Matter: Kanodia Infratech Limited v. Dalmia Cement (Bharat) Limited
Order dated: 08 November 2021
Summary:
Kanodia Infratech Limited (Kanodia) and Dalmia Cement (Bharat) Limited (Dalmia) were involved in the business of manufacturing and marketing of cement. Dispute arose and Dalmia invoked arbitration and appointed a sole arbitrator who heard both sides and granted several reliefs to Kanodia. Kanodia challenged the arbitral award arguing that the arbitrator lacked inherent jurisdiction to entertain the dispute since he was appointed unilaterally by Dalmia which went contrary to the settled proposition of law. Kanodia also asked the Court to set aside the arbitral award.
The Delhi HC was of the view that unilateral appointment of an arbitrator cannot be challenged through a petition filed under the Arbitration Act as the scope of interference in arbitral award is very limited and can be explored only when an arbitral tribunal goes beyond the scope of contracts or agreements and exceeds its jurisdiction. Further, HC held that the appointment of the arbitrator was not objected to by Kanodia who actively participated in the arbitration proceedings, and therefore relief cannot be claimed at such a later stage. Moreover, as the arbitrator was also a retired judge of Punjab and Haryana HC, the SC was opined that his integrity cannot be doubted. Accordingly, the HC disposed of the petition.
