A division bench of the Delhi High Court presided by Justice Pratibha M. Singh and Justice Amit Sharma recently held that, “The Arbitral tribunal is no different from a civil court in respect of dealing with contempt against itself. Thus, any misconduct before an arbitral tribunal or a sole arbitrator would be liable to be dealt with in accordance with law, if the same constitutes civil law contempt.” The hearing has been done through hybrid mode.

The present contempt petition arose out of a common order dated 5th October 2021, passed by the ld. Sole Arbitrator Hon’ble Mr. Justice Swatantar Kumar (Retd.), Supreme Court of India wherein the ld. Arbitrator took severe objection to the conduct of the Respondents during arbitral proceedings which were pending before him. The ld. Arbitrator made a reference to the High Court under Section 27(5) of the Arbitration and Conciliation Act, 1996 for issuance of appropriate orders and directions, in accordance with law, for initiating proceedings for perjury and for the offence of criminal contempt under the provisions of the Contempt of Court Act, 1971, against Respondent No.1 - Mr. Getamber Anand, as also Respondent No.3 - Ms. Saloni Adarsh. The ld. Arbitrator also directed initiation of proceedings against Mr. Vaibhav Luthra, Advocate, before the Bar Council of Delhi.

FACTUAL MATRIX:  The arbitrator passed the said reference order during the arbitration proceedings pending between the Petitioners Dalmia Family Office Trust & Anr. (Petitioners) and  Getamber   Anand & Ors. (promoter/director of ATS Group) (Respondents). The allegation of the Petitioners is that between 2013-2015, they entered into  nine independent sets of transactions with different companies of the Respondents. Further the allegation made by the Petitioners was that the Respondents failed to repay the investments in terms of the respective agreements between the parties. In addition, the Respondents filed eleven petitions under section 11 of the Arbitration  And Conciliation Act (A&C Act), seeking constitution of an Arbitral Tribunal for adjudicating the disputes between them. However, during the Arbitral proceedings the Respondents filed applications and sought recusal of the Arbitrator from the arbitration proceedings. The arbitrator dismissed all applications and invoked Section 27(5) of A&C Act for initiating criminal contempt against the Respondents.

The  Ld. Arbitrator’s Order read as under :

1. All the Applications filed by the Claimants dated 06.04.2021, 18.06.2021 and 25.06.2021 in Arbitration Case Nos. 1/2021, 2/2021, 3/2021 and 10/2021 & 11/2021 are hereby dismissed with costs.
2. For the malicious acts and deeds of the Claimants No. 1 & 2 and their accomplice Ms. Saloni Adarsh, they having brought disrepute to the institution of arbitration, severally and jointly having interfered with the administration of justice, having alleged statements/ averments, which to their personalknowledge were incorrect, as true, and having tampered with fabricated documents and produced them as evidence  before the Tribunal, in conspiracy and collusion with each other, have committed offences punishable under Section 195 to 197 of the Indian Penal Code, 1861 read with Section 340 of the Code of Criminal Procedure, 1973. These parties are also liable to be proceeded against under the provisions of the Contempt  of Court Act, 1971 for committing criminal  contempt,  of  and  in the proceedings before the Arbitral Tribunal.
3. . Claimants No. 1 & 2 along with their accomplice Ms. Saloni Adarsh, be ordered and directed to be prosecuted for committing the offence of perjury and other relevant offences under the Indian Penal Code, 1861 read with Code of Criminal Procedure, 1973 in accordance with law.
4.     Proceedings under the provisions of the Contempt of Court Act, 1971 be initiated against Claimants No. 1 & 2 and their accomplice Ms. Saloni Adarsh, and they be punished for the offence of criminal contempt in the proceedings before the Arbitral Tribunal, in accordance with law, by the Hon'ble High Court.
5.     Direct the Bar Council of Delhi to scrutinize and examine the professional conduct of Mr. Vaibhav Luthra, Advocate and take appropriate action in accordance with law, if found guilty of professional misconduct.

After due consideration of facts and notings  of the Arbitral Tribunal the High Court  observed  that ,  “In the present system of adjudication of disputes that is currently prevalent, there can be no doubt that the Tribunals and ld. Arbitrators are adjudicating disputes in place of Civil Courts. Making baseless and untenable allegations against the ld. Arbitrators cannot be permitted. Arbitrators, who are currently being appointed are either retired judges or even practicing lawyers. That by itself cannot lead to allegations of conflict by mere speculation, resulting in recusal,  without  actual  conflict  being  there. Ld. Arbitrators are put in tenuous positions when such applications are moved and any reckless or baseless allegations thus require to be dealt with strictly. While the integrity of the arbitration ecosystem needs to be maintained, the same cannot also be made fragile by giving room to unsubstantiated or speculative allegations would constitute interference in the arbitral process.”

In addition, the court also held that “even today, the Contemnor/Respondent no.1 tenders an unconditional and unqualified apology before the ld. Arbitral tribunal for his misconduct which in result led  in the  delay of the proceedings, which clearly appears to be the purpose of the Respondent no.1 and the ATS Group.”

However, while concluding the said matter, the Court accepted the apology of the Respondents and also directed them to pay a sum of Rs.10 lakhs via demand draft to any charitable organisation. In addition, for the costs incurred by the Petitioners in the proceedings, the Respondents were directed to pay a total of Rs.3 lakhs to the petitioners within one week. Further theHigh Court cautioned the Respondents for not repeating such conduct in future and thus, disposed the contempt reference.

Case Title: Dalmia Family Office Trust & Anr. v. Getamber Anand & Ors. (Neutral Citation: 2024: DHC:7895-DB)

Advocates for petitioners: Advocate Siddhant Kumar, Ajay Bhargava, Wamiki Trehan, Radhika Khanna and Varun Chopra.

Advocates for Respondents: Senior Advocate Sandeep Sethi, Krish Karla,

Kashish Bansal and Riya Kumar