Madras High Court granted liberty to BSNL to institute fresh arbitration against ISHA foundation

Madras High Court granted liberty to BSNL to institute fresh arbitration against ISHA foundation

The bench comprised of Justice Senthilkumar Ramamoorthy

Upon discovering that the arbitral award granted in the matter between BSNL and ISHA foundation was without the consultation of an expert committee and thus patently erroneous, the Madras High Court gave liberty to the state owner telecom provider to institute de novo arbitration against the ISHA foundation for its claim related to unpaid dues.

The respondent, ISHA foundation had applied for service connection called Global System of Mobile Communications Primary Rate Interface (GSM PRI). Such connection was provided initially with 100 Direct Inward Dialing (DID) numbers and subsequently 400 numbers were added. While so, the respondents raised dispute for the bills issued for the month of December 2018 and January 2019 stating that there were technical problems with the connectivity and that even though complaints were raised, these complaints were not attended to.

However, upon receiving these complaints, the petitioners said it found no technical problem with the BSNL connectivity to the PBX and therefore advised the respondent to contact the PBX vendor. Since the respondent did not pay the bills citing a fault in the petitioners' connection, a committee was constituted to visit the site and examine the equipment. Upon such examination, the petitioners' discovered that the respondent had extended net connectivity and enabled Voice Over Internet Protocol (VOIP) to the IP-PBX and consequently, the GSM PRI circuit became vulnerable.

Meanwhile, the respondent foundation approached the High Court for a direction to prevent the petitioners herein from demanding amounts due under the bills. The High Court appointed Mr.Justice E.Padmanabhan as the Sole Arbitrator to resolve the dispute. The arbitral proceedings were concluded by rejecting the claim made by the petitioners herein for the sum of Rs.2,50,47,462/- and, instead, directing the respondent to pay a sum of Rs.44,000/- with interest at 15% per annum from 15.04.2019 till the date of payment.

After going through the averments, the court observed that the matter would require expert opinion. The Arbitration Act under Section 26 empowers the Tribunal to call for expert evidence unless otherwise agreed by the parties. "Unless otherwise agreed by the parties" means a situation where the parties to the dispute have agreed that expert evidence would not be relied on. In the present case, such a situation did not exist. Thus, in the absence of an agreement between the parties, the arbitral tribunal did not require the consent of the parties to call for expert evidence.

Thus, the court concluded that although the Arbitral Tribunal did consider the CDRs, the tribunal had recorded that the matter required further investigation. At the same time, the arbitral tribunal concluded that the petitioner's were entitled to Rs. 22,000 without appointing such expert.

The Court observed that the award of the tribunal was patently erroneous, and therefore set aside the award and gave liberty to the petitioners to institute de novo arbitration proceedings. The petitioners were also given the benefit of limitation under the Arbitration and Conciliation Act.