A judge of the Delhi High Court, while hearing a petition challenging an arbitral award, clarified that though the principles of the Indian Evidence Act 1872 usually apply to arbitral proceedings, certain specific provisions of the Act do not apply.
The judgment arises out of the case of Millennium School v Pawan Dawar, OMP(1) in a petition filed by Millennium School under section 34 of the Arbitration and Conciliation Act 1996 assailing the award passed by the arbitral tribunal dated 28 February 2020. This case emanated from an agreement dated 1 April 2012 entered into by the parties wherein Pawan Dawar agreed to operate and maintain the school buses owned by Millennium School in addition to providing additional buses for picking up and dropping off the students and employees of Millennium School. The agreement was valid for period of eight years. Due to a certain alleged deficiency in the services provided by Pawan Dawar, Millennium School terminated the agreement by way of an email dated 5 August 2015. Aggrieved by the termination of the agreement, Pawan Dawar approached the High Court for constitution of an arbitral tribunal to adjudicate the disputes between the parties.
The impugned award partly accepted the claims made by Pawan Dawar. One of the primary grounds of challenge by Millennium School was that the arbitral tribunal had erred in concluding that Millennium School was not entitled to terminate the agreement during the lock-in period as per clause 33 of the agreement. The arbitral tribunal, in determining the termination by Pawan Dawar to be illegal, had further rejected the evidence put forth by the Millennium School on the grounds that the certificate filed under section 65-B (4) of the Act was defective.
Section 65-B of the Act deals with the manner in which electronic evidence is to be adduced in judicial proceedings. The section requires a certificate to be issued confirming that the electronic evidence has not been tampered with and is a true representation of the electronic evidence that exists in the electronic medium.
The arbitral tribunal based its decision that the termination of the agreement is illegal on the finding that the agreement cannot be terminated during the lock-in period on account of any grounds set out in clause 33 of the agreement. The High Court, after hearing the petition, negated such finding, and held that the arbitral tribunal's decision in rejecting the evidence placed by Millennium School on the ground that the requirement under section 65-B (4) of the Act was not satisfied was ex facie erroneous.
The High Court pointed out that though the arbitral tribunal had held that the certificate placed by Millennium School was inadmissible as it was defective, the party had not objected to it during the marking of the documents in evidence or at any other stage of the proceedings.
The High Court held that due to section 1 of the Act, the Act is not applicable to arbitration proceedings, yet the arbitral tribunal had disregarded the entire evidence led by Millennium School on the grounds that the certificate under section 65-B (4) of the Act filed by Millennium School was defective.
This judgment sheds light on the applicability of the provisions of the Act in arbitration proceedings. The judgment enunciates that the arbitral tribunal cannot reject evidence as not admissible on the grounds that no certificate under section 65-B of the Act was filed or that the certificate filed under section 65-B (4) of the Act is defective.
For further information on this topic please contact Thriyambak Kannan or Hareepriya Narasimhan at Khaitan & Co by telephone (+91 11 4151 5454) or email ([email protected] or [email protected]). The Khaitan & Co website can be accessed at www.khaitanco.com.
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