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Judgment
S.C. Dharmadhikari, J.—This appeal, stated to be the one u/s 37(1)(b) of the Arbitration and Conciliation Act, 1996, impugns an order passed by the Principal District and Sessions Judge, South Goa, at Margao on 25th August, 2011 in Arbitration Application No.7/2011. Incidentally, it must be stated that Arbitration Application No.7/2011 impugned and challenged an order of the learned arbitral Tribunal dated 25th April, 2011, rejecting an application filed for amendment of the written statement by the appellant-applicant before me.
Upon query from the Court as to how this appeal would be maintainable, it is urged by Mr. Rajadhyaksha, learned Senior Counsel appearing on behalf of the appellant-applicant, that this is an Appellate Court which is authorised to hear appeals from the orders of the District Court and when the impugned order is one which refuses to set aside the arbitral award, then, this appeal is maintainable.
Essentially, therefore, the argument is that the order passed by the arbitral Tribunal on 25th April, 2011 partakes the character of an award or at least an interim award. Therefore, it was challenged by way of arbitration application before the Principal District and Sessions Judge, South Goa, at Margao. If it is capable of being so challenged and that the learned Judge has accepted the objection of the respondent to the maintainability of the said application and rejected it only on that ground, then, this Court is not precluded from entertaining the appeal.
In support of his submission that the order of the arbitral Tribunal is not to be seen by its form or label, but by substance, it is urged by Mr. Rajadhyaksha that the test as to whether the order of the arbitral Tribunal is an interim award or final award is that whether the same decides any right or claim of the party and whether thereafter, the arbitral Tribunal is rendered functus officio. If it is a final determination, not of a dispute, but of a right or claim of the party, then, whatever label is attached to the same, the said label and nomenclature will not control the ultimate character of the same. In the instant case, according to Shri Rajadhyaksha what the arbitral Tribunal has done is to reject the application for amendment of the written statement made by the appellant-applicant. That application is rejected by a cryptic order. The order of the arbitral Tribunal has been perused by me with the assistance of Mr. Rajadhyaksha and Mr. Nadkarni. It reads thus :
The application for amendment dated 25th January, 2011 made by the Respondents is hereby rejected. It is grossly delayed and we are not satisfied about its bonafides. We make it clear that the rejection of this application will not preclude the Ld. Counsel for the Respondents from raising pure questions of law based on the facts and documents existing on record as on 25th January, 2011, i.e. prior to this application. If necessary, we may give further reasons in this regard in the Award.
Mr. Rajadhyaksha, therefore, submits that the observations of the Tribunal that the rejection of the application will not preclude the appellant-applicant from raising pure questions of law based on the facts and documents existing on record as on 25th January, 2011, i.e. prior to the filing of the application for amendment, would not mean that the order cannot be styled as an award. Any clarification by the arbitral Tribunal or its indication that it may give further reasons in regard to the amendment application in the final award would not be decisive. If, every such observation or clarification would mean that the arbitral Tribunal has not finally decided the rights or claims of the parties, and has not been rendered functus officio, then, an order made during the course of the arbitral proceedings can never be termed as an interim award or as an award. That is not the intent of the legislature. Mr. Rajadhyaksha distinguished the judgments which are relied upon by the learned Principal District Judge and, in addition, has relied upon the decision of the Hon''ble Supreme Court in the case of Sanshin Chemicals Industry Vs. Oriental Carbons and Chemicals Ltd. and Others, . Mr. Rajadhyaksha has then contended that the definition of the term "award" in the Arbitration and Conciliation Act, 1996, is inclusive and an arbitral award is defined as including an interim award. Therefore, if not an award as understood ordinarily, namely a final award, the order passed by the arbitral Tribunal in this case can, safely, be termed as an interim award. It can, therefore, be urged that the application made by the appellant-applicant has been erroneously rejected.
Mr. Rajadhyaksha has then urged that there is an error apparent on the face of the record, inasmuch as what the learned Principal District Judge has done, is to exercise powers under Order VII, Rule 11 of the Code of Civil Procedure, 1908. That was to deal with an objection that the application preferred by the appellant-applicant is not maintainable. If that is so, then, the contents of the application alone are decisive and determinative. It was not permissible for the learned Principal District Judge to rely upon any material, save and except the contents of the application. The contents of the application also have not been referred to in their entirety. Picking and choosing one paragraph therefrom is not permissive and that is how even on this count the order is unsustainable in law and must be set aside. Mr. Rajadhyaksha has taken me through several works on Arbitration by eminent Authors and passages from the same. These passages are from the books which have been, according to Mr. Rajadhyaksha, written on international arbitration and, therefore, according to him, the principle is well settled that no order can be termed as procedural, technical or made during the course of arbitral proceedings, only by taking its form or label or nomenclature, but its substance must be seen in all such matters.
On the other hand, Mr. Nadkarni, learned Senior Counsel appearing on behalf of the respondent, supports the conclusion of the learned Principal District Judge, and contends that the issue is concluded by two Judgments of this court, rendered by same learned Single Judge Hon''ble Mr. Justice F.I. Rebello, as His Lordship then was in the case of M/s. Anuptech Equipments Private Ltd. Vs. M/s. Ganpati Co-op. Housing Society Ltd. and others, . He submits that all the decisions have been taken note of, including one cited by Mr. Rajadhyaksha and the conclusion drawn by the learned Judge is that every order during the course of arbitral proceedings or reference cannot be termed as an award, much less an interim award. If such orders are capable of being impugned only by taking recourse to Section 34 of the Arbitration and Conciliation Act, 1996, then, there is no challenge permissible thereto by any other mode, including filing of an application of the instant nature. Mr. Nadkarni submits that if the final award is adverse to the appellant and also deals with matters which are subject-matter of the application for amendment, then, while impugning and challenging it, it would be open for the appellant-applicant to urge that the amendment as prayed should have been granted and rejection of the same vitiates the final award, as well. In such circumstances, at this stage, learned Principal District Judge has rightly refused to interfere and the order impugned, therefore, be upheld.
Although the matter is listed for admission, at this stage itself, bearing in mind that the merits of the application for amendment have not been gone into either by the learned Principal District Judge, or by me as they are not raised before me, I thought it fit to dispose of this appeal at the admission stage itself and also because I am in agreement with the conclusion of the learned Principal District Judge.
The application that was made before the arbitral Tribunal was for amendment of the written statement, which was filed by the appellant-applicant. Arbitration and Conciliation Act, 1996, under Chapter IV which is entitled "Jurisdiction of Arbitral Tribunals" gives authority to the Tribunal to rule on its jurisdiction vide Section 16 and by Section 17 it permits interim measures by the arbitral Tribunal. Chapter V - is entitled conduct of the arbitral proceedings and deals with matters of procedure. It commences with Section 18 which talks of equal treatment of parties. Determination of rules of procedure is dealt with by Section 19. Section 20 deals with place of arbitration. Section 21 provides for commencement of arbitral proceedings; whereas Section 22 deals with the language thereof.
Section 23 then comes, and reads thus :
Statement of claim and defence. -(1) Within the period of time agreed upon by the parties or
determined by the arbitral tribunal, the claimant shall state the facts supporting his claim, the points at issue and the relief or remedy sought, and the respondent shall state his defence in respect of these particulars, unless the parties have otherwise agreed as to the required elements of those statements.
(2) The parties may submit with their statements all documents they consider to be relevant or may add a reference to the documents or other evidence they will submit.
(3) Unless otherwise agreed by the parties, either party may amend or supplement his claim or defence during the course of the arbitral proceedings, unless the arbitral tribunal considers it inappropriate to allow the amendment or supplement having regard to the delay in making it.
A bare perusal of Section 23 would reveal that sub-Section (1) thereof provides for filing of statement of claim by the claimant and the respondent stating his defence in respect of the particulars. Sub-Section (2) provides that the parties may submit with their statements all documents which are relevant or other evidence. Sub-Section (3) of Section 23 states that unless otherwise agreed by the parties, either party may amend or supplement his claim or defence during the course of arbitral proceedings, unless the arbitral Tribunal considers it inappropriate to allow the amendment or supplement having regard to the delay in making it. It is not disputed that it is such an application which was being dealt with by the arbitral Tribunal in this case. That was an application seeking amendment of the defence during the course of arbitral proceedings. The arbitral Tribunal while rejecting the said application held that the rejection thereof does not preclude the Counsel for the appellant-applicant from raising appropriate pleas on aspect of law, based on the contents of the documents already on record. To my mind, a reading of this order, apart from other things, clearly reveals that the arbitral Tribunal has not foreclosed the matter raised in terms of the application that was made by the appellant-applicant. Even if the arbitral Tribunal has rejected the application to the extent it sought amendment to the written statement/defence of the appellant-applicant, it has allowed the appellant-applicant to raise the questions of law on the basis of the documents already on record i.e. the documents placed before the arbitral Tribunal prior to 25th January, 2011. If that be so, going by very tests that have been applied by the learned Single Judge of this Court and the Hon''ble Supreme Court in the decisions brought to my notice, this is not a case of any order where right or claim of the appellant-applicant has been finally determined and decided or that the arbitral Tribunal has rendered itself functus officio. Once a procedural aspect has been dealt with and the order itself can be termed as procedural in nature, and passed during the course of arbitral reference, then, to my mind, any wider questions need not be decided.
Assuming that in a given case such orders could be termed as awards or interim awards on the tests applicable therefor, yet, in the peculiar facts of this case, the arbitral Tribunal has neither determined nor conclusively decided the right and claim which has been raised by the appellant-applicant. It has merely refused permission to incorporate certain statements or objections in the defence. To my mind, the learned Principal District Judge was in no error in refusing to interfere and rightly dismissed the application challenging the order of the arbitral Tribunal. The order of the arbitral Tribunal can, in given facts and circumstances, be safely termed as an order which was procedural in nature and it was not something by which anything was finally and conclusively determined.
In such circumstances and even after the liberty granted by the arbitral Tribunal, if the appellant-applicant is ultimately aggrieved, nothing prevents him from impugning the final award if it is adverse to him and while impugning it, raising appropriate pleas with regard to the order of refusal of amendment passed by the arbitral Tribunal. To my mind, once such a conclusion is reached, it is really not necessary for me to refer to all the decisions which have been brought to my notice. For the reasons stated above, the appeal fails and is, hereby, dismissed.