Grounds not urged in an appeal against arbitral award may not be raised in second appeal

Delhi High Court: A Division Bench comprising of G.S Sistani and V Kameswar Rao, JJ., dismissed an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter “Arbitration Act”) read with Section 10 of the Delhi High Court Act, 1966 and Section 13 of the Commercial Courts Act, 2015 against the order of a Single Judge wherein the appellants had raised objections against the award of the arbitrator under Section 34 of the Arbitration Act.

The crux of the argument of the appellants was that the arbitrator failed to follow the principles of natural justice by not making a full and fair disclosure that he had been appointed as an arbitrator by the respondent in as many as 43 cases prior to the present case. The appellants pleaded that on this ground alone, the award rendered by the arbitrator should be set aside. The appellants, admittedly, had not urged this argument before the Single Judge.

The Court noticed that the arbitrator had issued a notice to the parties, wherein the following relevant sentence was quoted, “….currently adjudicating on multiple claims filed by the claimant company.” The order-sheet reflected that the hearing was attended by counsel for both parties. Consequently, the Court found no grounds for interfering with the order passed by the Single Judge for two reasons. The first being that the argument urged before the Court was not raised in front of the Single Judge, and secondly, the judgment in Aditya Ganapa v. Religare Finvest Ltd. (OMP No. 1038 of 2014, decided on 30.01.2015) relied on by the appellants did not fit in the factum of the present case where the arbitrator had indeed, disclosed his interest to the parties. Appeal dismissed. [Sidhi Industries v. M/s Religare Finvest Ltd.,  2017 SCC OnLine Del 12685, decided on 11.12.2017]

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