Adducing Additional Documents At The Stage Of Evidence In Arbitration

Adducing Additional Documents At The Stage Of Evidence In Arbitration

Introduction

In arbitration proceedings, the Evidence stage assumes a paramount importance. In civil trials, Evidence Affidavit stage is governed by Order XIX, Rule 6 of the Code of Civil Procedure, 1908 (hereinafter, ‘CPC’) wherein the format and guidelines of affidavit of evidence are stipulated. Whereas, Section 19(1) of the Arbitration and Conciliation Act, 1996 (hereinafter, ‘Arbitration Act’) provides that the arbitral tribunal shall not be bound by CPC or the Indian Evidence Act, 1872 (hereinafter, ‘Evidence Act’). However, the position on this restriction has been made clear by the Hon’ble Supreme Court’s decision in SREI Infrastructure Finance Limited v. Tuff Drilling Private Limited¹ wherein the apex Court has held that Section 19(1) does not prohibit the Arbitral Tribunal from drawing sustenance from the fundamental principles underlying the CPC or the Evidence Act but the Arbitral Tribunal is not bound to observe the provisions of the Code with all of its rigour. Further, in terms of Section 19(2) of the Arbitration Act, the parties have the liberty to agree on the procedure to be followed by the Tribunal in conducting the proceedings.

Relevant Provisions in the Arbitration Act and CPC

Notably, there is no express provision on adducing additional documents after filing of a Statement of Claim or a Statement Defence/ Counter Claim in the Arbitration Act. Therefore, it becomes necessary to rely on CPC provisions on this aspect read with a broad governing provision being Section 23(2) of the Arbitration Act.

▪ Section 23(2) of the Arbitration Act

In terms of Section 23(2) of the Arbitration Act, the parties are to submit all documents that are considered relevant by them with their Statement of Claim or Defence, respectively. Further, the parties may add a reference to the documents or other evidence that they will submit.

▪ Order VII, Rule 14(3) of CPC

In terms of Order VII, Rule 14(3) of CPC, a document which is required to be produced in Court by the Plaintiff when the plaint is presented, or to be entered in the list to be added or annexed to the plaint but is not produced or entered accordingly, shall not, without the leave of the Court, be received in evidence on his behalf at the hearing of the suit.

▪ Order VIII, Rule 1A (3) of CPC

Similarly, Order VIII, Rule 1A (3) of CPC provides that a document which is required to be produced in Court by the Defendant but is not produced or entered accordingly, shall not, without the leave of the Court, be received in evidence on his behalf at the hearing of the suit.

▪ Order XVIII, Rule 4 of CPC

In terms of Order XVIII Rule 4(1), where documents are filed with an Affidavit, the proof and admissibility of such documents filed along with the Affidavit shall be subject to the orders of the Court.

Furthermore, Order XVIII Rule 4(1B) of CPC stipulates that “A party shall not lead additional evidence by the affidavit of any witness (including of a witness who has already filed an affidavit) unless sufficient cause is made out in an application for that purpose and an order, giving reasons, permitting such additional affidavit is passed by the Court.”

Therefore, as a matter of procedure an application for placing on record such additional documents is to be firstly filed before the Arbitral Tribunal and the same is to be adjudicated upon.

Judiciary on adducing additional documents at the stage of Evidence

It is popular practice that in large number of affidavits, which are filed and tendered as examination-in-chief under Order XVIII Rule 4(1), documents are attached. The Hon’ble Supreme Court as well as the High Courts have held that the documents so long as they are within the pleadings or relate to the developments subsequent to the filing of the suit or at the stage of admission/denial, ought not to be refused even if filed with the affidavit-in-evidence.²

Notably, the production of additional documents has been allowed even after filing of evidence and commencement of trial. The Delhi High Court’s decision in Zakir Hussain and Ors. v. Sunshine Agrisystem Pvt. Ltd.³ is relevant this regard, wherein parties intended to file additional documents after pleadings and evidence were completed and the matter was at the stage of cross-examination. This case was before a Single Judge Bench wherein the Court allowed the petition filed under Section 34 and set aside the award concluding that the Arbitrator denied relevant evidence from being brought on record which was in contravention of principles of natural justice which led to findings on facts which were not supported by evidence and were a complete miscarriage of justice.

The brief factual background to the case is that the Petitioner moved an application to place on record certain additional documents after filing of the evidence and when the cross-examination was pending. The Arbitrator rejected the application filed on the ground of non-payment of costs imposed for moving the said application. Pertinently, the main objection taken by the Respondent was that even though the documents were in the knowledge of the petitioner, they were filed only at the stage of Evidence Affidavit and that they no not find any mention in the pleadings.

The Court observed that the question that was pertinent to be addressed was whether the additional documents sought to be placed on record by the Petitioner at the time of their evidence amounted to new material facts or they were only material particulars in support of Petitioner’s defence⁴. Relying on the apex Court’s decision in Harkirat Singh v. Amrinder Singh⁵ the Bench noted that “material facts” are the primary or basic facts which must be pleaded by the party in support of its case namely, its cause of action or defence. On the other hand, “material particulars” are the details in support of the material facts pleaded by the party. The Bench further observed that “All material facts must be pleaded by a party in support of its case since the object and purpose is to enable the opposite party to know the case he has to meet; in the absence of a pleading, a party cannot be allowed to lead evidence. Failure to state even a single material fact would entail dismissal of the suit of the petitioner. Material Particulars on the other hand, are only the details of the cases which are in the nature of evidence a party would be leading at the time of trial⁶.”

The Bench further relied on the apex Court’s decision in Virender Nath Gautm v. Satpal Singh⁷ wherein it was observed that the material facts relied upon by the parties for the claim must be stated in the pleadings, but the facts by means of which the material facts are required to be proved and are in the nature of particulars or evidence, need not be set out in the pleadings. They are not facts in probanda, but only relevant evidence required to be proved at the time of evidence in order to establish the facts in issue⁸.

The Court noted that the documents were sought to be brought on record at the stage of cross-examination of the Petitioner being pending and the same would not have cause prejudice to the Respondent as the Respondent had ample opportunity to address these documents in rebuttal evidence⁹.

The Court held that that by refusing to permit permanent evidence, serious prejudice was caused in determination of true facts which led to not only negation of principles of natural justice but also amounts to patent illegality. By refusing the evidence to be bought on record, conclusions arrived at were without any evidence and, therefore, perverse and arbitrary. Therefore, the Bench held that on the ground of such refusal of additional documents on a procedural ground of non-payment of costs, though subsequently tendered, the Award was liable to be set aside¹⁰.

Conclusion

Section 18 of the Arbitration Act stipulated that parties shall be treated with equality and each party is entitled to a full opportunity to present its case. Arbitration matters involve voluminous records and at times, there are substantial subsequent developments during the proceedings that the party may have to rely on certain additional documents to further their case during the stage of Evidence. In such scenario, the decision in Zakir Hussain (supra) comes to rescue of parties as it paves way for the parties to rely on additional documents which is also in consonance with the underlying principle of Section 18.

Disclaimer: This article was first published in the S&A Law Offices - 'Indian Legal Impetus' newsletter in July 2024.