Expert settlement decision is not arbitration; challenge on same basis can be abuse of process

A clause directing an expert final decision to implement an existing settlement, without reference to adjudication of a formulated dispute by an impartial tribunal, is not an arbitration agreement, and the resulting decision is not an arbitral award. Parallel proceedings that repeat the same challenge on the same basis amount to abuse of process, especially where the same relief was already sought in prior arbitration-related proceedings. However, a distinct alternative plea challenging the decision in its own character, if not treated as an award, may survive at the threshold and be tested on maintainability and pleadings at trial.

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Issues: (i) Whether Clause 9 of the Memorandum of Understanding constituted an arbitration agreement and whether the Chairman, IFCI's decision dated 8 December 1995 was an arbitral award; (ii) whether Suit No. 1394 of 1996 was an abuse of the process of court.

Issue (i): Whether Clause 9 of the Memorandum of Understanding constituted an arbitration agreement and whether the Chairman, IFCI's decision dated 8 December 1995 was an arbitral award.

Analysis: The relevant inquiry was whether the clause contemplated referral of a formulated dispute to an impartial tribunal acting judicially on evidence and submissions, with the resulting decision intended to be enforceable as an arbitral award. Clause 9 was directed to implementation of an already concluded settlement, provided for clarifications and decisions on disputes relating to implementation, and permitted the Chairman, IFCI to nominate another person. The decision was based on expert assessment for working out the settlement and did not require judicial determination in the arbitral sense.

Conclusion: Clause 9 was not an arbitration agreement, and the Chairman, IFCI's decision was not an award.

Issue (ii): Whether Suit No. 1394 of 1996 was an abuse of the process of court.

Analysis: A suit that merely re-agitated the same challenge to the decision as if it were an award, or sought to restrain its enforcement on the same basis already raised in the arbitration petition, amounted to impermissible re-litigation and was barred in substance. However, the plaint also contained an alternative independent challenge to the same decision as a decision, if it was not treated as an award. That limited alternative plea could not be branded as abuse of process at the threshold, although its maintainability on merits and sufficiency of pleadings remained open for the trial court.

Conclusion: The suit was an abuse of process only to the extent that it challenged the decision as an award or sought reliefs already claimed in the arbitration petition, but not to the extent of the independent alternative challenge to the decision as a decision.

Final Conclusion: The proceedings were disposed of by rejecting the arbitration character of Clause 9 while permitting the suit to survive only in its limited independent form; the suit was otherwise struck by abuse-of-process principles.

Ratio Decidendi: A clause providing final and binding expert decision for implementation of an existing settlement, without contemplation of judicial adjudication of a formulated dispute, is not an arbitration agreement; and parallel proceedings re-agitating the same relief on the same basis amount to abuse of process, while a distinct alternative challenge may survive if separately pleaded.

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