Redeye (Director) 20 January 2015

Appeal against arbitration award

The construction & sale agreement for a building project had a specific clause where all disputes were to be addressed by a single arbitrator to be appointed unilaterally by the builder.The agreement also had a clause where it was specifically mentioned that both the builder & the owner purchasing a flat ,are bound by the arbitrator's award

one of the owners ,filed for an arbitration due to some amenities not being completed.The builder unilaterally appointed the arbitrator & the arbitrator ruled in favor of the owner saying that the builder has clearly violated the agreement .He also in his findings brought out two criminal acts by the builder under AP Apartment act 1987

Now the builder has gone for an appeal in the district court .Can he go for an appeal when there is specific clause in the agreement to be bound by the arbitrator's award & the arbitrator has been unilaterally appointed by him.

What should the owner do ?Can he ask the district court to dismiss the petition since it is a violation of the agreement itself

Reply Follow

7 Replies

Rama chary Rachakonda (Secunderabad/Telangana state Highcourt practice watsapp no.9989324294 ) 20 January 2015

Although not by way of challenge, many countries permit appeals on a point of law. You can appeal in the High court.

Tuhin Batra (Advocate) 20 January 2015

Any party aggrieved by an arbitral award can go for an appeal in the court under section 34 of the Arbitration and Conciliation Act, 1996. However the appeal should be made within 3 months from the date of the award or within another 30 days after 3 months, only if the court allows but not after that. The grounds for challenging the award are also limited to the ones provided in the Section 34.

Redeye (Director) 21 January 2015

@Tuhin Batra .While one can appeal against the award, there is a specific clause which says both parties are bound by the award & the arbitrator has been appointed by the builder itself.So wont it amount to violation of the agreement itself

Redeye (Director) 21 January 2015

@ramachary64 you please amplify what you have said since i have not understood what you have said

Tuhin Batra (Advocate) 21 January 2015

@Venkatesh. Parties can still go to the court. The phrase "parties are bound by the award" does not mean that that the parties are not free to challenge the award. You are not interpreting the phrase correctly. Even if there is a clause in the agreement which says that parties cannot challenge the award in court, the court will struck down such a clause. Such a clause will be void as per section 28 of Indian Contract Act which says that an agreement in restraint of legal proceedings are void.

Redeye (Director) 29 January 2015

@ramachary64 Please refer our talk where i had informed you about sending my queries through e mail to your e mail ID .I had already sent it on 27 Jan 2015 & am still waiting for a reply to the e mail that i had sent to you.If you have not received the e mail kindly let me know so that i can post the queries here

Redeye (Director) 29 January 2015

@Tulin Batra Thanks for your reply.I am better informed now.I do understand now that the builder had put the clause to mislead us.How can i use this against him the court case .The exact wordings of the clause were that the "Arbitrator's award will be final & binding on both the parties".

In a lighter vein can this clause be used to void the agreement ?