Evidence for Misconduct by an Arbitrator

 By: Ravi Shankar
The Supreme Court of India has vide above judgment (M/s Cochin Shipyard Ltd. v. Apeejay Shipping Ltd. (2015) 43 SCD 113) answered the above question ‘No’ and clearly held that any misconduct by the Arbitrator should be manifestly discernible from record.

The Apex Court was hearing appeal petition filed by M/s Cochin Shipyard Ltd against the judgment and order passed by the High Court granting permission / liberty to Respondent to examine witness i.e. General Manager to establish legal misconduct. The Counsel for the Respondent contended that there was no bar under Section 30 and 31 of the Arbitration Act for adducing oral evidence and it was essential to examine the evidence of the General Manager to throw the light on the proceedings and establish legal misconduct of the Arbitrator.

On the other hand, the Counsel of the Appellant fairly contended that legal misconduct on the part of Arbitrator has to be demonstrated from the records of the arbitration proceedings and evidence of the General manager has already been taken before the Arbitration which could be read by the Court to learn and discern any perversity approach adopted by the Arbitrator.

The Apex Court relying upon catena of judgments on Award vitiated on the ground of legal misconduct by Arbitrator observed that thrust for the examination of the witness by Respondent was to substantiate the plea of legal misconduct, and this misconduct is not attributed to personal / individual misconduct.

Hence, the same is limited to non consideration of material documents by Arbitrator or Arbitrator differing from the significant observation observed by it at the time of arriving at the conclusion. Therefore, the aforesaid can be manifest or palpable from the proceedings of Arbitrator as a consequence of which the award is vitiated. Therefore, in the light of the same, any examination of witness to substantiate the claim of legal misconduct is unwarranted and not permissible.

Consequently, the Apex court partly allowing the appeal, directed that the Learned Civil Judge would requisition the records from the Learned Arbitrator and granted liberty to the Respondent to press the factum of misconduct from the said records.

Conclusion: In view of the above-mentioned judgment, the apex court re-affirmed the law on establishment of legal misconduct of Arbitrator by parties. The Court clearly laid down that additional examination of witness for proving or throwing light on legal misconduct by the Arbitrator is not permissible, and the same is discernible from the records of the arbitration proceedings. The said Judgment will surely protect the arbitrators from unnecessary harassment in the hands of difficult parties.
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