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In the absence of any agreement between the parties, the sole arbitrator has the absolute authority to decide on whether to allow evidence in a particular case or not: Delhi High Court

In the absence of any agreement between the parties, the sole arbitrator has the absolute authority to decide on whether to allow evidence in a particular case or to proceed with the adjudication of the matter on the basis of documents and other materials as held by the High Court of Delhi through the learned bench led by Justice Amit Bansal in the case of Telecommunication Consultants India Limited v. B. R. Sukale Construction (CM(M) 958/2021)

Brief facts of the case are that the present petitions filed under Article 227 of the Constitution of India impugn the order/direction dated 7th October, 2021 and email dated 12th October, 2021 of the sole arbitrator, issued in two separate arbitration proceedings between the same parties. Vide the impugned order/direction dated 7th October, 2021, the sole arbitrator has observed as “ It is decided that no further evidence by way of witnesses will be held for the time being. Proceedings of the case will begin straightaway by arguments by both claimant and respondents. This was considered appropriate for curtailing delay and all also dispute being of contractual/tender nature and all issues are communicated by parties in writing which have already been filed by both parties and taken on record.”

The counsel for the petitioner submits that after the order was passed by the arbitrator in both the arbitrations, a communication was sent by the counsel for the petitioner to the arbitrator stating that the petitioner be allowed to lead evidence in the matter. The said request on behalf of the petitioner was rejected by the arbitrator vide the impugned email dated 12th October, 2021. The counsel states that the aforesaid directions passed by the arbitrator are not tenable as the matter requires evidence to be led for proper adjudication of the arbitrations.

The counsel appearing on behalf of the respondent on advance notice submits that the arbitrator, who is not a legally trained person but a retired Chief Engineer of Bharat Sanchar Nigam Limited, has taken a considered decision that no evidence by way of witnesses shall be held for the time being and he shall straightaway proceed with arguments of both the claimant and the respondent in order to curtail delay; as per Sections 19 and 24 of the Arbitration Act, failing any agreement existing between the parties, the arbitrator is free to consider the proceedings in the manner it considers appropriate; (iii) it is in the sole discretion of the arbitrator to decide whether to take oral evidence in a case or straightaway decide the matter on the basis of documents and other materials.

After hearing the arguments by the learned counsel for the respective parties, the Hon’ble Court held, “In the present cases, the sole arbitrator having decided that the matter can be adjudicated on the basis of the documents on record, has held that no evidence by way of witnesses/oral evidence is required for the time being. No fault can be found in the decision of the arbitrator in this regard. Since no exceptional circumstances or exceptional rarity have been demonstrated/made out in the petitions or during the hearing and given the stage at which the arbitration proceedings are, there is no occasion to warrant the exercise of jurisdiction by this Court under Article 227 of the Constitution of India. In view of the above, there is no merit in the present petitions.”

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Judgment reviewed by Vandana Ragwani 

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