Home > Recent Judgements > The Supreme Court Overturns Awards Against The Uttar Pradesh Government In Sham Arbitration Proceedings Totaling More Than Rs 46 Lakhs
Jan 10, 2025
INTRODUCTION
In the case between State of Uttar Pradesh and another VS R.K Pandey and another, the Supreme Court of India recently reversed arbitration verdicts against the Uttar Pradesh (“UP”) government totaling more than Rs. 46 lakhs in a historic ruling. The court’s ruling highlights the judiciary’s dedication to preserving the values of justice and equity while exposing the malpractice of phony arbitration processes. The conflict centered on many arbitration rulings against the government of UP. Alleged contract violations involving state authorities served as the basis for these awards. But after more investigation, it became clear that these processes were marred by fraudulent activities and procedural flaws.
KEY ISSUES
- Whether the arbitration proceedings conducted by Respondent No.1, were a sham and fraudulent?
- Whether respondent had the legal authority to unilaterally appoint arbitrators under the alleged arbitration agreement?
- Whether the ex-parte arbitration awards are valid and enforceable against the State of Uttar Pradesh and the Principal GSVM Medical College, Kanpur?
- Whether the objections to the arbitration awards raised by the appellants were barred by limitation and thus not admissible?
JUDGMENT
The Supreme Court annulled the ex-parte arbitration awards on the basis of fraud, stating that the respondent who single handedly appointed the sole arbitrators made a mockery of the arbitration against the U.P. Government and the Government’s hospital where he was working. The Court found that the respondent was not a party to the said arbitral agreement or commission which was rather a sham and was not supported by the relevant parties. The Court held the awards disputed as unjustified and annulled them, refused to go on with the execution of the awards as well and put emphasis on the fact that such act of appointing an arbitrator by one party precluded impartiality and fairness which amounted to a fraud and lack of jurisdiction over the subject matter.
OBSERVATION
The Supreme Court’s ruling in this case underscores the importance of integrity and fairness in arbitration proceedings. The Court’s observation emphasizes that the unilateral appointment of an arbitrator by one party, especially when it lacks proper authorization or involvement of all relevant parties, compromises the impartiality and credibility of the process. By annulling the ex-parte arbitration awards, the Court not only addressed the fraudulent nature of the proceedings but also reinforced the necessity for transparency, fairness, and adherence to due process in arbitration, ensuring that justice is upheld in disputes involving state authorities.
For more information or queries, please email us at
[email protected]
