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2022 DIGILAW 305 (KER)

Jacob Mathew v. P. T. C Builders, P. T. C Towers, SS Kovil Road, Thampanoor, Thiruvananthapuram-695001, Represented by Its Managing Director

2022-03-30

DEVAN RAMACHANDRAN

body2022
ORDER : 1. The sweep and nature of the rights of a party to an Arbitration proceedings and the statutory modus to be adopted in the event he objects to the charges/costs fixed in the Award has not been brought up before this Court often. 2. If a party is to feel that the charges/costs fixed by the Arbitrator is excessive or unreasonable for any reason, does he obtain any recourse to obtain the Award without acceding to it? 3. Yes, he does; under Section 39 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act' for short). 4. First, a woodcut of the facts, which have led the afore question before this Court. 5. This Arbitration Request has been filed invoking Sections 14 and 15 of the Act, read along with Paragraph No.8 of the Appointment of Arbitrators by the Chief Justice of Kerala High Court Scheme, 1996, seeking that the authority of the present Arbitrator be withdrawn. 6. Sri. Philip Mathew – learned counsel for the petitioner, has urged various contentions why this Court should exercise jurisdiction, but primary among them is that the Arbitrator now stands incapacitated to issue an Award. He edificed his client's objections against the proceedings broadly on four aspects; namely, that (a) the Arbitrator had become functus officio on him having issued Annexure A7 Award; (b) the learned Arbitrator has acted in violation of Section 29A of the Act; (c) the learned Arbitrator had unfairly demanded and collected Rs.1.5 lakhs from the respondents, though his client did not accede to the same when an identical demand was made on him; and (d) that the costs/charges demanded by the learned Arbitrator is excessive and unreasonable to the claim before him. 7. Before I go forward, however, I must bear in mind that the petitioner himself has filed Annexure A14 communication of the learned Arbitrator issued to both sides on 28.07.2021, notifying them that he has passed a Final Award on the same day and directing them to produce E-stamps for certain amounts and to pay specified sums towards his charges. 8. Before I go forward, however, I must bear in mind that the petitioner himself has filed Annexure A14 communication of the learned Arbitrator issued to both sides on 28.07.2021, notifying them that he has passed a Final Award on the same day and directing them to produce E-stamps for certain amounts and to pay specified sums towards his charges. 8. Of course, the argument of Sri.Philip Mathews is that even when Annexure A14 notice had been issued by the learned Arbitrator, the Final Award had not been issued to any person; and that it is to get over the interim order of this Court, which was issued on 06.08.2021 requesting him not to pass/issue Final Award, that the learned Arbitrator had engrossed the same on stamp paper produced by the respondents on 10.08.2021. 9. The records reveal that respondents have filed a very detailed counter affidavit; and their learned counsel – Sri.Ajakumar, has countered every allegation of Sri.Philip Mathew with equal vehemence. 10. Be that as it may, since the learned Arbitrator is seen to have passed a Final Award on 28.07.2021, which was much before the filing of this Arbitration Request, I do not think that this Court will be now justified in withdrawing his authority on any of the grounds mentioned in the Arbitration Request. 11. The proper remedy of the petitioner, of course, would be to challenge the Award if he is not happy with the same; by first invoking the benefit of Section 39 of the Act, to obtain a copy of the Award, without remitting the charges and costs demanded by the learned Arbitrator. 12. There can be no contest to this because Section 39(2) of the Act prescribes as follows: 39. 12. There can be no contest to this because Section 39(2) of the Act prescribes as follows: 39. Lien on arbitral award and deposits as to costs xxx xxx xxx 2) If in any case an arbitral Tribunal refuses to deliver its award except on payment of the costs demanded by it, the Court may, on an application in this behalf, order that the arbitral Tribunal shall deliver the arbitral award to the applicant on payment into Court by the applicant of the costs demanded, and shall, after such inquiry, if any, as it thinks fit, further order that out of the money so paid into Court there shall be paid to the arbitral Tribunal by way of costs such sum as the Court may consider reasonable and that the balance of the money, if any, shall be refunded to the applicant.” 13. Indubitably, therefore, the right of a party to seek and obtain the Arbitration Award, subject to final assessment of the apposite charges and costs by the competent court, in the event he objects to the same, is hypostatized on firm statutory backing. 14. In fact, this is affirmed by Sri.Ajakumar -learned counsel for the respondents, who pointed out that if the petitioner is to obtain any benefit through the statutory procedure under Section 39(2) of the Act, his client would also be benefited because the proportionate deduction of the costs would become entitled to him. He, therefore, added that he does not stand in the way of this Court passing orders, allowing liberty to the petitioner to move an apposite application before the competent Court under Section 39 of the Act. 15. As I have said above, since the learned Arbitrator says that he has passed the Award even before this Arbitration Request had been filed, I am of the certain view that all which this Court is now required to do is to enable the petitioner to receive it without payment of the costs demanded therein, particularly because they allege that same is fixed without forensic basis. 16. Before I conclude, I must also record that, on hearing Sri.Philip Mathew with respect to the allegation that the learned Arbitrator had demanded Rs.1.5 lakhs from each of the parties earlier, I had called for the 'Proceedings Sheet' through the Registrar of this Court, which has been made available to me today. 17. 16. Before I conclude, I must also record that, on hearing Sri.Philip Mathew with respect to the allegation that the learned Arbitrator had demanded Rs.1.5 lakhs from each of the parties earlier, I had called for the 'Proceedings Sheet' through the Registrar of this Court, which has been made available to me today. 17. No doubt, the above said proceedings indicate such a course having been adopted by the learned Arbitrator, but it also reflects that it was done in a particular context with the consent of both sides. 18. I do not, therefore, intend to enter into this on its merits; but am of the opinion that all these issues must be left open for the petitioner, if he intends to challenge the Award under Section 34 of the Act in future. Resultantly, I order this Arbitration Request, leaving liberty to the petitioner to move an appropriate application under Section 39 of the Act before the competent Court; and if this is done within a period of two weeks from the date of receipt of a copy of this judgment, the said Court will issue orders and ensure that Award is delivered to the petitioner without insisting on payment of any charges or costs in excess of the amounts already paid by him; and then proceed to adjudicate the said application in terms of law, after hearing both sides, without any avoidable delay. Needless to say, until the petitioner is favoured with the Award of the Arbitrator, the same shall not be issued to the respondents either; and I order that both these be done simultaneously, so that the apprehension of one side using the Award to the detriment of the other would be allayed. I record that this is acceded to by Sri.Ajakumar and I also leave liberty to the respondents to challenge the Award or to invoke any other remedy under the Act entitled to them; for which purpose, all their contentions are left open.