M/S OSWAL WOOLLEN MILLS LTD. versus M/S OSWAL AGRO MILLS LTD.

Citation: [2018] 3 S.C.R. 1062 · Decided: 13-04-2018 · Supreme Court of India · Bench: R.K. AGRAWAL · Disposal: Dismissed

Cited by 1 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

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1062
SUPREME COURT REPORTS
[2018] 3 S.C.R.
M/S OSWAL WOOLLEN MILLS LTD.
v.
M/S OSWAL AGRO MILLS LTD.
(Civil Appeal No. 3776 of 2018)
APRIL 13, 2018
[R. K. AGRAWAL AND R. BANUMATHI, JJ.]
Arbitration Act, 1940 – ss.3, 20, 30, 33 and Art.4 of the First
Schedule – Disagreement between arbitrators – Reference to Umpire
– Issue as to whether Umpire is to hear the matter de novo or from
the stage of disagreement between the Arbitrators – Agreement
between appellant and respondent – Breach of agreement – Matter
referred for Arbitration by two Arbitrators – In view of lack of
consensus between the Arbitrators, matter referred to the Umpire –
Umpire passed an award in favour of the respondent – Objections
filed by appellant, rejected by High Court holding that the appellant
did not make any serious endeavour for getting the evidence
recorded again before the Umpire and waived the right of de novo
trial by conduct – Division Bench dismissed the appeal by appellant
– On appeal, held: The very essence of the law of arbitration is to
settle the matter efficiently in a time bound manner – When the
Umpire enters upon a Reference and replaces the arbitrators, he is
needed to review the evidence and submissions only on those matters
about which the arbitrators had disagreed – However, if either of
the party makes an application for de novo hearing, the Umpire is
bound to allow the same, subject to the condition that the application
is made at the earliest and is not being used as last armory to turn
the case around – An objection on the ground that the Umpire has
not reheard the evidence may be waived by the conduct of the parties
– In the instant case, the belated application filed by appellant on
29.01.2000 for commencement of proceedings de novo was not
asking for re-hearing/re-recording of the evidence but was actually
for reviewing the order of the two Arbitrators and thus was nothing
but a last armory to turn the case around – Conduct of the appellant
amounts to waiver – No infirmity or error in the approach and
judgments passed by the courts below – Waiver.
[2018] 3 S.C.R. 1062
1062
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1063
 Arbitration – ‘De novo’  hearing – Meaning of – Discussed.
Interpretation of Statutes – Purposive interpretation – When
to be given – Discussed.
Dismissing the appeal, the Court
HELD: 1.1 The very essence of the law of arbitration is to
settle the matter efficiently in a time bound manner. Hence, when
the Umpire enters upon a Reference and replaces the arbitrators,
he is needed to review the evidence and submissions only on
those matters about which the arbitrators have disagreed unless
either party applies for the rehearing of the evidence of the parties
or their witnesses. The Umpire can surely go through the
evidence recorded by the previous arbitrators but without being
influenced by the opinion expressed by them in that regard and
even the notes taken by previous arbitrators can be relied if there
exist special provisions in the agreement permitting him to do
so.  However, if the party makes an application for de novo hearing,
the Umpire is bound to allow the same, subject to the condition
that the application is made at the earliest and the applicant is
not using it as last armory to turn the case around. An objection
on the ground that the Umpire has not reheard the evidence may
be waived by the conduct of the parties; the evidence already
recorded before the previous arbitrator would remain valid and
it would not be open for the parties to get the same recorded
afresh later on. It is a well settled proposition that where a party
seeking to impeach an Award has made no application to the
Umpire for rehearing of the evidence, the same would generally
operate as a waiver by conduct. [Para 13][1070-A-D]
1.2  The word de novo hearing should be given a purposive
interpretation and it should be understood as a fresh hearing of
the matter on the basis of pleadings, evidence and documents on
record. If the party wants to re-examine a witness or objects to
the documents admitted, the Umpire is to hear the parties and
decide the application in the interest of justice. [Para 15][1071-
C]
1.3 The very first communication dated 24.05.1999, on
which the appellant-Company had relied upon was a letter written
to the Umpire with regard to the pending proceedings in the said
M/S OSWAL WOOLLEN MILLS LTD. v. M/S OSWAL AGRO
MILLS LTD.
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1064
SUPREME COURT REPORTS
[2018] 3 S.C.R.
matter before the High Court and 

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