Appellant Cannot Be Permitted To Now Place On Record The Said Documents Once He Did Not Even Bother To File A Written Statement Of Defence: PH High Court Dismisses Application in Arbitration Dispute Over Rice Mill Lease

The Punjab and Haryana High Court on Thursday confirmed the dismissal of an appeal by M/s Gaurav Rice Industries, which contested an arbitral award favoring The Haryana State Coop. Supply and Marketing Fed. Limited (HAFED) regarding a breach of a rice mill lease agreement.

Legal Point of the Judgment: The judgment centered on the appellant’s attempt to challenge an arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996, following their failure to fulfill the terms of a lease agreement.

Facts and Issues: The dispute originated from a lease agreement where the appellants failed to comply with payment and other obligations, leading to arbitration. The appellants did not submit a written statement of defense during arbitration and later attempted to introduce new documents through a Section 151 CPC application, which was dismissed by the lower court, along with their Section 34 petition challenging the arbitral award.

1. Application under Section 151 CPC: The court denied the appellants’ request to admit late-submitted documents, emphasizing the absence of a written statement of defense as a significant oversight in arbitration participation.

2. Section 34 Petition Dismissal: The appellate court supported the lower court’s decision, noting the appellants’ failure to effectively engage in the arbitration left the claims unchallenged, affirming the arbitral award.

3. Interference with Arbitral Award: The High Court reiterated its stance that judicial interference in arbitral awards is constrained and focused only on issues of legality and compliance with public policy, not on reassessment of factual determinations.

Decision: The High Court dismissed both the application under Section 151 CPC and the appeal against the Section 34 petition dismissal, affirming that the arbitration was conducted fairly and the appellants missed their opportunity to contest effectively.

Date of Decision: April 5, 2024

M/s Gaurav Rice Industries and another vs. The Haryana State Coop.