made without giving the parties a chance to be heard which is against the principles of natural justice and contrary to the section 18 of the Act which is a non-obstante clause, it was deemed void, and both parties wanted it overturned. The arbitral award was set aside since it was made without giving the parties a chance to be heard, it was deemed void, and both parties wanted it overturned. In view of the above mentioned case, it may be said that an arbitral award can be set aside on the ground that parties were not given a chance to be heard.
Topics: Arbitral Award Setting Aside
Related Questions in this Topic
- T Ltd. (Respondent) awarded a tender for the development of Kolkata Port, to P Pvt. Ltd. (Appellant) for 30 years on a b...
- Buddhi Mediation Associates is a firm consisting of 80 mediators. Out of these, 25 Mediators have more than 15 years of ...
- In Zoya Soft Limited, a mid-sized organization, conflicts have arisen between two project teams leading to frequent dela...
- Analyse the validity of the following with reference to the Companies (Mediation and Conciliation) Rules, 2016: Sumu, a...
- Analyse the validity of the following with reference to the Companies (Mediation and Conciliation) Rules, 2016: Nirma, ...