Date of Judgment: January 9, 2025
Case: State of Uttar Pradesh & Anr. vs. R.K. Pandey & Anr.
Verdict: Ex parte arbitration awards set aside

Key Highlights

The Supreme Court, in a landmark judgment, emphasized the critical importance of adhering to procedural frameworks in arbitration proceedings, including the proper appointment of arbitrators and respect for principles of natural justice. Two ex parte arbitration awards were declared null and void due to fraudulent conduct and lack of subject matter jurisdiction.

Observations

1. Procedural Integrity in Arbitration:
   • Arbitration relies on party autonomy within a defined procedural framework.
   • Arbitrators must exhibit impartiality and independence, holding themselves to a standard no less than that of judges.
2. Core Violations in the Case:
   • Respondent No. 1, R.K. Pandey, unilaterally appointed arbitrators, bypassing the arbitration clause.
   • No valid arbitration agreement existed between the parties.
   • The ex parte awards lacked enforceability due to fraud and absence of jurisdiction.
3. Judicial Precedents Referenced:
   • The Constitution Bench in Central Organisation of Railway Electrification v. ECI PIC SMO MCPL (JV) reinforced the mandatory nature of Section 18 of the Arbitration and Conciliation Act, 1996.
4. Key Legal Provisions:
   • Section 18 (Equality of treatment) and Section 34 (Setting aside arbitral awards) of the Arbitration and Conciliation Act, 1996.
   • Section 47 of the Code of Civil Procedure, 1908, allowing objections to decrees based on fraud or lack of jurisdiction.

Verdict

The Supreme Court:

• Declared the two ex parte arbitration awards null and void.
• Dismissed execution proceedings based on the awards.
• Awarded costs to the appellants for the entire litigation process.

This judgment reinforces the judiciary’s commitment to maintaining fairness and integrity in arbitration while curbing misuse of the process for personal gains.

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Ensure compliance with arbitration procedures to uphold justice and fairness.