No Fresh Arbitration Maintainable On Same Cause Without Liberty To Refile: Supreme Court
The Supreme Court on Wednesday held that a litigant cannot initiate fresh arbitration proceedings on the same cause of action after abandoning earlier proceedings, emphasising that such conduct amounts to abuse of process and is barred by principles underlying Order 23 Rule 1 of the Code of Civil Procedure.
A bench of Justices Pamidighantam Sri Narasimha and Alok Aradhe was hearing an appeal against the Punjab and Haryana High Court order dated November 8, 2024, which had allowed a fresh application under Section 11 of the Arbitration and Conciliation Act for appointment of an arbitrator.
While setting aside the high court's order, the top court observed:
“A litigant cannot be permitted to abuse the process of Court to file a fresh proceeding again on the same cause of action. The bar contained in Order 23 Rule 1 of the Code which applies to proceeding under Section 11 of the Act is founded on Public Policy.”
The dispute arose from agreements dated April 2, 2013 between the parties concerning land transactions and joint ventures, which contained an arbitration clause. Subodh Parkash, the respondent, had initially invoked arbitration in May 2015 but later refused to participate, resulting in an arbitral award dated June 30, 2020.
He then issued a fresh notice invoking arbitration on September 1, 2021 and filed another Section 11 application, claiming a fresh cause of action based on a Supreme Court judgment dated July 9, 2021.
The court rejected this contention, holding that no fresh cause of action had arisen and that the earlier proceedings had been abandoned. It ruled that principles of Order 23 Rule 1 CPC apply to Section 11 proceedings, barring fresh applications in the absence of liberty to refile.
The court set aside the high court's order, holding that the subsequent application was not maintainable and allowed the appeal.