S. HARINDER SINGH Vs. S. NIRMAL SINGH

JUDGEMENT

(1.) The appellant has filed the present appeal under Section 37(1)(b) of the Arbitration and Conciliation Act, 1996 (for short 'The Act') to challenge the order dated 29.02.2008 passed in OMP No.261/2003, whereby the learned Single Judge of this Court has allowed the objections under Section 34 of the Act in respect of the award made by the Arbitrator Mr. Haji Ayamuddin on 04.04.2003, and consequently set aside the award made in favour of the appellant.

(2.) The learned Single Judge has returned the finding that an arbitration agreement existed between the parties to refer their dispute with regard to distribution of US$ 5,50,000/- to arbitration of a sole Arbitrator and not to two Arbitrators, as contended by the respondent. However, the learned Single Judge held that the arbitration agreement was void as it provided that the Arbitrator would arbitrate all financial matters only with the consent of the appellant, who was the main contender in the dispute. The learned Single Judge held that if the Arbitrator?s decision is to be made with the consent of one of the parties to the dispute, then such an agreement cannot be considered to be an arbitration agreement. The learned Single Judge also held that the Arbitrator had made an award in the absence of the parties who were effected thereby. In substance, it was held that the award had been made in breach of principles of natural justice.

(3.) The learned Single Judge also ruled on the scope of the arbitration agreement. According to the appellant, the scope of the arbitration agreement encompassed all the properties dealt with by the learned Arbitrator in the impugned award as, according to the appellant, they were purchased from out of the funds remitted from Afghanistan to India, or out of businesses set up by capital funds provided by, or remitted from Afghanistan. While, according to the respondents, the scope of the arbitration agreement was merely limited to distribution of the amount of US$ 5,50,000/- which was the sale proceeds realized upon the sale of house at Wazir Akbar Khan, Kabul, Afghanistan, upon the taking of accounts. The learned Single Judge held that the scope of the arbitration agreement was confined to distribution of US$ 5,50,000/- and nothing more.