PARTIES RIGHT TO CROSS- EXAMINE WITNESSES IN ARBITRATION
The Delhi High Court in the case Sukhbir Singh vs M/S Hindustan Petroleum deals with the issue that whether the parties' right to cross-examine witnesses in the arbitration is subject to Arbitration Tribunal’s discretion. The High Court also interpreted the meaning of section 24(1) provided under the Arbitration and Conciliation Act, 1996.
The Petitioner and the Respondent were parties to a dealership agreement and the agreement was for a term of 15 years. The Petitioner was running a retail outlet for petrol, diesel, motor oils, greases, and other such products. The dispute among the parties arose because certain products of the Petitioner’s retail outlet were not of the specified standard. While lab reports also stated that certain products met the specified standard. Subsequently, the Respondent terminated the agreement for the same. The Petitioner initiated arbitral proceedings claiming that the laboratory reports were fabricated and there were various discrepancies in the reports. In order to prove his claim, the Petitioner applied for the cross-examination of the Respondent’s witnesses.
The application to cross-examine the witnesses of the Respondent was denied by the arbitrator and the arbitration award was made in favor of the Respondent. The arbitrator concluded that the termination of the agreement by the Respondent was valid.
Aggrieved by the arbitration award the Petitioner approached the Delhi High Court. The Petitioner contended that the denial for cross-examination of the witnesses was a violation of the proviso to Section 24(1) of Arbitration and Conciliation Act, 1996. The proviso states that the arbitral tribunal shall hold oral hearings, at an appropriate stage of the proceedings, on a request by a party, unless the parties have agreed that no oral hearing shall be held.
The Respondent submitted that the proviso to section 24(1) permits a party to approach the arbitrator only in the absence of any prior determination as to the permissibility of oral hearings, but does not cast any obligation on the arbitrator to approve the application for oral hearings. It was further contended that the claims of the Petitioner were baseless and untenable.
VIEW OF THE SUPREME COURT
The Court interpreted the proviso in section 24(1) and stated that the proviso is in the favor of the party desiring for oral hearing and examination of witnesses. The arbitrator cannot deny such an application unless the disputants have waived their right through a prior agreement. However, the Court also observed and stated that an individual’s right to cross-examining the witnesses is not unending. The arbitration tribunal has the discretion to decide the scope and the length of oral hearings depending upon the facts and circumstances of the case. Arbitrators can also determine the time limit for oral arguments. The Court stated that the award made by the arbitrator, in the present case, was unsustainable. The Court was of the opinion that the Petitioner’s request for examination of witnesses should not have been denied. It is the duty of the arbitrator to examine every aspect of the case objectively, in order to decide the credibility, authenticity, and genuineness of either party’s case, and an oral hearing is one such way. The petition was, therefore, allowed.
Thus, based on the ratio decidendi of this case, it can be concluded that the parties to arbitration do have the right to cross-examine witnesses, but the right comes with certain restrictions.