In a significant ruling, the Delhi High Court's full bench, comprising Justices Rekha Palli, Navin Chawla, and Saurabh Banerjee, addressed the critical procedural requirement under Section 34 of the Arbitration and Conciliation Act, 1996 (A&C Act). The court held that the omission to attach the impugned arbitral award when filing an application to set aside the award renders such a filing "non-est," meaning it is considered invalid and non-existent in the eyes of the law.
The case in question, Pragati Construction Consultants v. Union of India [FAO(OS)(COMM) 70/2024], was referred to the full bench to resolve a pivotal issue: whether the absence of the arbitral award alongside a Section 34 application constitutes a fatal defect. The appellant's counsel contended that Section 34 does not explicitly mandate the inclusion of the arbitral award with the application. They argued that, unlike other legal provisions such as Order XLI Rule 1 of the Civil Procedure Code (CPC) and Section 423 of the Companies Act, which specifically require the impugned order to be filed, Section 34 lacks such a stipulation. Additionally, they pointed out that the Delhi High Court (DHC) Rules do not prescribe the necessity of filing the arbitral award with the application, suggesting that its inclusion should not be deemed an essential condition.
Conversely, the respondent's counsel maintained that the consistent judicial stance has been that non-filing of the arbitral award renders the Section 34 application non-est. They emphasized that without the award, the court is incapacitated from evaluating the grounds on which the challenge is based, thereby hindering the judicial process. An intervenor in the case highlighted that despite multiple amendments to the A&C Act, there has been no legislative mandate requiring the impugned arbitral award to accompany a Section 34 application. This omission, they argued, implies that the non-filing of the award should not invalidate the application.
Upon thorough examination, the full bench underscored the indispensable role of the arbitral award in adjudicating challenges under Section 34. The court elucidated that, per Section 34(2)(a) of the A&C Act, an award may be set aside if the applicant demonstrates, based on the arbitral tribunal's record, specific violations during the arbitration proceedings. Moreover, under Section 34(2)(b), an award can be annulled if the subject matter is not arbitrable or if the award contravenes public policy. For domestic arbitrations, Section 34(2A) allows setting aside an award vitiated by patent illegality apparent on its face. The court reasoned that assessing these grounds necessitates a meticulous examination of the arbitral award itself. Without the award, the court cannot effectively scrutinize the merits of the challenge, rendering the application procedurally deficient.
The bench further articulated that the requirement to file the arbitral award is not a mere procedural formality but a substantive necessity. The absence of the award precludes the court from comprehending the context and content of the dispute, thereby obstructing the judicial review process envisaged under Section 34. This position aligns with previous judgments of the Delhi High Court, which have consistently held that non-filing of the arbitral award renders the application non-est.
In conclusion, the Delhi High Court's ruling reinforces the imperative that parties challenging an arbitral award under Section 34 of the A&C Act must attach the impugned award to their application. Failure to do so results in the application being treated as non-est, effectively nullifying the challenge. This judgment underscores the judiciary's commitment to ensuring procedural rigor and upholding the integrity of the arbitral process.
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