Authority: High Court of Judicature at Madras

Order Date: 08-07-2026

Case Overview

  • Parties: Appellants – Nirmal Datacomm Pvt Ltd (represented by Managing Director Mr. Kedar Ghanshyam Shah, Directors Mrs. Saroj Kedar Shah, Mrs. Saroj Purshottam Makwana, and the late Mr. Ghanshyam Maneklal Shah) and the individual shareholders listed; Respondents – M/s Redington (India) Ltd (represented by Mr. M. Sundararajan, Senior Legal Executive) and Mr. K. Balasubramanian, Sole Arbitrator.
  • Case Numbers: OSA No. 16 of 2020, CMP No. 3944 of 2026, CMP No. 876 of 2020.
  • Nature of Dispute: The respondents (Nirmal Datacomm) sought to set aside the order dated 20‑08‑2019 (O.P. No. 291 of 2018) passed by a learned Single Judge, which had dismissed their Section 34 application against an arbitral award.
  • Background: Redington (India) Ltd, a public limited company dealing in distribution of IT hardware, software and telecom products, supplied goods to the appellants on a revolving‑credit basis from 17‑05‑2011 to 13‑03‑2012. A letter dated 19‑01‑2015 confirmed an outstanding amount of Rs 6,52,42,759 as on 30‑09‑2014; after part‑payments, the balance due was Rs 6,44,69,007.
  • Arbitral Proceeding: The sole arbitrator, appointed under Clause 19 of the invoice‑based arbitration agreement, issued an award of Rs 6,44,69,007 with interest at 18% on 23‑01‑2017. The appellants did not appear despite notice and the award was rendered ex parte.
  • Section 34 Application: The appellants alleged procedural violations – no time fixed for claim statement, non‑communication of documents under Section 24(3), award lacking reasons, failure to consider the three‑year limitation clause, and non‑credit of a Rs 2 crore payment.
  • Single Judge’s Order (20‑08‑2019): Dismissed the Section 34 petition, holding the award valid.
  • Appeal Arguments: Counsel for the appellants argued the Single Judge failed to consider the arbitrator’s alleged misconduct, unilateral appointment, and waiver of rights, citing Supreme Court precedents (e.g., Pramod Shroff v. Mohan Singh Chopra, TRF Ltd. v. Energo Engineering Projects Ltd., Bhadra International (India) Pvt. Ltd. v. Airports Authority of India).
  • Respondent’s Counter‑Arguments: Counsel for Redington contended the arbitrator’s appointment complied with Clause 19, the parties never objected to his independence, and any objection must have been raised promptly under Sections 4, 13(2), 14 and 16 of the Arbitration and Conciliation Act, 1996. The respondents highlighted the doctrine of waiver and acquiescence, noting their participation and multiple adjournments over a ten‑year period.
  • Court’s Legal Analysis:
  • Recognised Supreme Court rulings that unilateral appointment may be invalid only if challenged promptly.
  • Emphasised Section 4’s waiver provision: a party aware of non‑compliance who proceeds without timely objection waives the right to object.
  • Noted that the arbitrator was appointed before the 2015 amendment to the Act became effective (23‑10‑2015) and therefore the appointment was lawful at the time.
  • Observed that the appellants had full knowledge of the arbitration, sought adjournments, and never raised any objection to the arbitrator’s constitution, thereby acquiescing to the process.
  • Concluded that the award was rendered after due consideration of the evidence, including the appellants’ own acknowledgment of liability (letter dated 09‑01‑2015 admitting Rs 6,71,94,756).
  • Stated that interference under Section 34 is limited to patent illegality, violation of public policy, fraud, bias, or breach of natural justice – none of which were established.

Final Outcome

  • The High Court dismissed OSA No. 16 of 2020.
  • No costs were awarded to either side.
  • All connected miscellaneous petitions were closed.

Topics: Arbitration Award, Waiver of Objection, Judicial Review