2001 (8) TMI 1290 - HC - Companies Law

Arbitration Award Upheld Despite Bank's Objections

Canara Bank Versus C. Pandit Rao

The court upheld the arbitration award, dismissing objections by the bank regarding bias and misconduct by the arbitrator. The court found no substantial ... Arbitration award Issues Involved:1. Validity of the arbitration award.2. Allegations of bias and misconduct by the arbitrator.3. Principles of natural justice.4. Procedural fairness and undue haste in passing the award.Issue-Wise Detailed Analysis:1. Validity of the Arbitration Award:The Civil Revision Petition (CRP) and Civil Miscellaneous Appeal (CMA) arose from a common judgment regarding the arbitration award dated 26-11-1993. The petitioner sought to make the award a rule of the court, while the respondent bank sought to set aside the award, declaring it illegal and void. The court dismissed the bank's objections and upheld the award, making it a rule of the court.2. Allegations of Bias and Misconduct by the Arbitrator:The appellant argued that the arbitrator was biased and misconducted the proceedings. The bank contended that the arbitrator, K.C.S. Rao, proceeded from where the previous arbitrator left off without starting afresh, and refused to grant adjournments, which they claimed was a violation of natural justice. The court found no substantial evidence of bias or misconduct. It was noted that the bank had previously attempted to remove the arbitrator on similar grounds, which had been dismissed by the court.3. Principles of Natural Justice:The appellant argued that the refusal to grant a short adjournment violated the principles of natural justice. The court observed that the arbitrator had given ample opportunity to both parties to present their case. The arbitrator had directed the parties to appear on specific dates and had made it clear that no further adjournments would be granted. Despite this, the bank's counsel did not appear, and the arbitrator proceeded to pass the award. The court held that the arbitrator's actions did not violate the principles of natural justice.4. Procedural Fairness and Undue Haste in Passing the Award:The appellant contended that the award was passed in undue haste, indicating malice on the part of the arbitrator. The court found that the arbitrator had acted within the stipulated time and had made efforts to expedite the matter due to the long-standing nature of the dispute. The court referenced several judgments, including those from the Calcutta High Court and the Supreme Court, to support the view that procedural fairness was maintained and that the arbitrator's actions were justified given the circumstances.Conclusion:The court dismissed the revision petition and the appeal, finding no merit in the appellant's contentions. The arbitrator's award was upheld, and it was made a rule of the court. The court emphasized that the appellant could not take advantage of its own wrongs and that the allegations of bias and misconduct were not substantiated by evidence. The principles of natural justice were deemed to have been followed, and the procedural actions of the arbitrator were found to be fair and justified.