Overview

In this matter, the Delhi High Court examined whether a party could rely upon a document which originated from a separate arbitration proceeding. The dispute arose from a challenge to an arbitral award under Section 34 of the Arbitration and Conciliation Act 1996.

JPC Infrastructure had challenged the award, specifically the findings of the Tribunal as to certain claims. Its main issue was that the Tribunal refused to rely upon a letter dated 7 June 2017. The letter, as per JPC, supported its case regarding the delays in the project.

The Court had to consider whether the Tribunal was justified in refusing to rely on the letter and whether such a decision amounted to patent illegality or any other ground for interference under Section 34.

Facts of the Case

The dispute arose from the Eastern Dedicated Freight Corridor Project being executed by the Dedicated Freight Corridor Corporation of India Limited (DFCCIL). Alstom Transport, the respondent herein, received the principal contract for telecommunication, electrification and related works.

JPC, the petitioner herein, was involved as a subcontractor for civil, electrical and related works as to 55 structures at Daudkhan, Hathras and Khurja. The subcontract was for a consideration of ?34,09,58,091 and the completion period for the same was 675 days.

Disputes arose later over the access to the site, information of the project, designs and delays. The subcontract was therefore terminated. 

The petitioner then raised several claims during arbitration. It relied upon a letter dated 7 June 2017, which was addressed by the respondent to DFCCIL. The petitioner argued that the letter included statements which supported its case and which mentioned that the access to the site and the information of the project were not provided on time. 

Objections were made as to the use of that letter by the respondent. It stated that the document originated from an entirely separate arbitral proceeding between the respondent and DFCCIL and therefore was protected via confidentiality.

The Tribunal examined how the petitioner obtained that document and concluded that it formed part of the confidential arbitral proceedings. It therefore refused to rely upon the letter. It still considered the other evidence before rejecting other claims. The petitioner then approached the High Court under Section 34 of the Arbitration and Conciliation Act 1996.

Legal Issues

1. Whether a document originating from separate arbitral proceedings could be relied upon in other arbitral proceedings.
2. Whether Section 42A of the Arbitration and Conciliation Act, protected the confidentiality of such a document.
3. Whether the Tribunal could refuse to rely upon the document after examining the circumstances in which it was obtained.
4. Whether the exclusion of the document resulted in patent illegality or a violation of public policy under Section 34 of the Arbitration Act.

Decision

The Delhi High Court dismissed the petition and refused to interfere with the arbitral award.

The Court held that Section 42A protects the confidentiality of the arbitral proceedings. Even though the provision does not mention the term “inadmissibility,” it cannot be interpreted in a manner that makes such protection meaningless.

The Court also clarified that the relevance of a document and whether it’s permissible are two different questions. A document cannot be relied upon only because it supports a party’s case. It was upon the Tribunal to examine how the document was obtained, and whether using it would undermine the confidentiality under arbitration.

It was further held that the Tribunal properly considered the circumstances around the letter. The findings were factual and did not suffer from any perversity. 

The argument that the letter automatically lost confidentiality only because it appeared in another arbitral proceeding was rejected by the Court.

At last, the Court noted that the petitioner did not independently challenge the merits-based findings of the Tribunal on the other claims. Therefore, there was no reason to interfere with the award under the limited scope of Section 34. The petition was dismissed, and there was no order as to costs.

Case Reference:- JPC Infrastructure and Constructions Pvt. Ltd. Vs. Alstom Transport India Limited…Respondent(s) O.M.P. (Comm) 124/2024 & I.A. 5694/2024 (Stay) (SJB, Before Harish Vaidyanathan Shankar, J.)