Principles Of Natural Justice Not Violated When The Opportunity To Make Oral Submission Is Not Availed: Delhi High Court

The bench of Justices Suresh Kumar Kait and Neena Bansal Krishna held that an Arbitrator has a right to manage the proceedings and to give directions to the parties to be present on a particular date, time and place and this would be sufficient compliance of the principles of natural justice.

The Court remarked that when the dispute between the parties was based on documents, merely because the oral arguments were not addressed by a party, does not lead to inevitable denial of principles of natural justice, unless it is shown that a pertinent aspect was left unconsidered.

Facts

The respondent, an advertising company, entered into a contract with the appellant, engaged in hospitality under "Fab Hotels." An agreement was signed on 26.04.2018, with the respondent offering advertising services. The contract term was 19.03.2018 to 18.06.2018, and an advance payment of Rs. 91,45,000/- was made. The remaining amount of Rs. 91,45,000/- was invoiced, and Rs. 69,60,000/- was paid.

Disputes arose, including delayed work, change in scope, and costs. The respondent filed its claims before the arbitrator.. The arbitrator awarded Rs. 33,70,182/-, leading to the appellant's objection, ultimately dismissed by the Commercial Judge on 19.02.2022. Aggrieved by the rejection of its application under Section 34, the appellant filed an appeal under Section 37 of the Act.

Grounds of Appeal

Opportunity to Address Oral Arguments:

• The appellant claims they were denied the opportunity to present oral arguments under Section 24 of the Act, 1996.
• They argue that this denial constitutes a violation of the principle of natural justice and has led to a miscarriage of justice.

Analysis by the Court

The Court examined the appellant's objection on 'audi alteram partem' in arbitration. As per Section 34(2)(a)(iii) of Arbitration and Conciliation Act, 1996, an award can be set aside if a party wasn't properly notified of arbitrator's appointment or proceedings.

The Court observed that dates were fixed for oral argument for the parties, however, on one occasion the counsel for the appellant sought adjournment due to ill health and the arbitrator allowed the adjournment, yet on the alternative date another adjournment was sought as the counsel for the appellant was busy with other professional commitments.

The tribunal closed the oral arguments and permitted the appellant to file written submissions, however, the appellant didn't submit its written submissions despite an extension being granted by the arbitrator. The Court observed that the arbitrator followed natural justice by granting multiple opportunities to the appellant, firstly, to make oral submissions and then to file written submissions, which were not availed by the appellant.

The Court observed that the between the parties was based on documents, merely because the oral arguments were not made by the appellant, it does not lead to inevitable denial of principles of natural justice, as the appellant could not show that a pertinent aspect was left unconsidered.

Accordingly, the Court dismissed the appeal.

Case Title: CASA2 STAYS PVT LTD v. BBH COMMUNICATIONS INDIA PVT LTD

Citation: 2023 LiveLaw (Del) 785

Date: 23.08.2023

Counsel for the Appellant: Mr. Tishampati Sen, Ms. Riddhi Sancheti, Mr. Anurag Anand & Mr. Himanshu Kaushal, Advocates.

Counsel for the Respondent: Mr. Amit Tyagi & Mr. Mukul Tyagi, Advocates.

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