Application to Set Aside Arbitral Award doesn’t Require Oral Evidence  – Supreme Court

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August 21, 2018

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In this remarkable judgment, the Supreme Court has held that oral evidence as required under Section 34 for setting aside Arbitral Award is not a mandatory requirement and should not be allowed unless necessary on the basis of facts and circumstances of the case.

Case name: M/S Emkay Global Financial Services Ltd. v. Girdhar Sondhi

The Bench noted that that speedy resolution of arbitral disputes has been the reason for enacting the 1996 Act, and continues to be the reason for adding amendments to the said Act to strengthen the aforesaid object. In this context, it was observed that if issues are to be framed and oral evidence taken then the object of summary proceeding under Section 34 would be defeated.

To arrive at its decision, the Supreme Court majorly relied on its judgment in the case of Fiza Developers & Inter-Trade Pvt. Ltd. v. AMCI (India) Pvt. Ltd. and Anr., wherein it was held  that issues need not be struck at the stage of hearing a Section 34 application, which is a summary procedure.

So read, we clarify the legal position by stating that an application for setting aside an arbitral award will not ordinarily require anything beyond the record that was before the Arbitrator. However, if there are matters not contained in such record, and are relevant to the determination of issues arising under Section 34(2)(a), they may be brought to the notice of the Court by way of affidavits filed by both parties.

The Apex Court has also held that Cross- examination of persons swearing to the affidavits should not be allowed unless absolutely necessary.

The entire case can be accessed here.