Citation: O.M.P. (COMM) 31/2017
Date of Judgment: 12-February-2019
Court: Delhi High Court
Coram: J. Prathiba M. Singh
Issue: Can an award for allowing/rejection of an interim application be challenged under section 34 of the Arbitration Act prior to passing of a final award.
The petitioners in the case had an agreement in which they had undertaken production of a game and the telecast of which was approved by the Respondents. The Respondent is a public service broadcaster and on a later date they informed the petitioners that they will air the show and hence the petitioner invoked arbitration and a Sole Arbitrator was appointed by the Delhi High Court.
During the arbitration proceedings, the Petitioner filed an application before the arbitrator to correct certain claims in the Statement of Claim. The correction was to add the amounts to the claim of cost incurred in concept development, research scripting and appointing technicians. These claims had not been considered earlier in the Statement of claims and thus the Petitioner filed an application to make these corrections. The arbitrator refused to make the corrections as they were in nature of an amendment and so they were barred on the grounds of limitation. It is important to note that the description of these costs in the letter invoking arbitration had been mentioned. It was the order of the arbitrator that was challenged in the Delhi High Court.
The Respondents argued that the application made for correction was an amendment as in the Statement of claim a lesser amount was demanded. They also argued that the rejection of the application to amendment cannot be challenged as it does not constitute the elements of an award under section 34 of the Arbitration Act.
The Petitioners argued that there was a wrong quantification of the amounts made and hence an application to merely make corrections was filed and there was no major amendment that required to be made, it was just an application to correct the errors. Further, the order of the Arbitrator was a final rejection that was made and hence it could be challenged under section 34 of the Arbitration Act.
The Delhi High Court on the issue of the correction being an amendment and thus being barred on the grounds of limitation stated that, the letter invoking arbitration and the writ petition filed under section 11 of the Arbitration act also consisted all the claims that were required to be added and the application for such correction was also raised at the earliest point of time and hence these corrections should be allowed. The Court also held that in arbitration such corrections and amendments ought to be permitted and a narrow approach should not be adopted.
The Delhi High Court on the second issue of whether the order by the Arbitrator is a award and could be challenged under section 34 of the Arbitration Act. The Court stated that section 2 (1) (c) of the Arbitration act which defines an award includes an ‘interim award’ as well. The rejection of the application to make the corrections were rejected and hence there was a finality attached to the award and there is noting in the final claim that would be dealing with these claims and hence, the Court held that the impugned order is not just an interim award, but also rejection of certain substantive claims finally.
The Delhi High Court allowed the application to make the corrections to the Statement of Claim and also stated that the award could be challenged under section 34 of the Arbitration Act as there was finality attached to it.