In ABB India Limited v. Sunil Hariram Jaisingh, the Bombay High Court has set aside an arbitral award rendered under SEBI's Online Dispute Resolution (ODR) framework, holding that an arbitral tribunal cannot sacrifice fairness and due process in an attempt to meet what it considered to be the 60-day timeline prescribed under SEBI's ODR framework.

Background
The dispute arose from a claim for transmission of shares originally held by the claimant's deceased father. The claimant alleged that although the original share certificates remained available, duplicate share certificates had been issued and the shares had subsequently been transferred and dematerialised. After his complaints to SEBI failed to secure any relief, the claimant invoked SEBI's ODR framework and commenced arbitration. The arbitral tribunal directed ABB India Limited to restore the claimant's shareholding or, in the alternative, pay compensation equivalent to the prevailing market value of the shares. Aggrieved by the award, ABB challenged the same before the Bombay High Court under Section 34 of the Arbitration and Conciliation Act, 1996.

No Adjudication Without Completion of Pleadings
The Court found that the arbitral tribunal had effectively concluded hearings before the statement of defence was filed. Additional pleadings were subsequently taken on record, yet no further hearing was granted. The Court held that issues relating to limitation, fraud and damages could not be decided without affording the parties a proper opportunity to address the completed pleadings.

Limitation Requires Meaningful Examination
The dispute concerned a claim relating to shares that had remained unclaimed for nearly three decades. The Court found that the tribunal had failed to properly examine the claimant's prolonged inaction and the consequences flowing from it. Questions of limitation, delay and laches required a detailed factual and legal analysis, which was absent from the award.

Fraud at the Heart of the Dispute
The Court noted that the dispute involved allegations of fraudulent transfer and dematerialisation of shares, creation of third-party rights and questions regarding the role of multiple entities. In these circumstances, the tribunal's conclusion that the dispute involved only an inter se dispute between the parties was found to be unsustainable. The Court further held that the alleged fraud had in rem consequences affecting multiple parties and could not be treated as a simple bilateral dispute.

Damages Cannot Be Awarded Mechanically
The tribunal had directed payment of compensation based on the prevailing market value of the shares. The Court held that assessment of damages required consideration of contributory negligence, mitigation of loss and other settled principles governing compensation. The award failed to undertake any such exercise.

Conclusion
The Court held that the arbitral tribunal had failed to properly adjudicate the dispute and had rendered findings that were perverse, patently illegal and contrary to the principles of natural justice. The Court further held that the fraud alleged in relation to the share certificates lay at the heart of the proceedings and rendered the dispute non-arbitrable.

Referring to the manner in which the arbitration was conducted, the judgment states that the arbitral tribunal had "fallen for the adage that justice delayed is justice denied and forgotten the adage that justice hurried is justice buried." The award was consequently quashed and set aside.¹

By - Chaitanyaa Bhandarkar