Arbitration and Conciliation Act, 1996 – Ex-parte arbitral awards – Enforcement by employee, when denial of the authenticity of the arbitration agreement by employer – Service dispute by the employee against the State Government and the government hospital where he was employed as regards age of superannuation – Writ petition remained pending for 12 years, thereafter was withdrawn – Year before, the employee initiated arbitration proceedings against the State Government and the principal of the medical college – Suit for reference filed which was later withdrawn without any decision on merits with the two sole arbitrators appointed by the employee, suo moto taking up the arbitration proceedings and pronouncing the two awards, for an amount of around Rs.46 lakhs with interest against the State and the Principal of the Medical College – Thereafter, employee sought enforcement of ex-parte awards – Employer objected the authenticity of the arbitration agreement relied on by employee – However, the courts below dismissed the objections – Correctness:
Held: Arbitration agreement is sine qua non for arbitration proceedings, as arbitration fundamentally relies on the principle of party autonomy-right of parties to choose arbitration as an alternative to court adjudication – Existence of the arbitration agreement is a prerequisite for an award to be enforceable in the eyes of law – On facts, arbitration proceedings were a mere sham and a fraud played by employee, by self-appointing/nominating arbitrators, who have passed ex-parte and invalid awards – Clear case of lack of subject matter jurisdiction – So-called arbitration agreement nowhere available on the records of either the Municipal Corporation or the State – Employee did not file the original agreement since he was not in possession of the same, nor is he a signatory and party to the arbitration agreement – Hospital and the Governor did not endorse any such agreement – Arbitration Agreement is not referred to in the indenture of the transfer executed – No evidence to show the existence of the arbitration agreement, except a piece of paper, which is not even a certified copy or authenticated copy of the official records – Notwithstanding that the claims made by employee were ex-facie and clearly barred by limitation as per s.3 of the Limitation Act 1963 rw s.43 they have been allowed – Thus, ex parte awards set aside and to be treated as null and void and non-enforceable in law – Impugned judgment set aside. [Paras 20-25]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Nidhi Jain. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
This page is for informational and research purposes only and does not constitute legal advice. Consult a qualified advocate for advice specific to your situation.