CROSS EXAMINATION OF WITNESSES IN ARBITRAL PROCEEDINGS

[DR.MARIAPPAN GOVINDARAJAN]

Cross examination

A cross-examination is the act of the opposing party questioning the witness during a trial. Generally, a witness is initially questioned by the party who called them to the stand on direct examination. Afterwards, the opposing party can question the witness on cross-examination, often using targeted or leading questions (note that leading questions are not allowed during direct examination). Cross-examination gives the opposing party an opportunity to point out the weaknesses of a witness’s testimony, like holes in their story or a lack of credibility. However, the attorney conducting the cross-examination may not ask questions outside of scope of the direct examination. In other words, the attorney may not raise issues that go beyond the subject matter of the witness’s initial testimony. After the cross-examination, the party that called the witness to the stand may choose to conduct a redirect examination. For instance, in a trial it could go direct examination, cross-examination, and then redirect examination. 

Arbitral proceedings

The proceedings in arbitration are a summary trial without examining the witness and cross examination. While Section 19 of the Arbitration and Conciliation Act, 1996 dissociates itself from statutes like the Civil Procedure Code and the Indian Evidence Act, it has been pronounced that when the procedure in the Arbitration Act seems lacking, the principles of Civil Procedure Code will continue to apply.  The Indian arbitration regime has followed the common law methodology by allowing cross examination of witnesses to reduce the impact of the witness’s testimony on the case at hand.

Issue

The issue to be discussed in this article is as to whether the High Court can interfere in the decision of the Arbitral Tribunal not granting extension of cross examination of the witness with the decide case laws.

Case laws

In KELVIN AIR CONDITIONING AND VENTILATION SYSTEM PRIVATE LIMITED VERSUS TRIUMPH REALITY PRIVATE LIMITED - 2025 (1) TMI 413 - DELHI HIGH COURT, the High Court considered as to whether interference of the High Court on the order of the Arbitral Tribunal is warranted or not. The High Court gave some guidance in this regard-

• Interference is permissible only if the order is completely perverse i.e. that the perversity must stare in the face.
• High Courts ought to discourage litigation which necessarily interfere with the arbitral process.
• Excessive judicial interference in the arbitral process is not encouraged.
• It is prudent not to exercise jurisdiction under Articles 226/ 227.
• The power should be exercised in ‘exceptional rarity’ or if there is ‘bad faith’ which is shown.
• Efficiency of the arbitral process ought not to be allowed to diminish and hence interdicting the arbitral process should be completely avoided.

In SEROSOFT SOLUTIONS PVT. LTD. VERSUS DEXTER CAPITAL ADVISORS PVT. LTD. - 2025 (1) TMI 259 - SUPREME COURT, the appellant, in the present appeal, is a start up company. The appellant is providing educational software and related services. The respondent, in the present appeals, entered into a Client Service agreement with the appellant. The respondent is providing capital advisory services to various companies. Disputes arised between the parties on non-payment of fees for the services rendered. Since the same could not be resolved the provisions of arbitration in the contract are invoked.

The Arbitral Tribunal was constituted. The respective parties submitted the claim and defence before the Arbitral Tribunal. Vide their order dated 06.09.2023 the Arbitral Tribunal framed issues for its consideration. The respondent, who is the claimant in the arbitral proceedings produced two witnesses. The witnesses were cross examined by the appellant side on 17.11.2023. The cross examination could not be completed on that day.  Therefore, it was extended in another day 21.11.2023. On that day the cross examination of first witness was completed. On the same day, the cross examination of the second witness was started and was completed in two sessions.

After this the cross examination of the witnesses of the appellant was started. On 09.12.2023 the cross examination was started and the same was deferred to 10.02.2024. On that day cross examination was commenced and could not be completed. The respondent side sought for another hearing at least for one hour. The Arbitral Tribunal reluctantly granted time on 06.04.2024 for conclusion of the cross examination. But due to unavoidable reasons the hearing on 06.04.2024 was cancelled. The arbitration was in silence for six months with the consent of both the parties.

The proceedings were resumed on 01.10.2024. The cross examination was continued. The Arbitral Tribunal declared that the cross examination of the first witness was completed. The respondent, on 03.10.2024 moved an interim application with the prayer to extend the cross examination of the first witness. The Arbitral Tribunal rejected the submissions of the respondent and directed to put forth the final arguments and conclude the arbitral proceedings by November, 2024.

The respondent filed a writ petition before the High Court challenging the said order of the Arbitral Tribunal. The High Court, after hearing both the parties, directed the Arbitral Tribunal to grant further opportunity to the respondent/claimant to cross examine the first witness of the appellant.

Against the said order of High Court, the appellant filed the present appeal before the Supreme Court. The Supreme Court analysed the entire facts of the case and also analysed the documents and cross examinations. The Supreme Court observed that the legality and the propriety of the respondent/claimant’s application for further time to cross-examine the first witness was to be considered by the Arbitral Tribunal. In the arbitral proceedings the parties should be treated equally. Under Section 18 of the Arbitration and Conciliation Act, 1996 it is the statutory duty of the Arbitral Tribunal to ensure that the parties are treated with equality and each party is given full opportunity to present its case. At the same time, there is yet another statutory obligation, which is imposed on the judicial authorities. That is the statutory incorporation of judicial restraint in interfering with matters governed under Part I of the Act relating to arbitration agreement, composition and jurisdiction of Arbitral Tribunal, coupled with the conduct of the proceedings and making, challenge and enforcement of the award. This objection of restraint on the judicial authority is overriding and notwithstanding anything contained in any other law for the time being in force.

The Supreme Court observed that the Arbitral Tribunal has given full opportunities to the parties to the Arbitration that can be seen from the records. But it seems that the claimant has elaborately done cross examination did not satisfy itself to this. The Supreme Court further observed that when the Arbitral Tribunal by its order dated 09.10.2024 held - ‘that far and no further’, to the respondent/claimant’s endeavour to cross-examine the first witness, the High Court should have restrained itself from interfering. The interference is permissible only if the order is completely perverse i.e. that the perversity must stare in the face.  There is no perversity in the order of the Arbitral Tribunal.  The High Court observed that cross-examination is one of the most valuable and effective means of discovering the truth. The only enquiry required was whether there is denial of opportunity for an effective cross examination of the witness. There is absolutely no discretion about this aspect of the matter, except to say that in the facts and circumstances of the case and as an exceptional circumstance as well, the request of the respondent/claimant is excessive.

The Supreme Court found no justification in the order passed by the High Court in interfering with the directions of the Arbitral Tribunal holding that full and sufficient opportunity to cross-examine the first witness has already been given and no further extension of time is warranted.

The Supreme Court set aside the impugned order of the High Court and restored the arbitral proceedings with directions to concluded the same as expeditiously as possible.