In FAO(OS) (COMM) 156/2022- DEL HC- It is clarified u/s 19(1) of A&C Act that Arbitral Tribunal is not bound by Indian Evidence Act; Tribunal’s decision to evaluate material placed before it cannot be faulted: Delhi HC Justices Vibhu Bakhru & Amit Mahajan [03-06-2022]

Read Order: CONCEPT COMMUNICATIONS LTD v. BHARAT SANCHAR NIGAM LTD

Tulip Kanth

New Delhi, June 21, 2022: While affirming that the decision of the Arbitral Tribunal to evaluate the material placed before it cannot be faulted, the Delhi High Court has observed that sensu stricto, Indian Evidence Act, 1872 does not apply to arbitral proceedings.

Referring to the Arbitration & Conciliation Act,1996, the Division Bench of Justice Vibhu Bakhru and Justice Amit Mahajan asserted, “Section 1 of the said Act makes it amply clear that it would not apply to proceedings before an arbitrator.”

The factual matrix of the case was that the respondent (BSNL) had invited bids to empanel agencies to provide OOH advertising services in several Territorial Circles in India and CCL emerged as the successful bidder. Thereafter, the parties entered into an agreement for the empanelment. When disputes arose between the parties in connection with the Agreement and the Release Order, it  was CCL’s case that it raised bills for installing the PCO Sign Boards from time to time. Whilst some payments were made a large invoiced amount was withheld. According to CCL an amount of Rs13,04,14,219.95 remained unpaid.

 CCL invoked the Arbitration Agreement and sought reference of the said disputes to arbitration.The Arbitral Tribunal found that appellant was paid for the PCO Sign Boards that were found to exist on verification and it rejected the contention that the appellant was entitled to be paid for the PCO Sign Boards. Against this order when the appellant moved the High Court, the Single Judge concurred with the conclusion of the Arbitral Tribunal. Hence, this appeal was filed by CCL under Section 37(1)(c) of the  A&C Act.

A contention was raised by CCL saying that the document namely the Status Report of installation of PCO Sign Boards was completely disregarded.On this submission, the Court responded by saying that the Tribunal did not ignore the said document.The Bench asserted, “ Section 19(1) of the A&C Act also expressly provides that an Arbitral Tribunal would not be bound by the Indian Evidence Act, 1872. Clearly, the decision of the Arbitral Tribunal to evaluate the material placed before it cannot be faulted.”

Ultimately, this Court found no infirmity with the decision of the Single Judge in declining to interfere with the impugned award on the ground that the disputes involved were largely on questions of fact and the finding returned by the Arbitral Tribunal in regard to these questions warranted no interference. 

According to the Bench, the Single Judge had rightly concluded that none of the grounds as set out in Section 34 of the A&C Act were established in the present case. Finding the appeal to be unmerited, the High Court dismissed the same.