Confidential arbitration documents cannot be used in separate proceedings: Delhi High Court

The Delhi High Court on July 6 held that documents procured from confidential arbitral proceedings cannot ordinarily be relied upon in a separate arbitration. [JPC Infrastructure and Constructions Private Limited v. Alstom Transport India Limited]

Justice Harish Vaidyanathan Shankar said that allowing such material to be used would undermine the confidentiality regime under Section 42A of the Arbitration and Conciliation Act, 1996.

“Relevance of a document and its permissible use are distinct considerations. A party cannot claim an unrestricted right to rely upon a document solely on the ground that it may support its case, irrespective of the circumstances in which such document was obtained or the legal obligations governing its disclosure,” the Court observed.

The Court dismissed a petition filed by JPC Infrastructure and Constructions Private Limited challenging a November 2023 arbitral award in favour of Alstom Transport India Limited.

The dispute arose from the Eastern Dedicated Freight Corridor project between Bhaupur and Khurja. The Dedicated Freight Corridor Corporation of India Limited (DFCCIL) had awarded Alstom a contract for electrification, signalling, telecommunication and allied works.

Alstom subsequently entered into a back-to-back subcontract with JPC in December 2015. The ₹34.09 crore subcontract covered civil, electrical and associated works relating to 55 structures at Daudkhan, Hathras and Khurja.

Disputes arose over delays, site access, preparation of drawings, surveys, payments and alleged non-performance. Parts of JPC’s work were eventually removed from its scope and Alstom terminated the subcontract.

During arbitration, JPC relied on a June 2017 letter written by Alstom to DFCCIL. JPC contended that the letter contained admissions supporting its claim that preliminary surveys could not be undertaken without unhindered access to the project sites.

The arbitral tribunal, comprising former Chief Justice of India Dipak Misra and retired judges DK Jain and JD Kapoor, refused to admit the letter. It found that the document originated from a separate arbitration between Alstom and DFCCIL and had been obtained in circumstances that breached arbitral confidentiality.

The High Court upheld this view. It said that although Section 42A does not expressly use the word “inadmissibility”, the provision could not be interpreted in a manner that rendered confidentiality illusory.

“If the interpretation canvassed by the Petitioner were to be accepted, a party would be free to procure documents originating from a separate arbitration and deploy them in collateral proceedings,” the Court said.

The Court also upheld the tribunal’s finding that lawyers and their offices are bound by arbitral confidentiality even though Section 42A expressly refers only to arbitrators, arbitral institutions and parties. Lawyers act as agents of parties and cannot do what their clients are prohibited from doing, it noted.

It further rejected JPC’s reliance on the International Chamber of Commerce Rules governing the arbitration. Since the seat of arbitration was in India, the mandatory provisions of the Arbitration Act continued to apply, the Court ruled.

“A statutory mandate enacted by Parliament therefore cannot be diluted, displaced or overridden by institutional rules framed by an arbitral institution,” the judgment stated.

The Court consequently refused to interfere with the rejection of JPC’s claims relating to geotechnical investigations, topographical surveys, overhead costs and loss of profit. It found no patent illegality or conflict with the public policy of India in the award.

JPC was represented by Advocates Manini Brar and Muskaan Chawla.

Alstom was represented by Advocates Dinesh Pardasani, Aishwary Kumar Tiwari, Siddharth Chechani and Amrit Singh.

[Read Judgment]