Case: – Aman Hospitality Pvt Ltd v/s Orient Lites; FAO 222 of 2020
In a recent ruling, the Delhi High Court provided crucial insights into the limitations of challenging arbitral awards, emphasizing the significance of timely objections during arbitration proceedings.
The case involved a dispute arising from an agreement between a partnership firm specializing in lighting consultancy, manufacturing, and supply (the claimant) and an appellant, covering business transactions from 2012 to 2016. The disagreement stemmed from outstanding dues identified by the claimant, totaling Rs. 76,58,717, leading to a claim of Rs. 1,21,39,070, inclusive of interest. Efforts to amicably resolve the matter proved futile, prompting the claimant to invoke the arbitration clause within the supply orders. Subsequently, the court appointed an arbitrator. The arbitrator ruled in favor of the claimant, which the appellant then challenged under Section 34 of the Arbitration and Conciliation Act (A&C Act).
The Appellant contended that the arbitrator had exceeded the scope of reference by including certain payments for supplies made before the agreement’s execution date. Specifically, the Appellant highlighted the inclusion of 20 bills predating the agreement and argued that these should be excluded from the outstanding dues computation.
The Hon’ble Court held that a party cannot challenge an arbitral award on the grounds of the tribunal exceeding its reference scope if no objection was raised during the Arbitral proceedings. Furthermore, the Court stated that the decision of Arbitral Tribunal to include specific invoices in the claim could not be contested under Section 34 when no such objection was brought before the tribunal. Consequently, the Delhi High Court dismissed the appeal.
Author of this article:
Adv. Ravish Bhatt,
Partner, R&D Law Chambers,
Dual Qualified Lawyer Solicitor | International Tax Affiliate
Connect with Mr. Bhatt on Linkedin: https://www.linkedin.com/in/adit-ravishbhatt/
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