SC on adducing additional evidence in proceedings u/s34 of Arbitration Act

The Hon’ble Supreme Court, on 23rd September 2019, in the matter of M/S. Canara Nidhi Limited v. M. Shashikala And Others pronounced that in an application under Section 34 of the Arbitration and Conciliation Act, cross-examination of persons swearing in to the affidavits should not be allowed unless absolutely necessary.To adduce additional evidence at such stage, applicant should indicate as to what point is intended to be adduced, the necessity and relevance of the additional evidence sought to be adduced and the specific documents or evidence required to be produced. Merely stating that the applicant intends to adduce additional evidence relating to the subject of dispute is insufficient.

Question before the court

Whether the parties can adduce evidence to prove the specified grounds in sub-section (2) to Section 34, in an application under Section 34 of the Arbitration and Conciliation Act, 1996 seeking to set aside the award ?

Hon’ble Supreme Court’s Observation

The proceedings under Section 34 of the Arbitration and Conciliation Act, 1996 are summary in nature. The scope of enquiry in the proceedings under Section 34 of the Act is restricted to a consideration whether any of the grounds mentioned in Section 34(2) or Section 13(5) or Section 16(6) are made out to set aside the award. The grounds for setting aside the award are specific. It is imperative for expeditious disposal of cases that the arbitration cases under Section 34 of the Act should be decided only with reference to the pleadings and the evidence placed before the arbitral tribunal and the grounds specified under Section 34(2) of the Act. (Para 9)

Though the applications under Section 34 of the Act are summary proceedings, an opportunity to the aggrieved party has to be afforded to prove existence of any of the grounds under Section 34(2) of the Act. (Para 12)

The legal position is thus clarified that Section 34 application will not ordinarily require anything beyond the record that was before the arbitrator and that cross-examination of persons swearing in to the affidavits should not be allowed unless absolutely necessary. (Para 17)

For adducing additional evidence in proceedings under Section 34 of the Arbitration Act, applicant should indicate as to what point is intended to be adduced, the necessity and relevance of the additional evidence sought to be adduced and the specific documents or evidence required to be produced. Merely stating that the applicant intends to adduce additional evidence relating to the subject of dispute is insufficient. (This inference has been drawn on the basis of Para 18)

The proceedings under Section 34 of the Act are summary proceedings and is not in the nature of a regular suit. By adding sub-sections (5) and (6) to Section 34 of the Act, the Act has specified the time period of one year for disposal of the application under Section 34 of the Act. The object of sub-sections (5) and (6) to Section 34 fixing time frame to dispose of the matter filed under Section 34 of the Arbitration Act, 1996 is to avoid delay and to dispose of the application expeditiously and in any event within a period of one year from the date of which the notice referred to in Section 34(5) of the Act is served upon the other party. (Para 19)

Copy of judgement: Judgement_23-Sep-2019

-Adv. Tushar Kaushik

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