Court rules that Arbitrator's decision can proceed despite withdrawal of respondents' counsel and non-submission of promised documents.
In a significant ruling, the Madras High Court, presided over by Justice K. Kumaresh Babu, has affirmed the authority of an arbitrator to proceed with an award despite the respondents' failure to submit promised documents and the subsequent withdrawal of their counsel. The case involved applicants Vatchala Kanagasabapathy and another against M/s. Eros Theater Shantha Sundaram Mahal and others, where the respondents were required to deposit rental arrears collected from the assets of a partnership firm.
The dispute, which was under arbitration, saw the respondents' counsel undertaking to produce certain documents post-arguments. However, these documents were not submitted, and the respondents' counsel later withdrew their representation. The arbitrator, in a letter dated July 1, 2026, addressed to the counsels, indicated readiness to proceed with the award, stating that if the respondents were aggrieved, the matter could be addressed in the award's passing.
Justice Babu observed that once a matter is reserved for an award, the arbitrator is not obliged to seek further consent from the respondents, especially when their counsel has undertaken to produce documents but failed to do so. The court emphasized that the withdrawal of the respondents' counsel does not prejudice the proceedings, allowing the arbitrator to base the decision on the records already available.
The court further noted that the application filed by the applicants was also the subject of the arbitration proceedings, and with the arbitrator ready to pass the award, no additional orders were necessary. Consequently, the application was closed without costs.
This ruling underscores the importance of adhering to procedural commitments in arbitration and reinforces the arbitrator's authority to render decisions based on available records when parties fail to fulfill their obligations.
Bottom line:-
Arbitration - Arbitrator's authority to proceed with passing of an award when documents promised by respondents were not produced, and the matter was reserved for orders, upheld. Withdrawal of vakalat by the respondents' counsel after reservation for orders does not prejudice the proceedings.
Statutory provision(s): Arbitration and Conciliation Act, 1996
