A Sole Arbitrator was appointed at Mumbai to adjudicate a dispute between the Claimant and the Respondent. He conducted the proceeding and prepared an Arbitral Award which was emailed to the Advocates for the parties. He awarded a hefty sum to the Claimant, much to the dismay of the Respondent.However, Section 31(5) of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”)...
A Sole Arbitrator was appointed at Mumbai to adjudicate a dispute between the Claimant and the Respondent. He conducted the proceeding and prepared an Arbitral Award which was emailed to the Advocates for the parties. He awarded a hefty sum to the Claimant, much to the dismay of the Respondent.
However, Section 31(5) of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) mandates that the Award “shall be delivered to each party” and no other; as was the law laid down by the Apex Court, recently reiterated by the Bombay High Court in Health Care, Medical & General Stores and others v Amulya Investment and others.
Therefore, the Arbitrator prepared two envelopes: one for the Claimant and one for the Respondent. He put a copy of the Award in each of them along with his covering letter and posted them by “registered post” commonly known as R.P.A.D. (Registered Post Acknowledgment Due) from the nearest post office on the mailing addresses of the parties. The Arbitrator's name and contact details were also written on the envelope. After posting the envelopes, he was provided two postal receipts each of which had consignment number that could be used to “track the journey of the envelopes ” from the website of India Post.
Two days later, the Claimant received the Award. The R.P.A.D. slip with the Claimant's signature, accepting delivery was also received by the Arbitrator.
However, the envelope of for Respondent, who was known to be a local strongman, met with a different fate. Three days after the Respondent's envelope was posted, the Sole Arbitrator received a frantic phone call from a postman informing him that he was greeted by some “well-wishers” at the Respondent's residence, who refused to let the postman pass through his hallowed gates with the envelope. Armed with uncharitable profanities, they made sure to “persuade” the postman to make an endorsement on the envelope stating that the Respondent did not reside there. Therefore, the postman, who by now was obviously shaken, made the following endorsement on the envelope, “Addressee not found” and ran for his life from the potential crime scene.
The Sole Arbitrator who had by now become functus officio, was put in a difficult situation. But he was determined to steer the course. He turned his attention to Section 3 of the Arbitration Act, titled “Receipt of written communication”.
Section 3 (1) (a) states that “unless otherwise agreed by the parties” any written communication is “deemed to have been received if it is delivered to the addressee personally or at his place of business, habitual residence or mailing address”. The Agreement between the parties containing the arbitration clause had the very same mailing address on which the Award was posted. No other address was ever provided by the Respondent to the Arbitrator, nor was any “agreement to the contrary” executed by the parties.
Section 3(1)(b) goes on to state that if none of the places referred to in Section 3(1)(a) can be found after making a reasonable inquiry, “a written communication is deemed to have been received if it is sent to the addressee's last known place of business, habitual residence or mailing address by registered letter or by any other means which provides a record of the attempt to deliver it.” The Award had been sent through “registered letter” (R.P.A.D.).
He therefore proceeded to address an email to the Advocate for the Respondent requesting for a confirmation on the mailing address of the Respondent and seeking his contact number or email address. The Advocate for the Respondent, who by now had also been ruffled by the Respondent, wrote back to the Sole Arbitrator informing him that his client refused to have any further association with him but confirmed that the mailing address of the Respondent had not changed. He nevertheless did provide a contact number of the Respondent, but it wasn't registered on WhatsApp.
Several weeks later, the Arbitrator's envelope addressed to the Respondent, was delivered back to him in a tattered condition (with the Award fortunately intact). Behind the tattered envelope was the endorsement of the postman “Addressee not found” which matched with the entry made against the consignment number on the website of India Post.
It looked like the law was on the side of the Sole Arbitrator. He had made a “reasonable inquiry” with the Respondent's Advocate. Therefore, the deeming provision under Section 3(1)(b) would squarely apply. This was backed by authority. The Bombay High Court in Logic Eastern India Pvt. Ltd. v. KEC International Limited (Cables SBU), had relied upon Section 3(1)(b) to conclude that an arbitral award that had returned with a remark “No such firm at this address” was “deemed to have been served”. The High Court had also relied on Section 27 of the General Clauses Act, 1897 to support this conclusion, which states that where any Union Act authorizes or requires any document to be served by post, then service “shall be deemed to be effected by properly addressing, pre-paring and posting by registered post, a letter containing the document” unless of course “the contrary is proved”. A recent decision of the Apex Court in Krishna Swaroop Agarwal (Dead) Through LRs. v. Arvind Kumar once again relied on this Section to advance the proposition for “deemed service”.
However, the Arbitrator did not want to leave things to chance. Afterall, the proceedings before him lasted for a little over a year and it would be most unfortunate if the Claimant wouldn't be able to reap the benefits of the Award. Further, a nagging thought kept crossing his mind: “Could there be a possibility of the Respondent succeeding the setting aside an Award on the ground that it was not served upon him?” After all the presumption under Section 27 could be rebutted if the contrary was proved by him.
Therefore, the Arbitrator put on his thinking cap and hoped that providence would provide an answer. An out of the box solution would be necessary to resolve the issue.
He revisited Section 3(1)(b) of the Arbitration Act and noticed that the written communication is deemed to be received if it is sent to the addressee's last known address by registered letter “or any other means which provides a record of the attempt to deliver it.” Obviously attempting to deliver the Award once again by a traditional courier service would be met with the same fate.
Therefore, he thought of another plan. He opened his phone, and downloaded “Borzo”, a same day delivery app (application), and after entering the mailing address and contact number of the Respondent, booked a “package delivery” for the Respondent. For the description of the package, instead of clicking on the “documents” opinion, he clicked on “flowers”. When the delivery partner from Borzo collected the “package”, not only did the Arbitrator hand over a bouquet of flowers to the delivery partner but also handed over a fresh envelope within which was the Arbitration Award and a covering letter with compliments from the Arbitrator. Only this time, the written on the envelope, was just the name and address of the Respondent without the contact details of the Arbitrator. Fifty-three minutes later, the Arbitrator was pleased to receive a message from Borzo informing him that the “package” had been successfully delivered to the Respondent. The Award was finally delivered. The Respondent had taken the bait. The Arbitrator was finally at ease. His purpose, served. Whether this would stand the scrutiny of the Courts would be a different story for a different day.
The Author is an Arbitrator and a practicing Advocate at the Bombay High Court. Views are personal.