1989 (8) TMI 376 - SC - Indian Laws

Arbitration Agreement Publication Key for Validity and Enforcement

Karnal Leather Karamchari Sanghatan Versus Liberty Footwear Company and Ors.

The Supreme Court held that the non-publication of the arbitration agreement under the Industrial Disputes Act renders the arbitral award invalid and ... - Issues Involved:1. Validity of the arbitral award made before publishing the arbitration agreement under the Industrial Disputes Act, 1947.2. Procedural irregularities in the arbitration process.3. Consequences of non-publication of the arbitration agreement within the stipulated time.4. Jurisdiction of the Industrial Tribunal and the effect of simultaneous references under Sections 10 and 10-A of the Act.Detailed Analysis:1. Validity of the Arbitral Award:The appeal concerns the validity of an arbitral award made before the publication of the arbitration agreement under the Industrial Disputes Act, 1947. The principal question is whether non-publication of the arbitration agreement as required under Sub-section (3) of Section 10-A renders the arbitral award invalid and unenforceable. The Supreme Court examined the statutory provisions, particularly Section 10-A, which mandates the publication of the arbitration agreement in the Official Gazette within one month from the date of receipt by the appropriate government. The Court concluded that the publication of the arbitration agreement is obligatory and non-compliance with this requirement would be fatal to the arbitral award.2. Procedural Irregularities:The management challenged the arbitral award on the grounds of procedural irregularities, including the absence of the Deputy Commissioner during the arbitration proceedings and the lack of opportunity to produce evidence. However, the High Court did not examine all the contentions urged by the management and quashed the award solely on the basis of non-publication of the arbitration agreement. The Supreme Court did not delve into these procedural irregularities in detail but focused on the primary issue of publication.3. Consequences of Non-Publication:The Court analyzed whether the requirement of publication within the time prescribed under Sub-section (3) of Section 10-A is mandatory or directory. It referred to various authorities and judicial precedents to conclude that while publication of the arbitration agreement is necessary, the time limit of one month is directory and not imperative. However, the Court emphasized that the agreement must be published before the arbitrator considers the merits of the dispute, and failure to do so would invalidate the arbitral award.4. Jurisdiction of the Industrial Tribunal:The Supreme Court addressed the issue of simultaneous references under Sections 10 and 10-A of the Act. It noted that once the parties have chosen to refer their dispute to arbitration under Section 10-A, the government cannot subsequently refer the same dispute for adjudication under Section 10. The reference made by the State Government to the Industrial Tribunal under Section 10(1) was quashed. The Court directed the State Government to publish the arbitration agreement and referred the matter to the Industrial Tribunal for passing an arbitration award in accordance with the law.Relief and Directions:The Supreme Court issued the following directions:1. The State Government shall publish the arbitration agreement in the Government Gazette within four weeks.2. The agreement stands referred to the Industrial Tribunal, Haryana at Ambala for passing an arbitration award.3. The reference made under Section 10(1) of the Act to the Industrial Tribunal is quashed.4. The management shall withdraw the Letters Patent Appeal and the Writ Petition pending in the High Court within three weeks, failing which the High Court shall dispose of them as infructuous.The Tribunal was directed to dispose of the matter expeditiously, within six months from the date of first appearance of the parties. The appeal was disposed of with no order as to costs.