CONDUCT OF ARBITRAL PROCEEDING: SECTION 18
S.18- Equal treatment of parties
STATEMENT: The parties shall be treated with equality and each party shall be given a full opportunity to present the case.
PRINCIPLES OF NATURAL JUSTICE: The minimum requirement of a proper hearing should include:
· Each party must have notice of place, date and time of hearing
· Each party must have reasonable opportunity to be present throughout the hearing
· Each party must have reasonable opportunity to present statements, documents, evidence and arguments in support of case
· Each party must be provided by statements, documents and evidence adduced by other side
· Each party must have reasonable opportunity to cross-examine his opponents’ witness and reply to the arguments advanced
In case of O’Reily vs. Mackman (1983), Lord Diplock observed that, the right of a man to be given ‘a fair opportunity of hearing what is alleged against him and of presenting his own case is so fundamental to any civilised legal system that it is to be presumed that Parliament intended that a failure to observe it should render null and void any decision reached in breach of this requirement. The maxim ‘Nemo Judex in Causa Sua Potest’ is applicable when the court is concerned with a case of actual injustice but with the appearance of injustice, or possible injustice. In case of Maxwell vs. Deptt. Of Trade (1974), Lord Justice Lawson observed that “Doing what is right may still result in unfairness if it is done in the wrong way”. No doubt arbitrator is not bound by technical rules of procedure but he can’t ignore the principles of natural justice. Thread of natural justice should run through the entire arbitration proceedings and the principles of natural justice require that the person who is to be prejudiced by the evidence ought to be present to hear it takes, to suggest cross-examination, or himself to cross-examine and be able to find evidence, if he can, that shall meet and answer it; in short to deal with it in an ordinary course of legal proceedings as had been observed by the Court in the case of Wazir Chand Karam Chand vs. Union of India (1989).
Mustil and Boyd in the treatise also suggested some of the principles to be followed in the arbitration which can be as:
· Each party must have a full opportunity to present his own case to the tribunal.
· Each party must be aware of his opponent’s case, and must be given a full opportunity to test and rebut it.
· The parties must be treated alike and have the same opportunity in forwarding the case and to test that of the opponents.
DEFECTED PROCEEDINGS: In case of Spac and Co. vs. National Building Constructing Corporation (1989), the Court observed that if at any stage, there is any defect in the proceedings of the arbitration or kind of mishandling by the arbitrator, the court can set aside that so called arbitral award. An arbitrator has a very important judicial function to discharge. Any irregularity of action which is not consonant with the general principles equity and good conscience which ought to govern the conduct of the arbitrator amounts to misconduct has been stated in case of Indian Minerals Co. vs. Northern India Line Marketing Association (1958). Though the arbitrator is not strictly bound by the rules and procedures observed in court, it doesn’t mean that his procedure should be opposed to principles of natural justice. An arbitrator may proceed with the matter ex-parte if a party, despite notice, fails to take part in the arbitral proceedings.
In the case of Union of India vs. Mehta Teja Singh (1983), where the claim for recovery of amount from the contractor was based on the report of the technical examiner and the arbitrator didn’t order production of such a record though specifically requested by the contractor to do so, nor had himself seen the report, amounts to misconduct of the arbitration proceedings resulting in the denial of natural justice. In case of Mohidin Sahib vs. Ramaswami Chetti (1921), where an arbitrator communicated his information gained privately to the other arbitrators in the presence of the parties and they had opportunity of checking the information or of contradicting it, and the defendants actually admitted the information to be correct, in that case, the arbitrator can’t be accused of misconduct. It is improper on the part of an arbitrator to get information from one side in the absence of the other or to utilise information not accessible to others, but consent of the parties who are sui juris will cure the defect, but a minor’s guardian can’t waive the minor’s right to object the irregular procedure has been stated in case of Chintalapudi Sanyasirao vs. Chintalapudi Venkatrao (1923).