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Issues: (i) whether the arbitral award was vitiated for want of reasonable opportunity and violation of natural justice under Section 34(2)(a)(iii) of the Arbitration and Conciliation Act, 1996; (ii) whether the arbitrator acted beyond the scope of reference and in excess of jurisdiction under Section 34(2)(a)(iv) of the Arbitration and Conciliation Act, 1996.
Issue (i): whether the arbitral award was vitiated for want of reasonable opportunity and violation of natural justice under Section 34(2)(a)(iii) of the Arbitration and Conciliation Act, 1996.
Analysis: The proceedings showed repeated opportunities granted to the appellant for filing the counter and participation in the arbitration. The appellant had appeared before the arbitrator, obtained adjournments, was set ex parte only after non-appearance, and was again informed of the next date. A challenge under Section 34(2)(a)(iii) requires not merely a complaint of absence of notice, but a real inability to present the case and resulting prejudice. On the facts, the appellant was aware of the proceedings, failed to remain present, and did not establish that any procedural lapse caused prejudice.
Conclusion: The award was not vitiated under Section 34(2)(a)(iii), and the objection failed.
Issue (ii): whether the arbitrator acted beyond the scope of reference and in excess of jurisdiction under Section 34(2)(a)(iv) of the Arbitration and Conciliation Act, 1996.
Analysis: Although the reference letter mentioned the agreement dated 12.07.1997, the parties' transactions under the earlier and later agreements were interconnected, concerned the same products and territories, and were treated by both sides as part of a common commercial arrangement. The arbitration clause in the later agreement was widely worded to cover disputes arising out of or in connection with the agreement. In view of the breadth of the clause and the interconnected nature of the contracts, the dispute regarding unsold stock and related claims fell within the arbitrator's jurisdiction. The plea of excess of jurisdiction was also not raised at the appropriate stage before the tribunal.
Conclusion: The arbitrator did not exceed the scope of reference, and the objection under Section 34(2)(a)(iv) failed.
Final Conclusion: The award was upheld and the challenge to the arbitral award was rejected.
Ratio Decidendi: A party challenging an arbitral award on grounds of denial of opportunity or excess of jurisdiction must show real prejudice or a timely jurisdictional objection, and a broadly worded arbitration clause may extend to connected disputes arising from interrelated agreements between the same parties.
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