Summary: In a recent decision, the Bombay High Court turned down a request from Jalaram Fabrics to overturn a decision that favored Nisarg Textiles. The disagreement was about payments for fabric supplies, and the court agreed with the earlier decision made by the arbitration group.
Jalaram Fabrics, a clothing seller, and Nisarg Textiles, a fabric maker, were in a money argument. Between March and July 2019, Jalaram said there were problems with the quality and cost of the fabrics from Nisarg, which led to a fight over payments. Nisarg wanted Rs. 11,92,614 with interest, while Jalaram said they had already paid Rs. 10,87,534 and only owed Rs. 1,05,071.
The main issue was about the arbitration process, which is a way to settle disputes without going to court. On July 21, 2022, the Bharat Merchants’ Chamber decided that Nisarg should get Rs. 17,81,996, including interest. Jalaram argued against this, saying the arbitration group was chosen only by Nisarg, making it unfair.
"Mr. Dey, speaking for Jalaram, said the decision was invalid because the arbitration group was chosen by only one side."
Judge Sandeep V. Marne rejected Jalaram's request, saying the arbitration was done by an independent group, not just by Nisarg. The court pointed out that Jalaram didn't choose an arbitrator even though they had the chance.
"The arbitrator was to be chosen by the Institute (Bharat Merchants’ Chamber) and not by the other side."
The court mentioned past cases, showing that arbitration by a recognized group is valid as long as both sides agreed to it at the start.
The court not only supported the decision of the arbitration group but also required Jalaram to pay an extra Rs. 50,000 for bringing up the case, highlighting that their arguments had no real basis.
"Since this Arbitration Petition is completely without merit, it is appropriate to impose costs."
This case highlights the importance of following agreed-upon arbitration rules and the difficulty of challenging such decisions without strong reasons.
