Absence Of Records Leads Unerringly To Conclusion That No Arbitral Proceedings Or Awards Ever Existed: Calcutta High Court

The Court made the observations noting that the respondent’s failure to produce any document pertaining to the arbitration rendered the alleged awards legally unsustainable.

The Court further held that fraud under Section 34 of the Arbitration and Conciliation Act, 1996 (the Act) does not necessarily require identifying a specific individual responsible for the act. It observed that the alleged awards were “conspicuous by their absence”, indicating a form of fraud arising from omission rather than commission.

Justice Sabyasachi Bhattacharyya observed, “…the utter absence of any relevant document whatsoever to directly prove the carriage of arbitral proceedings and/or of any award which is valid and enforceable in the eye of law shocks the judicial conscience of the Court and is in conflict with the basic notions of morality and justice in the sense as used in Explanation 1(iii) of sub-section (2)(b)(ii) of Section 34 of the 1996 Act. It would be a gross perpetration and perpetuation of injustice, quite antithetical to notions of due process of law, if the non-existent purported awards which are assailed herein are upheld to be valid and enforceable awards in the eye of law. Thus, the impugned purported awards are in conflict with the public policy of India, being not only induced and affected by fraud and corruption but also in conflict with the basic notions of morality and justice”.

“It is not necessary that, in order to arrive at the conclusion that an award is “induced or affected by fraud”, as contemplated in Explanation 1 (i) of subsection (2)(b)(ii) of Section 34 of the 1996 Act, the act of fraud has necessarily to be attributed a particular person. The Section 34 Court has to proceed on the basis of the materials before it and cannot convert itself into an investigating agency to trace out the perpetrators of the fraud. Suffice to say that the impugned arbitral awards are conspicuous by their absence. The nature of fraud found herein is not by commission but by omission, since the court comes to the conclusion that there was no existence of the alleged arbitral proceedings and/or arbitral awards, on which the respondent relies, at all”, the Bench further noted.

Senior Advocates Jayanta Kumar Mitra and Tilak Kumar Bose appeared for the petitioner and Senior Advocate Ranjan Bachawat appeared for the respondent.

In the matter, the petitioner challenged two purported arbitral awards allegedly passed in disputes arising out of equipment finance agreements between the parties. The petitioner contended that no arbitral proceedings had ever been conducted and that no signed copies of any awards were served upon it.

Thereafter, during the proceedings, the respondent also failed to produce any documents relating to the arbitration, such as pleadings, notices of hearings, minutes of proceedings, or copies of the awards, leading the Court to examine whether any valid arbitration had taken place at all.

Now the Bench while referring to Section 31(5) of the Act, noted that it requires a signed copy of the arbitral award must be delivered to each party, since no such signed copies were served, even if proceedings had taken place, they would not amount to a valid and enforceable award.

The Court also found it suspicious that the arbitrator had demanded substantial arbitral costs solely from the petitioner, including conveyance and venue charges during the COVID-19 period, even though the purported awards allegedly directed both parties to bear their own costs.

“…the inclusion of conveyance charges and venue charges in the arbitral costs claimed by the learned Arbitrator in her letter to the petitioner during the thick of the Pandemic period, in conjunction with the failure of the respondent to produce any document directly related to the arbitral proceedings, including copies of the pleadings of the parties, documentary evidence, interlocutory applications/objections, minutes of the arbitral proceedings and/or notice of any of the sittings to either of the parties, leads unerringly to the conclusion that there were neither any arbitral proceedings nor any awards passed therein”, it thus observed.

Furthermore, the Bench observed that although the petitioner was required to prove the negative fact that no arbitral proceedings existed, such failure “pales into insignificance” when the respondent itself failed to produce any material connected with the arbitration, including pleadings, evidence, notices of hearings, minutes of proceedings or even a signed copy of the alleged awards.

Cause Title: Srei Equipment Finance Limited v. Roadwings International Private Limited [Neutral Citation: 2026:CHC-OS:88]

Appearances:

Petitioner: Jayanta Kumar Mitra, Sr. Adv., Tilak Kumar Bose, Sr. Adv., Sankarsan Sarkar, Aditya Kanodia, Sharfaa Ahmed, Advocates.

Respondent: Ranjan Bachawat, Sr. Adv., Soumabho Ghosh, Orijit Chatterjee, Shubham Raj, Safura Ahmed, Advocates.

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