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2022 DIGILAW 3179 (MAD)

Haripriya Kamireddy v. VankaSubhashini

2022-09-06

SENTHILKUMAR RAMAMOORTHY

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JUDGMENT (Prayer: Original Petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 pleased to set aside the award dated 16.08.2012 passed by the second respondent in his proceedings Case No. ARC/SA-RSL- 133/2012.) 1. The petitioner challenges an arbitral award dated 16.08.2012 (the Award) under Section 34 of the Arbitration and Conciliation Act, 1996 (the Arbitration Act). 2. The dispute arises out of an alleged contract dated 28.03.2007 between the petitioner and first respondent for provision of services by the first respondent as care taker of the petitioner's female child. The first respondent instituted arbitral proceedings alleging non-payment by the petitioner and claimed a sum of Rs.14,86,000/-. By the Award, the arbitral tribunal awarded Rs.14,86,000/- and costs of Rs.1,46,000/-. 3. The Award is challenged on five grounds. The first ground was that the petitioner did not execute the contract dated 28.03.2007, which allegedly contained the arbitration clause. The second ground was that no notice under Section 21 of the Arbitration Act was issued by the respondent seeking constitution of the arbitral tribunal. The third ground of challenge was that the petitioner was unable to present her case and that reasonable opportunity was denied. The fourth ground was that the arbitral tribunal applied the Cpeace Mattuchadda Thani Naduver Rules, which had not been accepted by the petitioner. The fifth and last ground was that neither the interim award nor the final award are supported by reasons. 4. The respondent refuted these contentions. Learned counsel submitted that the respondent was employed as a domestic help by the petitioner to take care of her daughter in the United Kingdom. The petition was filed because amounts due and payable to the respondent were not paid by the petitioner. Notice dated 18.03.2012 was issued by the arbitral tribunal to the petitioner. Such notice was admittedly received by the petitioner and, in fact, the petitioner participated in the proceedings in the initial phase. Since the petitioner opted not to participate in further proceedings and contest the claim petition, it is submitted by learned counsel for the respondent that no interference is warranted with the Award. 5. Upon taking the above contentions into account, I propose to examine three fundamental grounds of challenge before deciding whether the other grounds are required to be considered. Since the petitioner opted not to participate in further proceedings and contest the claim petition, it is submitted by learned counsel for the respondent that no interference is warranted with the Award. 5. Upon taking the above contentions into account, I propose to examine three fundamental grounds of challenge before deciding whether the other grounds are required to be considered. The first question to be determined is whether the respondent issued notice under Section 21 of the Arbitration Act to invoke the arbitration clause. The records were requisitioned from the arbitral tribunal and the parties to the proceedings also filed relevant documents. On perusal thereof, it is evident that the arbitral proceedings were not preceded by a notice under Section 21 of the Arbitration Act. Secondly, I find that the arbitral tribunal has extensively referred to rules described as Cpeace Mattuchadda Thani Naduver Rules. In the records submitted by the arbitral tribunal, a General Declaration cum Undertaking is enclosed and this document refers to but does not contain the Rules. This document also appears to contain the signatures of parties to various arbitral proceedings, including that of the first respondent herein and the mother-in-law of the petitioner. However, it cannot be inferred from this document that parties agreed to these rules. Even with regard to the General Declaration, the same cannot override statutory prescriptions under the Arbitration Act. This leads to the most important ground of challenge. 6. Section 31(3) of the Arbitration Act mandates that the arbitral tribunal should record reasons for its conclusions unless the parties expressly agreed that reasons are not required or the award is on agreed terms pursuant to a settlement. As per Section 25(b) and (c) read with Section 31(3) of the Arbitration Act, these requirements apply even if the respondent does not file a statement of defence or present evidence. The arbitral tribunal had issued an interim award on 25.06.2012, and the operative portion thereof is set out below: ''1. To direct the Respondent Mrs. (Dr.)K.Haripriya to appear before the Tribunal on the Date of Hearing without fail in person so as to satisfy the Tribunal of her denial of her Contract with the Claimant, failing which she shall be summoned through the Courts for the same or the Tribunal shall file Contempt of Tribunal in the Court, following the Final Award. 2. (Dr.)K.Haripriya to appear before the Tribunal on the Date of Hearing without fail in person so as to satisfy the Tribunal of her denial of her Contract with the Claimant, failing which she shall be summoned through the Courts for the same or the Tribunal shall file Contempt of Tribunal in the Court, following the Final Award. 2. To direct the Counsel, who turned to be a witness by his 'NOTICE' to be present before the Tribunal for his apology for his Notice which is based on his ignorance of Facts and Law, of which the latter is inexcusable u/s 20-22 of Indian Contract Act and u/s 76-79 of IPC and failing his written apology his act will be suitably dealt u/s 27(5) of the Act,1996 and as per the Rules of the Proceedings. 3. To direct all the Witnesses including Mrs.SARASWATHI NAGAIYAN and other witness/es referred to by the Counsel if any to appear on the Next Hearing Date before the Arbitrator, failing which the court's assistance shall be sought, or the Final Award shall be passed. 4. To direct Dr.S.Nagaiya, husband of the Respondent to appear before the Arbitrator for witnessing, failing his appearance the Court's assistance u/s 27 shall be sought or Final Award be passed. 5. To direct the Respondent to deposit a sum of Rupees Five Lakhs in the Tribunal account which may be returned to the respondent or/ and accounted for on FINAL AWARD, on my decision, touching the delay made deliberately and purported by the Respondent on or before the Next Hearing date. Signed by the Sole Arbitrator this 27th Day of May, 2012 at Chennai within his jurisdiction.'' 7. The Award of the arbitral tribunal was issued on 16.08.2012. The said Award runs into more than 20 pages (pages 43 to 63 of the typed set of papers), and draws reference to the presence of observers at hearing. The grounds of the decision and the operative portion of the Award is set out below: c) The Grounds for Arbitrator's Decision 1. NO OBJECTION RAISED BY THE RESPONDENT on receipt of the following: a) The Arbitrator's Appointment Letter b) Respondent's Contract as T/C c) Cpeace Mattuchadda Thani Naduvar Rule 2000 As Amended 2012 in small fonts. d) 10% of the Arbitration fee on the awarded amount, not being objected to and agree upon by both the parties. NO OBJECTION RAISED BY THE RESPONDENT on receipt of the following: a) The Arbitrator's Appointment Letter b) Respondent's Contract as T/C c) Cpeace Mattuchadda Thani Naduvar Rule 2000 As Amended 2012 in small fonts. d) 10% of the Arbitration fee on the awarded amount, not being objected to and agree upon by both the parties. e) Interim Award not being obeyed f) No defence even after intimation of Ex -parte Award on failure to file defence before 13/08/12. 2. INSPECTION DONE WITHOUT ADHEREING TO THE REQUEST IN ITS PROPER SENSE but thru PLAYING MISCHIEF: On 09/05/12 the Respondent was supposed to visit the Venue of Arbitration with prior appointment / request. But this was sent to the Arbitrator's email at 10.51 AM for a Hearing at 11 AM notwithstanding intimation even on 15/04/12, the next Day of the First Hearing by the Arbitrator. "A) FINAL DECISION 1. I find that the Claimant is rightly claiming her due of Rs.14,86,000 for the services rendered as a domestic Servant in the house of the Respondent. 2. I find no jurisdiction to direct the Passport of the Claimant to be returned to her by the Respondent. 3. I find within my jurisdiction for seeking assistance of the concerned Embassies as the Respondent is in the United Kingdom and presumed mostly be avoiding the receipt of mails for a copy of the award u/s 31(5) of the 1996 Act. B) AWARD 1. I award and direct the said Respondent that she shall pay the said sum Rs.14,86,000 (Rupees Fourteen Lakhs Eighty Six Thousand) to the said Applicant / Claimant within seven days if no Petition is preferred and intimated of her intention before seven days on receipt of this Award. 2. I award and direct that the costs of the Arbitrator and of this award as agreed upon by the Respondent and the Claimant to be paid within seven days time on receipt of this Award, which is Rs.1,48,600/- (Rupees One Lakh Forty Eight Thousand and Six Hundred) by each of them separately. 3. 2. I award and direct that the costs of the Arbitrator and of this award as agreed upon by the Respondent and the Claimant to be paid within seven days time on receipt of this Award, which is Rs.1,48,600/- (Rupees One Lakh Forty Eight Thousand and Six Hundred) by each of them separately. 3. I award and direct that the Claimant shall endorse the Earth Charter and wire transfer to the Bank "Banco Nacional de Costa Rica" in the address of Avenida Central, Calle 4 y 6, San Jose, Costa Rica favouring "UNIVERSITY FOR PEACE / EARTH CHARTER" for the Account Number "100-02-099-600115-2", having the Swift Code: BNCRCRSJ to pay an amount of Rs.13374/- (Rupees Thirteen Thousand Three Hundred and Seventy Four only) within 30 days time of the Date of this Award. 4. I direct that the Award shall be signed in three originals - one of the stamped originals to be retained by the Sole Arbitrator, and the other two to be issued to the Applicant and the Respondent, each one." 8. Thus, the arbitral tribunal has allowed the claim of Rs.14,86,000/- and awarded costs of Rs.1,48,600/-. I examined both the interim award and the Award including the grounds for the arbitrator's decision closely but any reasoning in support of the conclusions set out above is conspicuous by its absence. For reasons impossible to discern, the Award also directs the first respondent to endorse something called the Earth Charter and directs the wire transfer by the first respondent of a sum of Rs.13374/- to a bank in Costa Rica, Central America – bizarre to say the least. 9. On the basis of the three grounds considered above, the Award is patently illegal as per applicable law in this regard. This warrants the setting aside of the Award. Therefore, it is not necessary to consider or determine the assertion of the petitioner that the agreement dated 28.03.2007 was not signed by her, and this determination should be made by a duly constituted arbitral tribunal. 10. For reasons set out above, the Award dated 16.08.2012 is set aside. It is open to the first respondent to initiate de novo arbitral proceedings under the agreement dated 28.03.2007. If such proceedings are instituted, the first respondent shall be entitled to the benefit of Section 43(4) of the Arbitration Act. In the circumstances, there shall be no order as to costs.