Supreme Court Expresses Concern About Unnecessarily Long Oral Submissions & Bulky Written Submissions In Arbitration Cases
The Supreme Court emphasised that there is a need to impose time limit on oral submissions in such cases.
The Supreme Court expressed concern about the practice of making unnecessarily long oral submissions or bulky written submissions in Arbitration cases.
The Court was deciding Civil Appeals filed by Larsen and Toubro (L&T) Limited and others, challenging the Judgment of the Delhi High Court in the Appeals preferred under Section 37 of the Arbitration and Conciliation Act, 1996 (A&C Act).
The two-Judge Bench comprising Justice Abhay S. Oka and Justice Pankaj Mithal remarked, “The Courts have to devote page after page for dealing with many submissions which ought not be made considering the limited jurisdiction under Section 34 of the Arbitration Act. This results in very lengthy judgments. The high monetary stakes involved in the proceedings should not result in unnecessarily long oral submissions or bulky written submissions. All this results in the criticism about the arbitrations in India.”
The Bench further emphasised that there is a need to impose time limit on oral submissions in such cases.
Senior Advocates Krishnan Venugopal and Abhimanyu Bhandari represented the Appellants while Senior Advocate M.R. Shamshad represented the Respondents.
Brief Facts
The Appeals before the Division Bench were preferred against the Judgment of the Single Judge in a Petition under Section 34 of the A&C Act by which the award of the Arbitral Tribunal was set aside. The Division Bench by the impugned Judgment, disagreed with some of the findings recorded by the Single Judge and to that extent, the Appeals were allowed. The Appeal of L&T was dismissed, however, the Division Bench observed that the parties are left to pursue the appropriate course of actions under law. The Respondent company i.e., Puri Construction Limited (PCL) was in possession of lands in Gurgaon as the owner thereof. PCL had obtained licenses from the Director Town and Country Planning, Haryana (DTCP) to develop the lands for residential group housing schemes. Earlier, PCL had entered into a joint venture with ITC Classic Real Estate Finance Limited (ITCREF) under the name Florentine Estates of India Limited for the development of the lands.
Ultimately, ITCREF exited from the business and an Exit Agreement was made, which stipulated that PCL would transfer to ITCREF the built-up space of 1,95,000 sq. ft. in the project. Thereafter, L&T was introduced to complete the project. L&T (Appellant) and PCL (Respondent) entered into an agreement for land development (Development Agreement) and subsequently, since L&T was of the opinion that there was a recessionary trend in the real estate market due to which the project was required to be down-sized, a supplementary agreement was entered into between L&T and PCL. Based on the Supplementary Agreement, a Tripartite Agreement was entered into between PCL, L&T, and Lord Krishna Bank.
There was an arbitration to which ITCREF and PCL were parties and a consent award was passed in favour of ITCREF, requiring PCL to allot 1,06,200 sq. ft. to ITCREF. The High Court referred the dispute between PCL and L&T to a Sole Arbitrator and an arbitral award was passed. The Single Judge set aside the said award but the Division Bench upheld the dismissal of L&T’s counter-claim and also upheld the arbitral award to an extent it awarded the cost of arbitration to PCL. The title deeds deposited with the Registrar of the High Court were ordered to be released to PCL and the parties were allowed to pursue their appropriate course of action. The Division Bench allowed three Appeals preferred by PCL in part and dismissed the Appeal preferred by L&T. Both PCL and L&T, aggrieved by the Division Bench's decision, preferred the Civil Appeals before the Apex Court.
Reasoning
The Supreme Court in view of the above facts, noted, “As the termination of the Development Agreement is upheld, obviously, L&T cannot deal with the property in any manner and PCL can always deal with the same.”
The Court elucidated that the powers of the Appellate Court under Section 37 of the A&C Act are not broader than those of the Court under Section 34, and therefore, what cannot be done in the exercise of the powers under Section 34 cannot be done in an Appeal under Section 37.
“An Arbitral Award cannot be modified. Thus, even after recording the conclusions in paragraph no. 119, the Division Bench has not modified the Award by partly setting aside the Judgment under Section 34”, it said.
The Court further agreed with the views expressed by the Division Bench. It added that there is a tendency on the part of the senior members of the Bar to argue as if these proceedings were regular Appeals under Section 96 of the Code of Civil Procedure, 1908 (CPC).
“As the Members of the Bar are aware of the limited jurisdiction of the Courts in proceedings under Sections 34 and 37 of the Arbitration Act, they must show restraint. Similarly, we observe a tendency on the part of the Members of the Bar to rely upon a large number of decisions, whether relevant or irrelevant, while arguing Section 34 petitions and Section 37 appeals as well as appeals arising therefrom”, it also remarked.
The Court observed that multiple decisions are cited on the same proposition of law which makes hearing time-consuming. It added that, as there are long oral arguments, the Courts permit written submissions to be filed and that is how very long written submissions come on record.
“We cannot forget that this Court and the High Courts have the appellate jurisdiction in civil and criminal cases. These Courts should be in a position to also devote sufficient time to the cases of the common man. What we have expressed is a matter of serious concern and introspection for everyone”, it concluded.
Accordingly, the Apex Court dismissed the Appeals.
Cause Title- Larsen and Toubro Limited v. Puri Construction Pvt. Ltd. and Others (Neutral Citation: 2025 INSC 523)
Appearance:
Appellants: Senior Advocates Krishnan Venugopal, Abhimanyu Bhandari, AOR Rooh-e-hina Dua, Advocates Shreya Arora, Sameer Parekh, Sumit Goel, Sreeparna Basak, Abhishek Thakral, Jayant Bajaj, and Ishan Nagar.
Respondents: Senior Advocate M.R. Shamshad, AOR Shashank Singh, Advocates Aditya Samaddar, Arijit Sarkar, Zeb Hasan, and Prapti Shrivastava.
