Can An Arbitrator Appoint An Advocate Commissioner To Collect Evidence? Kerala High Court Says No

The Kerala High Court has ruled that an arbitral tribunal cannot appoint an Advocate Commissioner to collect evidence by invoking its power to grant interim measures under Section 17 of the Arbitration and Conciliation Act, 1996.

Justice Easwaran S observed that Section 17 cannot be used to circumvent the limits imposed by Sections 26 and 27 of the Act. "Merely because Section 17 provides power to the arbitrator to grant interim relief, he cannot bypass the prohibition under Section 26 and grant such relief in exercise of the power under Section 17. Thus, the power under Section 17 of the Act to grant interim relief is subject to the exceptions specified under Section 26. Therefore, this Court is of the view that the arbitrator does not have any power to appoint an advocate commissioner except to appoint person(s) to solicit expert opinion," the court observed.

The ruling came in a petition filed by DLF Southern Towns Pvt. Ltd. challenging an order of the Commercial Court-III, Ernakulam, which had upheld an arbitrator's decision to appoint an Advocate Commissioner during pending arbitration proceedings.

The arbitration arose from a dispute between DLF and apartment buyers, who claimed the company had failed to convey the entire undivided share of the 24.63-acre project land that they said had been promised under the Apartment Buyer's Agreement, the draft maintenance agreement, and the sale deed. They sought conveyance of their proportionate undivided share in the project land along with damages.

During the arbitration, the homebuyers sought the appointment of an Advocate Commissioner to inspect the property and submit a report on various issues. DLF opposed the application, arguing that Section 26 permits an arbitral tribunal to appoint an independent expert to report on specific issues, while Section 27 allows the tribunal, or a party with its approval, to seek the court's assistance in taking evidence.

Since neither provision authorises an arbitrator to appoint an Advocate Commissioner to collect evidence, DLF argued that the arbitrator lacked jurisdiction to do so. It also contended that the dispute could be decided on the basis of the documents already on record.

The arbitrator rejected the objection, and the commercial court upheld that decision.

Before the high court, DLF argued that the arbitrator could not invoke Section 17 to exercise a power that Sections 26 and 27 did not confer. The homebuyers, however, contended that those restrictions did not apply when the tribunal exercised its power to grant interim measures under Section 17.

The court first rejected the homebuyers' objection to the maintainability of the petition. It held that while Section 37 bars a second statutory appeal, it does not curtail the high court's supervisory jurisdiction under Article 227 of the Constitution.

On the merits, the court relied on its earlier decision in Punarnava Ayurveda Hospital Pvt. Ltd. v. Arbitrator for NH 66 and District Collector. It reiterated that while an arbitral tribunal may appoint an expert under Section 26 or seek the court's assistance under Section 27 to take evidence, it cannot appoint an Advocate Commissioner to collect evidence.

Justice Easwaran observed, "The arbitrator thus overstepped his jurisdiction in not following a binding principle laid down by this court. As such his order qualifies as one rendered without Jurisdiction."

Rejecting the homebuyers' reliance on Section 17, the court held that an arbitrator cannot use the provision on interim measures to bypass the statutory scheme governing the collection of evidence.

The court found that the Advocate Commissioner had not been appointed to obtain expert opinion. Instead, the appointment was intended to conduct what it described as a "roving inquiry" and collect evidence for adjudicating the dispute, which was impermissible under the Arbitration Act.

It also observed that the dispute could be decided by interpreting the contractual documents already on record. There was, therefore, no need to appoint an Advocate Commissioner to measure the land or gather additional material for deciding the claims.

Holding that the arbitrator had acted beyond the powers conferred under the Arbitration and Conciliation Act, the court set aside both the arbitrator's order and the Commercial Court-III's judgment.

It also dismissed the application for appointment of an Advocate Commissioner and directed the arbitrator to proceed with the arbitration in accordance with law

For Petitioner: Advocates M. Gopikrishnan Nambiar, K. John Mathai, Joson Manavalan, Kuryan Thomas, Paulose C Abraham, Raja Kannan, Dominic Antony and Izhar Mohammes

For Respondents: Senior Advocate Anil Xavier, Advocates M Rishikesh Shenoy, Susy George, George Pothan Poothicote, Kurian George Poothicote and Gayathri Jayakumar