Arbitrator cannot shun responsibilities and leave work of quantification on some other person: Calcutta High Court

The Calcutta High Court recently set aside an order passed by the West Bengal State Micro & Small Enterprises Facilitation Council after noting that there was no effort to quantify the interest claimed or even the date from which that interest would apply [M/S Usha Martin Limited v. M/S Eastern Gases Limited]..Justice Shekhar B Saraf found that the award passed by the Council in its capacity as an arbitrator fell within the scope of an "unreasonable award"."If the parties in the present matter have placed their trust in this Court to arrive at a judgment, this Court cannot just hand over its responsibilities to anyone else and ask them to make a judgement. Similarly, in the case of arbitration, an arbitrator cannot shun away his responsibilities and leave the work of quantification on some other person," the order stated..The Court was hearing an application under Section 34 of the Arbitration & Conciliation Act challenging an order of the Council in relation to payment of interest on an alleged delay in payment of the principal..The petitioner claimed that the Council did not deliberate on the quantum of payment, and simply referred the claim to a Chartered Accountant. It was submitted that such an act of delegation was tantamount to misconduct.It was also the petitioner's stand that the award passed by the Council was completely unreasoned, and therefore, did not classify as an "award" within the meaning of the Act..The Court agreed to the petitioner’s submissions, noting that the Council threw the principles of natural justice out the window while leaving it open to a third party to decide the award amount.“This Court believes that without giving any thought to principles of natural justice and disrespecting the trust that the parties place in an arbitrator when they seek his assistance to arrive at a decision regarding a dispute, the Council in the present case proceeded to simply throw these principles out of the window and left it upon a third party to decide the amount to be awarded,” the order stated..Noting that the award suffered from severe infirmity, the judge held,“The fact that the WBSMSEFC, acting as an arbitrator, passed the arbitral award without making any effort to quantify the interest claimed or even the date from which that interest will apply is incomprehensible to a reasoned mind."With this, the plea was allowed and the award was set aside..Advocates Rudraman Bhattacharyya and Souvik Kundu appeared for the petitioner, while the respondent was represented by Advocate Jatinder Singh Dhatt..[Read Order]

Arbitrator cannot shun responsibilities and leave work of quantification on some other person: Calcutta High Court

Shagun Suryam

Related Stories