2011 (3) TMI 1759 - HC - Indian Laws

Summary

Issues Involved:
1. Lack of opportunity to participate in the arbitration hearing.
2. Arbitrator exceeding the scope of reference.

Issue-wise Detailed Analysis:

1. Lack of Opportunity to Participate in the Arbitration Hearing:
The appellant contended that they were not given proper notice for the hearing on 24.06.2000, which affected their ability to present their case, thus violating Sec.34(2)(a)(iii) of the Arbitration and Conciliation Act, 1996. The court examined the proceedings and found that the appellant was aware of the hearing dates and had been given multiple opportunities to participate. Despite being present on 20.05.2000, the appellant chose not to stay for the hearing. Notices were sent for subsequent hearings, including the one on 03.06.2000. The court concluded that the appellant's claim of not having a reasonable opportunity to present their case was unfounded. The arbitrator's actions were consistent with the principles of natural justice, and the appellant's consistent non-appearance did not justify setting aside the award.

2. Arbitrator Exceeding the Scope of Reference:
The appellant argued that the arbitrator adjudicated claims beyond the scope of the Consignment Stockist Agreement dated 12.07.1997, which contained the arbitration clause, and included claims from the Stockist Agreement dated 01.08.1995, which did not have an arbitration clause. The court referred to Sec.16(3) of the Arbitration Act, which requires any plea that the arbitral tribunal is exceeding its authority to be raised promptly. The appellant failed to raise this objection during the arbitration proceedings. The court found that the agreements were interconnected and related to the same transactions and parties. The arbitration clause in the 12.07.1997 agreement covered disputes arising out of or in connection with the agreement, thus justifying the arbitrator's jurisdiction over the interconnected disputes. The court cited relevant case law, including the Supreme Court's decision in Olympus Superstructures Pvt. Ltd. v. Meena Vijay Khetan, to support its conclusion that the arbitrator did not exceed his jurisdiction.

Conclusion:
The court dismissed the appeal, affirming that the arbitrator provided adequate opportunities for the appellant to present their case and acted within the scope of the arbitration agreement. The appellant's failure to participate and raise timely objections did not warrant setting aside the award. The judgment emphasized the importance of cooperation in arbitration proceedings and upheld the arbitrator's comprehensive jurisdiction over interconnected disputes.