New Delhi: The Supreme Court on Wednesday quashed an arbitration award by advocate S T Madnani in a dispute over damage to agricultural produce kept in Wadhwani Parmeshwari Cold Storage of Nagpur in 2004.
The Bench of Justices Mrs R Banumathi and A S Bopanna quashed the judgment of the Nagpur Bench of the Bombay High Court on 30/31 August 2017 upholding the arbitration award in the dispute and restored the judgment of the Principal District Judge, Nagpur, setting aside the award.
It also gave the liberty to the parties for another arbitration, leaving open their claims and counter claims.
The dispute arose between Suresh Wadhwani, who manages the cold storage, and sons of Bhaiyalal Jain engaged in the business as commission agents over the damage caused to 50 bags of "Shingada" kept in the cold storage.
Jains'' notice of damage was not only denied by Wadhwani but also went ahead with arbitration as agreed in the receipt issues for the storage of goods.
Bhaiyalal Jain, father of the appellants, objected to arbitration by advocate Madnani since he had appeared for a partner of Wadhnani in some case. Madnani, however, went ahead with arbitration without participation of Jains and ordered them to pay the claim of the cold storage plus cost of Rs 43,000.
The district judge, Nagpur quashed the arbitration award on November 6, 2006, but the Bombay High Court restored it on the ground that the arbitrator need not be biased because he had appeared as a lawyer for the party in another case.
The Apex Court said the arbitrator should have recused himself on objections raised about him, particularly when one side did not participate in the arbitration proceedings. "...when one is required to judge the case of another, justice should not only be done, but it should also seem to be done is the bottom line," the court added.
