Court’s Assistance in Taking Evidence in Arbitral Proceedings

Section 27 of the Arbitration and Conciliation Act, 1996, is a pivotal provision that empowers arbitral tribunals or parties to seek judicial assistance in obtaining evidence. While arbitration emphasizes autonomy and efficiency, Section 27 highlights the judiciary's indispensable role in specific circumstances, ensuring procedural fairness and effective resolution of disputes. 

What the Provision Contains 

Section 27 outlines the process for securing evidence with the court's help when the arbitral tribunal or a party (with tribunal approval) during the arbitral process. Below are its significant aspects: 

1. Application Process: 

   1. The arbitral tribunal or a party, after receiving the tribunal's approval, may apply to the court for assistance in obtaining evidence. 

   2. The application must include particulars such as the names and addresses of the parties and arbitrator/s, details about the evidence to be procured, and specific documents or witnesses required to be summoned. 

2. Court's Assistance: 

   1. The court may issue summonses, commissions, or other processes as it deems necessary to aid the arbitral tribunal in collecting evidence. 

   2. Such assistance can cover summoning witnesses, procuring documents, or facilitating inspections. 

3. Non-Compliance and Consequences: 

   1. Non-compliance with the court's directives, such as failing to attend or provide evidence, may result in penalties equivalent to those in a regular court case. 

   2. The court's powers in enforcing its processes remain consistent with its authority in litigation. 

Prior Tribunal Approval: A Prerequisite to Court Assistance 

Section 27(1) of the Arbitration and Conciliation Act, 1996, explicitly mandates that a party seeking court assistance to procure evidence can only do so after obtaining prior approval from the arbitral tribunal. This requirement ensures that the arbitral process retains control over the evidentiary mechanism, safeguarding its autonomy while allowing judicial intervention when absolutely necessary. 

The role of the tribunal in granting approval is not merely procedural but involves a substantive application of mind. The tribunal acts as a gatekeeper, evaluating the relevance and materiality of the evidence sought by the party before granting its endorsement. 

Mechanical Approval: A Pitfall to Avoid 

Judicial pronouncements have consistently held that the tribunal cannot mechanically approve or disallow applications under Section 27. The process must involve a careful assessment of the reasons provided by the applicant, ensuring that the evidence requested is pertinent to the dispute. 

For instance, in Hindustan Petroleum Corporation Ltd v. Ashok Kumar Garg (2006), the Delhi High Court stressed that while detailed reasoning is not mandatory, the tribunal’s approval must reflect conscious application of mind. Merely affixing a “stamp of approval” to applications without assessing their necessity undermines the legislative intent behind Section 27. 

Similarly, in Steel Authority of India Ltd v. Uniper Global Commodities (2023), the court observed that the tribunal must not abdicate its duty by bypassing the evaluation of the relevance or materiality of evidence. The tribunal’s order should demonstrate a prima facie finding that the evidence sought is significant to the arbitration proceedings. 

Application of Mind: A Key Requirement 

The process of approval under Section 27 must involve the tribunal's application of mind, even if not a thorough examination. This entails the following: 

1. Assessing Relevance and Materiality: 

   1. The tribunal must evaluate whether the witnesses, documents, or property inspections requested are crucial to resolving the dispute. 

   2. Evidence that lacks relevance or materiality should not be approved. 

2. Preventing Frivolous Applications: 

   1. The tribunal must exercise caution to prevent misuse of Section 27, ensuring that the application is genuine and not a tactic to delay proceedings or harass the opposing party. 

3. Maintaining Procedural Fairness: 

   1. The tribunal’s scrutiny ensures that the application does not unfairly favor one party or compromise the efficiency of the arbitral process. 

      
      

In BPT Infra Project Pvt. Ltd v. Indraprastha Ice and Cold Storage Pvt. Ltd (2024), the Delhi High Court underscored that the tribunal’s order implicitly accepted the petitioner’s reasons for summoning specific witnesses, demonstrating an implied application of mind. This approach reflects the tribunal’s duty to assess the merits of the application without pre-determining the relevance of evidence in exhaustive detail. 

Judicial Oversight of Tribunal Approval 

While courts have emphasized the importance of tribunal discretion under Section 27, they have also clarified the limits of judicial intervention. Courts do not act as appellate authorities over tribunal decisions but review applications to ensure compliance with procedural fairness. 

The principle established in Hindustan Petroleum Corporation Ltd and reinforced in SAIL is that the tribunal must exercise its discretion judiciously, reflecting a conscious decision-making process. This strikes a balance between arbitral autonomy and judicial assistance, promoting the integrity of arbitration as a reliable dispute resolution mechanism. 

Judicial Pronouncements 

Several judicial pronouncements have clarified the scope and application of Section 27, emphasizing the balance between arbitral autonomy and judicial support: 

1. Hindustan Petroleum Corporation Ltd v. Ashok Kumar Garg (2006): 

   1. The Delhi High Court held that while detailed reasoning is not mandatory, the arbitral tribunal must demonstrate application of mind when granting approval for summoning witnesses under Section 27. The tribunal must scrutinize the relevance of the evidence sought. 

2. Steel Authority of India Ltd v. Uniper Global Commodities (2023): 

   1. The Delhi High Court emphasized that the arbitral tribunal cannot abdicate its responsibility under Section 27 by mechanically approving applications. The tribunal must assess the relevance and materiality of the evidence sought before granting approval. 

3. BPT Infra Project Pvt. Ltd v. Indraprastha Ice and Cold Storage Pvt. Ltd (2024): 

   1. In this case, the Delhi High Court reiterated that the tribunal's approval under Section 27 must reflect a conscious view of the relevance of the evidence. The court upheld the tribunal's decision to summon witnesses based on clear and cogent reasons provided in the application. 

Court-Exclusive Powers Under the Act 

Section 27 is part of a limited subset of provisions under the Arbitration and Conciliation Act, 1996, that exclusively empower the court to act. Other provisions include: 

• Section 9 (Interim Measures): Permits parties to approach the court for interim relief, such as injunctions or preservation of assets. 

• Section 34 (Setting Aside Arbitral Awards): Courts can annul arbitral awards on specific grounds. 

• Section 36 (Enforcement of Awards): Authorizes courts to enforce arbitral awards as a decree. 

Conclusion 

Section 27 exemplifies the judiciary's supportive role in arbitration, ensuring that parties can present their cases comprehensively. Judicial pronouncements have reinforced the importance of careful application of mind by arbitral tribunals when invoking this provision. By facilitating evidence gathering, Section 27 strengthens arbitration's reliability, balancing autonomy with judicial oversight.