12 May 2025 Legal Updates

DENIAL OF ADEQUATE OPPORTUNITY TO CROSS-EXAMINE PROSECUTION WITNESS SERIOUSLY PREJUDICES ACCUSED'S RIGHT TO DEFENCE': MADHYA PRADESH HC

(a) Case Title:

• Shyam Premchandani v. The State of Madhya Pradesh

(b) Court:

• High Court of Madhya Pradesh at Indore

(c) Date of Decision:

• May 7, 2025

(d) Bench:

• Hon'ble Justice Sanjeev S. Kalgaonkar

Facts

The petitioner, Shyam Premchandani, filed a criminal revision under Section 438 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023 and Section 397 of the Code of Criminal Procedure (CrPC), 1973, challenging an order dated February 19, 2025, passed by the Additional Sessions Judge, Dewas. The trial court had closed the petitioner's right to cross-examine the Investigating Officer (IO) when the petitioner's senior counsel was absent, despite the petitioner's request for an adjournment. The associate counsel had cross-examined another witness but requested time for the senior counsel to cross-examine the IO.

Legal Reasoning

The High Court held that:

• The right to fair trial is a fundamental guarantee under the rule of law that ensures proper administration of justice.
• Fair trial includes fair and proper opportunities to prove one's defence by cross-examining prosecution witnesses.
• Denial of adequate opportunity to cross-examine a material prosecution witness (especially the IO) can seriously prejudice the accused's right to defence.
• Closing the right to cross-examine the IO on the first opportunity was deemed harsh and improper, warranting intervention under the supervisory jurisdiction of the High Court.

Decision

The High Court set aside the impugned order and granted the petitioner an opportunity to cross-examine the Investigating Officer.

COURT CANNOT SET ASIDE ENTIRE ARBITRAL AWARD DUE TO FRAUD IN ONE CLAIM WHEN OTHER CLAIMS REST ON DIFFERENT GROUNDS: JHARKHAND HIGH COURT

(a) Case Title:

• M/s A2Z Waste Management (Ranchi) Limited v. Ranchi Municipal Corporation; Ranchi Municipal Corporation v. M/s A2Z Waste Management (Ranchi) Limited.

(b) Court:

• High Court of Jharkhand at Ranchi

(c) Date of Decision:

• May 6, 2025

(d) Bench:

• Hon'ble Chief Justice M.S. Ramachandra Rao and Hon'ble Mr. Justice Rajesh Shankar

Summary

This case involved two commercial appeals arising from the same judgment of the Commercial Court concerning an arbitration dispute between Ranchi Municipal Corporation (RMC) and M/s A2Z Waste Management (Ranchi) Limited (the Contractor).

Background

• RMC entered into a Concessionaire agreement with the Contractor for Municipal Solid Waste Management in Ranchi.
• Disputes arose during execution, and the Contractor terminated the contract in December 2013, invoking the arbitration clause.
• An Arbitral Tribunal was constituted, which passed an award on May 11, 2018, directing RMC to pay Rs. 6,41,24,500/- to the Contractor.
• RMC challenged this award before the Commercial Court under Section 34 of the Arbitration and Conciliation Act, 1996.

Commercial Court's Decision

The Commercial Court set aside the entire arbitral award based on the finding that the Contractor had committed fraud in one particular claim (related to supply of vehicles). The Commercial Court applied this finding to all claims, including those unrelated to the fraudulent claim.

High Court's Analysis

1. On the Contractor's Appeal:

• The High Court held that the Commercial Court erred in setting aside the entire award based on fraud found in only one specific claim.
• The Court noted that claims were unrelated to each other and could not be invalidated based on fraud in the vehicle procurement claim.
• The Court termed the Commercial Court's approach as "perverse."

2. On RMC's Appeal:

• RMC filed its appeal with a delay of 320 days and sought condonation under Section 5 of the Limitation Act.
• The High Court held that delays beyond 60 days should be condoned only in exceptional cases with sufficient cause.
• The Court found no valid or bona fide reason for RMC's delay in filing the appeal.

Key Legal Principles

• Under Section 34 of the Arbitration Act, the scope of challenge to an arbitral award is very narrow.
• Re-appreciation of evidence is not permitted as the Court does not sit in appeal against arbitral awards.
• Contractual interpretation is the prerogative of the arbitral tribunal.
• For limitation in commercial appeals, Section 13(1-A) of the Commercial Courts Act provides 60 days, and delays should be condoned only exceptionally.

Decision

• The Contractor's appeal was allowed, setting aside the Commercial Court's judgment that had invalidated the award.
• RMC's application for condonation of delay was dismissed, consequently dismissing their appeal.

COURT CAN APPOINT NEW ARBITRATOR U/S 11(6) OF ARBITRATION ACT IF DESIGNATED ARBITRAL INSTITUTION NO LONGER EXISTS: TELANGANA HC

(a) Case Title:

• Arbitration Application No. 266 of 2024

(b) Court:

• High Court of Telangana

(c) Date of Decision:

• 2nd May, 2025

(d) Bench:

• Hon'ble Sri Justice K. Lakshman

Facts

The applicant, a company engaged in steel plant equipment design, entered into a contract with the respondent on 28.04.2017 to set up a Single Stand Reversing 4-HI Wide Plate Hot Rolling Mill in Hyderabad. The project faced significant delays (26 months), which the applicant attributed to the respondent's actions such as: Delays in civil and structural works, Utilities and cranes readiness delays, Equipment delivery issues, Dengue pandemic effects, COVID-19 pandemic impact etc.

Despite timeline extensions, the respondent imposed liquidated damages of 10% on the applicant, which the applicant contested. A separate dispute arose regarding the respondent's use of the applicant's proprietary and confidential drawings for procurement.

Legal Issues

1. Whether the arbitration clause was enforceable despite the designated arbitral institution (ICADR) becoming defunct
2. Whether the court could appoint an arbitrator in such circumstances
3. Whether the disputes were arbitrable in nature

Court's Analysis and Findings

• The court confirmed the existence of arbitrable disputes regarding- Project execution delays, Imposition of liquidated damages and Use of confidential drawings.
• The court addressed the respondent's contention that the applicant should have first approached ICADR, noting that ICADR has been taken over by the India International Arbitration Centre and is essentially defunct.
• The court applied a "pragmatic approach" based on the Supreme Court's decision in Enercon (India) Ltd. v. Enercon Gmbh (2014), holding that when the intention to arbitrate is clear, courts should give effect to such intention even if an arbitration clause becomes unworkable.
• The court also cited ACC Ltd. v. Global Cements Ltd. (2012) to establish that a substitute arbitrator can be appointed when the originally designated arbitrator(s) are unavailable.

Decision

The court allowed the application and appointed Justice L. Nageswara Rao, Former Judge, Supreme Court of India, as the sole arbitrator to adjudicate the disputes between the parties.

Legal Principles Established

• Courts should adopt a pragmatic rather than technical approach when interpreting arbitration clauses.
• When a designated arbitral institution becomes defunct, the arbitration clause doesn't become unenforceable.
• The intention to arbitrate should be given effect to despite procedural obstacles.
• Clear arbitrable disputes should be referred to arbitration even when there are technical impediments.