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TMI Blog2024 (5) TMI 844X X X X Extracts X X X X X X X X Extracts X X X X ..... s do not make such a request. It is the duty of the Arbitral Tribunal to adjudicate upon the dispute referred to it. If, on a date fixed for a meeting/hearing, the parties remain absent without any reasonable cause, the Arbitral Tribunal can always take recourse to the relevant provisions of the Arbitration Act, such as Section 25; c. The failure of the claimant to request the Arbitral Tribunal to fix a date for hearing, per se, is no ground to conclude that the proceedings have become unnecessary; and d. The abandonment of the claim by a claimant can be a ground to invoke clause (c) of subsection (2) of Section 32. The abandonment of the claim can be either express or implied. The abandonment cannot be readily inferred. There is an implied abandonment when admitted or proved facts are so clinching that the only inference which can be drawn is of the abandonment. Only if the established conduct of a claimant is such that it leads only to one conclusion that the claimant has given up his/her claim can an inference of abandonment be drawn. Even if it is to be implied, there must be convincing circumstances on record which lead to an inevitable inference about the abandonment. Only be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he suit filed by Sheil was disposed of by referring the dispute in the said suit to the same sole Arbitrator. Thus, the Arbitral Tribunal had to deal with the claims filed by Sheil and Marico, both against the first appellant. Both Sheil and Marico filed their respective statements of claim. It appears that the arbitral proceeding based on Marico's claim was heard earlier, culminating in an award on 6th May 2017. For whatever reasons, the arbitral proceeding based on the claim filed by Sheil did not proceed. 4. The first appellant addressed a communication to the Arbitral Tribunal on 26th November 2019, followed by another communication dated 7th January 2020 requesting the Arbitral Tribunal to dismiss the claim of Sheil on the ground that the company had abandoned the claim. In response, the Arbitral Tribunal fixed a meeting on 11th March 2020. As Sheil did not attend the meeting, the next meeting was fixed on 18th March 2020. The meeting scheduled for 18th March 2020 was not held. Due to the COVID19 pandemic, the next meeting could be held only on 12th August 2020, when the Arbitral Tribunal directed the first appellant to file a formal application for dismissal of the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her pointed out that the Arbitral Tribunal attempted to ensure Sheil's participation in Marico s arbitration. After the award in the case of Marico, Sheil declined to attend the meeting held on 11th March 2020 by the Arbitral Tribunal. It is submitted that there is nothing on record to indicate that the arbitration based on Sheil s claim was to proceed after Marico's arbitration, and there is no material placed on record to that effect. He submitted that the Arbitral Tribunal had rendered a finding of fact on the stand taken by Sheil, which cannot be disturbed by the Court. He submitted that Sheil's plea that it was awaiting the decision in the Marico arbitration could not be accepted as the Arbitral Tribunal never indicated that the arbitration based on Sheil's claim would proceed only after the Marico arbitration was over. He submitted that Sheil took no interest in moving the Arbitral Tribunal for a long time since 2012. He submitted that the word unnecessary used in Section 32(2)(c) of the Arbitration Act will have to be widely or liberally interpreted. 7. Mr Shekhar Naphade, the learned senior counsel appearing for Sheil, contended that without recording a posi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the case may be, receive notice of their appointment in writing. 9. After the pleadings are complete, the next stage is of hearing. Subsection (2) of Section 24 provides that parties shall be given sufficient advance notice of any hearing or meeting of the Arbitral Tribunal for inspections of documents, goods or other property. 10. The issue of the parties' default is dealt with in Section 25 of the Arbitration Act. Section 25 reads thus: 25. Default of a party. Unless otherwise agreed by the parties, where, without showing sufficient cause, (a) the claimant fails to communicate his statement of claim in accordance with subsection (1) of section 23, the arbitral tribunal shall terminate the proceedings; (b) the respondent fails to communicate his statement of defence in accordance with subsection (1) of section 23, the arbitral tribunal shall continue the proceedings without treating that failure in itself as an admission of the allegations by the claimant and shall have the discretion to treat the right of the respondent to file such statement of defence as having been forfeited. (c) a party fails to appear at an oral hearing or to produce documentary evidence, the arbitral ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o do so. It is the duty of the Arbitral Tribunal to do so. If the claimant fails to file his statement of claim in accordance with Section 23, in view of clause (a) of Section 25, the learned Arbitrator is bound to terminate the proceedings. If the respondent to the proceedings fails to file a statement of defence in accordance with Section 23, in the light of clause (b) of Section 25, the learned Arbitrator is bound to proceed further with the arbitral proceedings. Even if the claimant, after filing a statement of claim, fails to appear at an oral hearing or fails to produce documentary evidence, the learned Arbitrator is expected to continue the proceedings as provided in clause (c) of Section 25. Thus, he can proceed to make an award in such a case. 13. On a conjoint reading of Sections 14 and 15, it is apparent that an Arbitrator always has the option to withdraw for any reason. Therefore, he can withdraw because of the parties' non-cooperation in the proceedings. But in such a case, his mandate will be terminated, not the arbitral proceedings. 14. Now, we come to Section 32 of the Arbitration Act, which reads thus: 32. Termination of proceedings. (1) The arbitral proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the absence of the claimant shows the legislature's intention that the claimant's failure to appear after filing the claim cannot be a ground to say that the proceedings have become unnecessary or impossible. 16. Therefore, if the party fails to appear for a hearing after filing a claim, the learned Arbitrator cannot say that continuing the arbitral proceedings has become unnecessary. Abandonment by the claimant of his claim may be grounds for saying that the arbitral proceedings have become unnecessary. However, the abandonment must be established. Abandonment can be either express or implied. Abandonment cannot be readily inferred. One can say that there is an implied abandonment when admitted or proved facts are so clinching and convincing that the only inference which can be drawn is of the abandonment. Mere absence in proceedings or failure to participate does not, per se, amount to abandonment. Only if the established conduct of a claimant is such that it leads only to one conclusion that the claimant has given up, his/her claim can an inference of abandonment be drawn. Merely because a claimant, after filing his statement of claim, does not move the Arbitral Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he arbitral proceedings based on the claim of Marico, any meeting or date was fixed by the learned Arbitrator for hearing the claim of Sheil. The first meeting on Sheil s claim was fixed on 11th March 2020 when COVID19 pandemic had already set in. 18. The application made by the first appellant under Section 32(2)(c) of the Arbitration Act, in short, raised the following contentions: a. Sheil did not bother to pursue its claim for eight years after filing the statement of claim; b. Sheil did not attend the meeting of 11th March 2020; c. Sheil attended the next meeting held on 12th August 2020 and informed the learned Arbitrator that it wished to press its claim and d. Sheil has abandoned its claim. 19. Sheil filed an affidavit in reply to the said application filed by the first appellant. In the reply, a contention has been raised that the reference filed by Marico was taken up first and therefore, till the award was made on 6th May 2017, there was no requirement on the part of Sheil to take any further steps. The affidavit of evidence of Mr. Sanjay Patel was affirmed on 16th April 2017 and was kept ready. Sheil has pleaded that there was a requirement to change its advocate. After ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the claim by the first appellant is not based on any documentary or oral evidence on record. The finding is entirely illegal. Such a finding could never have been rendered on the material before the Arbitral Tribunal. Thus, the learned Arbitrator committed illegality. 21. To conclude, a. The power under clause (c) of subsection (2) of Section 32 of the Arbitration Act can be exercised only if, for some reason, the continuation of proceedings has become unnecessary or impossible. Unless the Arbitral Tribunal records its satisfaction based on the material on record that proceedings have become unnecessary or impossible, the power under clause (c) of subsection (2) of Section 32 cannot be exercised. If the said power is exercised casually, it will defeat the very object of enacting the Arbitration Act; b. It is the Arbitral Tribunal's duty to fix a meeting for hearing even if parties to the proceedings do not make such a request. It is the duty of the Arbitral Tribunal to adjudicate upon the dispute referred to it. If, on a date fixed for a meeting/hearing, the parties remain absent without any reasonable cause, the Arbitral Tribunal can always take recourse to the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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