New Delhi, Aug 20: The Delhi High Court has dismissed businessman Lalit Modi’s challenge to a 2016 arbitral award concerning the sale of his Vasant Vihar property to BDR Builders and Developers Pvt Ltd.Justice Harish Vaidyanathan Shankar, in a judgment pronounced on August 18, held that Modi had failed to establish that the arbitrator was legally ineligible or that there were sufficient circumstances raising justified doubts about his independence or impartiality.
The dispute relates to an approximately 858-square-yard property at 32, Pashchimi Marg in Vasant Vihar.According to the court record, BDR Builders had provided financial assistance to Modi between 2009 and 2012. The parties subsequently entered into an agreement in June 2014 for the sale of the property.After differences arose, the matter was referred to arbitration.
The parties jointly appointed advocate Naresh Gupta as the sole arbitrator in October 2016.During the proceedings, the parties informed the arbitrator that they had reached an amicable settlement. An award passed on November 21, 2016 directed specific performance of the sale agreement and transfer of possession of the property to BDR Builders.
The court noted that Modi and BDR director Rajesh Gupta had separately signed an acceptance recording their agreement to the award and their decision not to challenge it.Modi subsequently approached the High Court under Section 34 of the Arbitration and Conciliation Act, alleging that the arbitrator had previous professional connections with BDR Builders and its directors and had not made the disclosures required under the law.
The High Court, however, said that non-disclosure by itself does not automatically invalidate an arbitral proceeding. It held that the party challenging an award must establish either statutory ineligibility of the arbitrator or circumstances giving rise to justifiable doubts regarding the arbitrator’s independence or impartiality.
The court examined documents showing professional engagements between the arbitrator and BDR Builders during 2008-2012. It noted that the relevant provisions concerning previous professional relationships focus on the period preceding the arbitration, which commenced in 2016.
Modi also relied on a typed copy of an alleged 2018 communication attributed to the arbitrator. The court declined to rely on the document, noting that the original had not been produced and its authorship and authenticity had not been established.
The judge observed that proceedings challenging an arbitration award cannot be decided on unproved or doubtful material, particularly when allegations concern an arbitrator’s integrity.In a postscript, Justice Shankar disclosed that he had initially been inclined to allow Modi’s petition during the hearing but changed his view after a closer examination of the evidence and applicable law.
The court accordingly dismissed Modi’s challenge and allowed BDR Builders’ execution proceedings for enforcement of the 2016 award to continue. The execution matter is scheduled to be listed before the roster bench on October 28.
