The Delhi High Court on June 23, 2020 in the case of Gammon India Limited v. National Highway Authority of India, decided upon the efficacy of multiple arbitrations arising under the same contract resulting in multiplicity of proceedings and its subsequent effect on the arbitral awards which is rendered.
Brief facts of the case:
In the instant case, the Gammon India (“Petitioner”) and the National Highways Authority of India (“Respondent”) had appointed three separate arbitral tribunals which adjudicated different disputes and claims arising out of a single construction contract for the work of widening to 4/6 lanes and strengthening of existing 2 lane carriageway of NH-5 in the State of Orissa.
The first, second and third arbitration were invoked on December 23, 2008, respectively. Out of the three awards, two awards i.e. the first and the third, had attained finality. The Petitioner had filed the instant petition under Section 34 of the Arbitration and Conciliation Act, 1996 (“the Act”) challenging the second award basis the findings of the arbitral tribunal in the third award.
Observations of the court:
The Delhi High Court while acknowledging that the perusal of the provisions of the Act stated that the statute envisages that disputes can be raised at different stages and there can be multiple arbitrations in respect of a single contract, however, criticized such multiplicity of arbitral forums arising out of single contract and adjudicating upon overlapping disputes functioning parallelly. The court further held that:
Decision by the court:
The Delhi High Court while disallowing the instant petition held that at the time of hearing a petition under Section 34 of the Act, it would be incongruous to hold that a finding in a subsequent award would render the previous award illegal or contrary to law. The award would have to be tested as on the date when it was pronounced, on its own merits, and not on the basis of subsequent findings which may have been rendered by a later arbitral tribunal. Also, in an attempt to further avoid multiplicity of tribunals and inconsistent/contradictory awards, as had arisen in the instant case, the following directions were issued by the court:
This update has been contributed by R. Sudhinder (Senior Partner) and Pierre Uppal (Associate).
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