Case Law Details
Devender Kumar Kashyap Vs Chander Muni (Delhi High Court)
Introduction: In a pivotal decision, the Delhi High Court addressed the intricacies of arbitration notice validity under Section 21 of the Arbitration and Conciliation Act in the case of Devender Kumar Kashyap vs. Chander Muni. The court’s ruling delved into the consequences of providing a wrong address during arbitration proceedings and set a precedent for how such issues should be approached in future cases.
Detailed Analysis: The dispute between Devender Kumar Kashyap and Chander Muni arose from a partnership deed dated April 11, 2016, which necessitated arbitration for resolution. The contention centered around the petitioner’s failure to serve a valid notice as per Section 21 of the Arbitration and Conciliation Act due to addressing it to the respondent’s previous address. The respondent’s legal counsel argued that this oversight rendered the arbitration invocation premature, citing a prior order where an ex parte arbitral award was set aside due to incorrect notice service.
However, the petitioner’s counsel countered this by highlighting that the respondent, in a separate proceeding, had himself provided the contested address, thus acknowledging its validity. Further, it was argued that the primary purpose of an arbitration notice—to inform the other party of the dispute and arbitration intention—was fulfilled as the respondent was evidently aware of the proceedings.
After careful consideration, the court rejected the respondent’s objection, emphasizing that once the respondent acknowledged the address in question in previous legal filings, he could not dispute its validity for the arbitration notice. The court also distinguished the present case from the precedent cited by the respondent, noting that the respondent’s awareness of the arbitration negated any claims of prematurity.
Conclusion: The Delhi High Court’s decision in Devender Kumar Kashyap vs. Chander Muni serves as a crucial reminder of the arbitration process’s nuances, particularly concerning notice validity. By upholding the arbitration notice’s validity despite the wrong address, the court reaffirmed the principle that technicalities should not obstruct the substantive resolution of disputes through arbitration. This ruling not only paves the way for the resolution of the immediate dispute but also establishes guiding principles for future arbitration proceedings facing similar issues.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
I.A. 24006/2023
1. Exemption allowed subject to all just exceptions.
2. The application stands disposed of.
I.A. 24007/2023
3. This is an application filed by the petitioner seeking condonation of 93 days’ delay in re-filing the petition.
4. The application is, for the reasons stated therein, allowed and the delay of 93 days’ in re-filing the petition stands condoned.
5. The application stands disposed of.
ARB.P. 1269/2023
6. The present petition under Section 11 of the Arbitration and Conciliation Act (hereinafter referred to as “the Act”) seeks appointment of a sole arbitrator for adjudication of disputes which have arisen between the parties in relation to Partnership Deed dated 11.04.2016.
7. Issue notice. Learned counsel for the respondent accepts notice and does not deny that there are existing disputes between the parties. He also does not deny that these disputes are required to be adjudicated as per the arbitration clause contained in the Partnership Deed dated 11.04.2016. He, however, opposes the petition as being premature by contending that the petitioner had failed to serve a valid notice in terms of Section 21 of the Act, which is a precondition for invoking arbitration under section 11 of the Act. By drawing my attention to the invocation notice dated 25.04.2018 and the Order dated 18.08.202 passed by the learned District Judge, Commercial Courts, North District, Rohi ni Courts, Delhi in OM P (COMM) 34/2021, vide which the exparte award dated 10.09.2020 passed by the learned Arbitrator unilaterally appointed by the petitioner, was set aside, he submits that the aforesaid notice was wrongly addressed at respondent’s earlier address, i.e Village Bharola, New Subzi Mandi, Azadpur, Delhi-110033. He submits that despite the petitioner being well aware that the respondent had already shifted to Shalimar Bagh, Delhi before the issuance of the aforesaid invocation notice had addressed the invocation notice to his earlier address. He, therefore, contends that an invocation notice, which was not sent to his correct address, would not be a valid notice in terms of section 21 of the Act. In support of his plea, he also relies on a decision of a Co-ordinate Bench in A RB.P 694/2019, titled Active Media vs. Divisional Commercial Manager, Northern Railway. He, therefore, prays that the petition be dismissed as being premature.
8. In response, learned counsel for the petitioner submits that while filing the aforesaid petition under section 34 of the Act, for setting aside of the earlier ex parte arbitral award, the respondent had himself provided the same address of Village Bharola, New Subzi Mandi, Azadpur, Delhi-110033. He, therefore, cannot be permitted to now urge that the invocation notice was not served at the correct address. He, further, submits that, in any event, the purpose of an invocation notice is to inform the opposite party regarding the intent of the claimant to invoke arbitration, which fact is well known to the respondent. He, therefore, prays that an arbitrator be appointed by this Court for adjudication of the petitioner’s claims, which has been pending since September 2018.
9. Having considered the submissions of learned counsel for the parties and perused the record, I find absolutely no merit in the objection raised by the respondent. I am inclined to agree with the petitioner that once the respondent himself provided his address at Village Bharola, New Subzi Mandi, Azadpur, Delhi-110033 in OMP (COMM) 34/2021, filed in December 2021, he cannot be permitted to urge that the invocation notice was not served at the correct address. I am also inclined to agree with the petitioner that the purpose of the invocation notice is to inform the opposite side, in advance, about the dispute being raised by the claimant as also grant an opportunity to the opposite side to concur in the appointment of an arbitrator. In the present case, once it is found that the respondent was well aware about the petitioner’s prayer for adjudication of disputes through arbitration, I fail to appreciate as to how the petition can be said to be premature at this stage.
10. I have also considered the decision in Active Media (Supra), in which the Court found that the respondent was never made aware of the invocation notice which had been issued at its incorrect address, as opposed to the present case where the respondent, at least since 2021 when he filed OMP (COMM) 34/2021, has been aware about the invocation notice. I am, therefore, of the view that the decision in Active Media (Supra) is not applicable to the facts of the present case.
11. In the light of the aforesaid when the existence of disputes between the parties and the fact that these disputes are required to be adjudicated through arbitration are admitted, I find no reason to not accept the petitioner’s prayer for appointment of an arbitrator. Accordingly, Mr. Pranav Proothi, Advocate (Mobile No.9560205151), is, with the consent of the parties, appointed as the Arbitrator for adjudication of disputes which have arisen between the parties in relation to Partnership Deed dated 11.04.2016.
12. Before entering upon reference the arbitrator shall comply with section 12 of the Act. The fees of the learned Arbitrator will be governed by Schedule IV of the Act.
13. Needless to state, this Court has not expressed any opinion on the merits of the rival claims of the parties and therefore it will be open for them to file their respective claims/counter claims before the learned Arbitrator which will be decided in accordance with law.
14. A Copy of the order be forwarded to the learned arbitrator for information.
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