Original Claim Can Be Amended At Argument Stage In Arbitration Proceedings, Provisions Of CPC Do Not Apply Strictly: Calcutta High Court

The Calcutta High Court bench of Justice Shampa Dutt (Paul) has held that an amendment to the original claim may be permitted during arbitral proceedings, even at the stage of final arguments, particularly when costs have been imposed on the party seeking the amendment and accepted by the opposite party—provided the amendment does not materially alter the nature of the original claim or cause prejudice. It further held that while Civil Procedure Code, 1908 (CPC) provisions may be applied in arbitration, they are not to be strictly enforced to bar such amendments under Order VI Rule 17, given the more flexible framework of the Arbitration and Conciliation Act, 1996. Brief Facts: The present civil revision has been preferred against the order dated 15th September 2024, passed by the learned Sole Arbitrator. By the impugned order, the learned Arbitrator, through an interim award, allowed the claimant's prayer for amendment of the statement of claim, subject to costs of ₹50,000/-. It is admitted that the petitioner herein (opposite party) has already accepted the said cost from the claimant. Further, the learned Arbitrator granted liberty to the petitioner/opposite party to file an additional written statement of defence and to cross-examine the claimant's witness. The petitioner/opposite party has preferred this revision being aggrieved by the above amendments allowed and submitted that the amendment was allowed at a belated stage, likely causing delay due to rehearing; that it has altered the nature and character of the original claims; and that it was permitted without proper compliance with Section 23(3) of the Arbitration Act. It was also stated that such belated filing of the amendment application has resulted in delaying the conclusion of the proceedings, thereby causing prejudice to the opposite party. Observations: The court at the outset noted that Arbitration proceedings are quasi-judicial in nature. Although the provisions of the CPC may be applied, their applicability is not mandatory in all circumstances. Under Order VI Rule 17 CPC, once the trial has commenced, amendments to pleadings are permitted only under stringent conditions. It further added that in contrast, Section 23(3) of the Arbitration Act, allows a party to amend or supplement its claim or defence during the course of the arbitral proceedings, including at the stage of arguments. The statutory scheme under the Arbitration Act is, therefore, more flexible and less rigid than the CPC in this regard. The court concluded that the amendment permitted is lawful, as it does not alter the nature or character of the claim and is essential for proper adjudication, causing no prejudice to the petitioner. Though allowed at a belated stage, the arbitral tribunal imposed costs on the claimant, which have been duly paid and accepted by the petitioner, making the amendment effective. Accordingly, the present petition was dismissed. Case Title: Steel Authority of India Limited Vs H. R. Construction Private Limited Case Number: C.O. 4004 of 2024 Judgment Date: 22/05/2025 For the Petitioner/SAIL : Mr. Supriya Dubey, Mr. Rudraman Bhattacharyya, Mr. Akash Munshi. For the Opposite Party : Mr. Sabyasachi Chowdhury, Sr. Adv. Mr. Debraj Sahu, Mr. Shreyaan Bhattacharyya, Ms. Sweta Mukherjee. Click Here To Read/Download The Order

Original Claim Can Be Amended At Argument Stage In Arbitration Proceedings, Provisions Of CPC Do Not Apply Strictly: Calcutta High Court

Mohd Malik Chauhan

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