2003 (10) TMI 382 - SC - Companies Law

Whether once the appellant having accepted the award, is it open to him to challenge the same on the ground that the Arbitrator had no jurisdiction? Whether the Deputy General Manager (Materials) was competent or has jurisdiction to enter into an Arbitration? Held that - Appeal dismissed.

Summary

Issues:
1. Jurisdiction of the Arbitrator in the award acceptance challenge.
2. Competency of the Deputy General Manager (Materials) to enter into arbitration.

Analysis:

Issue 1: Jurisdiction of the Arbitrator in the award acceptance challenge
The appellant entered into an agreement with the respondent for construction work, leading to a dispute resolved through arbitration. The appellant accepted the award and received the due amount. However, he later objected to the jurisdiction of the Deputy General Manager (Materials) who acted as the Arbitrator instead of the General Manager. The Court rejected the objection, stating that by accepting the award without reservation, the appellant submitted to the Arbitrator's jurisdiction. The Supreme Court upheld this decision, emphasizing that the appellant's unequivocal acceptance of the award precluded him from challenging it later. The Court highlighted that if the appellant intended to challenge the award, he should have reserved his right to do so at the time of acceptance.

Issue 2: Competency of the Deputy General Manager (Materials) to enter into arbitration
The contract between the parties specified that disputes would be resolved through arbitration by the General Manager, with provision for the Deputy General Manager (Materials) to act if the General Manager was unable or unwilling. The appellant expressed concerns about receiving justice if the General Manager acted as the Arbitrator. Consequently, the Deputy General Manager (Materials) entered into the reference in accordance with the contract clause. The Supreme Court found no illegality in this decision, stating that the Deputy General Manager (Materials) was competent to arbitrate when the General Manager was unavailable. Therefore, the appellant's objection regarding the jurisdiction of the Deputy General Manager (Materials) was dismissed.

In conclusion, the Supreme Court dismissed the appeal, finding no merit in the appellant's arguments. The Court upheld the lower courts' decisions regarding the acceptance of the award and the competency of the Deputy General Manager (Materials) to act as the Arbitrator. The appeal was consequently dismissed, with no order as to costs.