Arbitration – Section 37 – Issues never canvassed before the Arbitrator and in section 34 petition cannot be raised afresh in appeal
Arbitration – Section 37 – Issues never canvassed before the Arbitrator and in section 34 petition cannot be raised in appeal under Section 37
Deceased Sheru and Suleman were the partners of the respondent no.1 partnership of restaurant business at Mumbai as per the deed dated 7.11.1960. Thereafter, four deeds of partnership were executed in 1965, 1970, 1975 and 1992.
On 26.8.2002, Sheru died but his legal heirs i.e. appellants and one Abdul Wahid were not inducted in the partnership business. The disputes between the parties led the Firm to file a suit in 2003 against the appellants for injunction. Another suit was filed in 2006 for recovery of possession of the restaurant premises.
On 12.9.2006, the High Court referred the disputes between the parties in both the suits and other disputes to arbitration.
The Arbitrator passed the award for restoration of restaurant to the Firm and granted compensation. This was confirmed in the arbitration petition by the learned Single Judge.
In appeal before the Division Bench, number of contentions were raised by the appellants to challenge the award and also the order in the arbitration petition.
HELD (i) the appeal must fail since the award was challenged on grounds afresh and never taken before the Arbitrator and the Single Bench; (ii) the order of Single Bench is not assailed in appeal, whereas, the entire challenge in the appeal is to the award; (iii) the contention that the partnership deeds were not stamped and registered was taken for the first in section 37 appeal. Secondly, there is no compulsory registration of partnership deeds. Moreover, fourth and fifth deeds were on stamp paper of Rs.100 as per requisite stamp duty of Article 4 of the Bombay Stamp Act, 1958. Similarly, the reference to arbitration was not as per partnership deeds but by consent of the parties pursuant to the order of the Court; (iv) there is no patent illegality in the award and (v) a party which has not filed section 34 application to challenge award cannot assail award on any ground in appeal. The Award has attained finality against such a party.
Judgment dated 25.10.2023 of the Division Bench of the Bombay High Court in Commercial Appeal No.18 of 2023 in Comm.Arbitration Petition No.1286 of 2019 in Azizur Rehman Gulam Rasool and another Vs. M/s. Radio Restaurant, a partnership firm, Mumbai and others.
