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The test to determine if a petition which is already filed can be allowed for amendment is to check if the petitioner would be constrained to file a new application under section 34 of the Arbitration and conciliation act 1996 for challenging the award under additional grounds. This was decreed by the Hon’ble Justice Moushumi Bhattacharya in the case of Indian Oil Corporation Ltd. Vs. Tapas Kumar Das [I.A No: G.A. 2 of 2021] on the 12^th of July before the Hon’ble high court of Calcutta.

The present case deals with termination of a dealership executed between the respondent and the petitioner. This application has been filed for amending the grounds of challenge in an application under Section 34 of The Arbitration and Conciliation Act, 1996. The learned counsel for the petitioner submits that, the new grounds pertain to the Marketing Discipline Guidelines for certain types of dealerships of Indian Oil Corporation Limited, which provides for the remedies available to a dealer in the event of termination of the dealership. he grounds pertaining to the Guidelines were missed out through inadvertence in the application challenging the impugned Award. Counsel submits that the issues framed by the Arbitrator in the impugned Award would show that the petitioner had urged the new grounds in the arbitration proceedings. The counsel for the respondent opposes the application for adding new grounds for setting aside the Award primarily on the factual score. Counsel submits that in seeking to introduce new grounds, namely on the lack of jurisdiction, the nature and character of the setting aside application is being changed which is not permissible in law. It is also submitted that the amendments are being carried out beyond the period of 120 days within which an application has to be made for setting aside an Award. Counsel submits that grounds which are sought to be added now do not have a foundational basis in the original application. Counsel submits that if Section 34 (2) (b) is read with the amended Section 34 (2A) of the Act, there will be no need to add the proposed grounds.

The court heard the contentions of both the parties. It observed that, from the grounds, the grievance of the petitioner appears to be that the Arbitrator ignored a fundamental term of the agreement between the parties by holding that the Guidelines had been governing the dispute between the parties. As stated above, the petitioner’s stand is that the Guidelines also provide the remedies which are available to a dealer on the termination of the dealership. The court relied on the judgement in the case of Venture Global Engineering vs Satyam Computer Services Limited and Another; (2010) 8 SCC 660, wherein, “facts which would have a bearing on the proceedings for setting aside and for determining whether the Award was induced by fraud may be made part of the Section 34 proceedings.” The court also relied on the judgement in Fiza Developers & Inter-Trade Pvt. Ltd. vs AMCI (INDIA) Pvt. Ltd. & Anr; (2009) 17 SCC 796, wherein, “the scope of amendment in a section 34 application is restricted to the question whether any ground exists for setting aside of the Award and also held the necessity for framing of issues where material facts are in dispute. The decisions sought to be relied upon by learned counsel appearing for the respondent, who opposes the application for amendment proceed on the basis that if the existing petition does not contain the ground proposed to be added, the additional grounds must be rejected since it would have a bearing on Section 34(3) of the Act and on the general proposition that amendments beyond the prescribed period of limitation cannot be allowed since that would amount to entertaining a fresh petition, the proposed amendments were disallowed on the ground that the amendments were more than amplification of the existing grounds.”

Applying the rationale used in these cases, the court found that, “The issue which falls for consideration is whether permitting the petitioner to incorporate the additional grounds of challenge to the existing Arbitration Petition would enlarge the scope of the arbitration petitions beyond permissible limits or allow new grounds to be brought in for the first time to the challenge to the Award. The test is whether the additional grounds can be traced to the arbitration proceedings that is in pleading or document which was before the Arbitrator. If the contents or point urged in the additional grounds can be found in the contentions urged by the parties before the Arbitrator, it cannot then be said that the additional grounds are sought to be introduced by the petitioner for the first time in a Section 34 proceeding. The only point urged in the additional grounds is the relevance of the Marketing Discipline Guidelines which form part of the agreement between the parties and which the Arbitrator failed to give sufficient importance to. The petitioner would pass the test since the Marketing Discipline Guidelines constitutes a prominent and significant part of the records before the Arbitrator and disallowing the petitioner from bringing the said Guidelines into the existing application would deprive the petitioner from an important challenge to the impugned Award. This would militate against the liberal stand taken by the courts in respect of amendments where the objective is to primarily allow a party to amend its pleading as may be necessary for the purpose of determining the real questions in controversy between the parties. There is no doubt that the Marketing Discipline Guidelines go to the very root of the matter and are crucial for determining the challenge to the impugned Award.” The petition was allowed accordingly.

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