The Court has held that although the Evidence Act does not strictly apply to arbitral proceedings under Section 19 of the Arbitration and Conciliation Act, the principles underlying Sections 91 and 92 of the Evidence Act especially the bar on using oral evidence to contradict the terms of a written, registered contract remain fundamental and must be respected when an award is tested under Section 34.

[30/11, 12:10] Sekarreporter: http://youtube.com/post/Ugkxm4vzTGptOMhcKynHhYy7pLoidI0nLzRC?si=lygEyTqz1l7pfdXa
[30/11, 12:11] Sekarreporter: [30/11, 12:08] Sekarreporter: The Court has held that although the Evidence Act does not strictly apply to arbitral proceedings under Section 19 of the Arbitration and Conciliation Act, the principles underlying Sections 91 and 92 of the Evidence Act especially the bar on using oral evidence to contradict the terms of a written, registered contract remain fundamental and must be respected when an award is tested under Section 34.

The Court further held that the arbitrator committed patent illegality by accepting an oral plea that a registered sale agreement was merely security for a loan, without the respondents proving any recognized exception to Section 92. This misapplication of foundational evidentiary principles directly affected the Arbitrator’s refusal to grant specific performance.

The Court also found the award self-contradictory, as the arbitrator rejected the agreement as a sale contract yet proceeded to analyse readiness and willingness, an approach which the Court held to be perverse.

The High Court strongly criticized the Arbitrator for adopting an incorrect reasoning methodology. Instead of first analysing the facts and then applying appropriate precedents, the Arbitrator began with case law and tried to fit the facts into those judgments. The Court held that reasoning must proceed from facts to law and not law to facts. This reversal of approach contributed to the finding of patent illegality in the award.

Consequently, the High Court set aside the entire award and left it open to the parties to initiate arbitration afresh, while also awarding costs of Rs. 5,00,000/-.

ADV. H .SIDDARTH FOR THE PETITIONER
[30/11, 12:08] Sekarreporter: 👍