Calcutta High Court Upholds Arbitrator’s Order On Claim Amendment | No Change In Nature Of Claim And Delay Alone Not Enough To Interfere | Dismisses SAIL Plea Against H. R. Construction
Sanchayita Lahkar
The High Court of Calcutta Single Bench of Justice Shampa Dutt (Paul) dismissed a civil revision petition challenging an arbitral tribunal’s interim award allowing amendments to a statement of claim. The Court held that the amendment, though made during the argument stage, did not alter the nature of the original claim and had been lawfully permitted under Section 23(3) of the Arbitration and Conciliation Act, 1996. The Court directed that arbitral proceedings resume and refused to interfere with the challenged order, finding no legal irregularity.
The civil revision petition arose from an order dated 15th September 2024, passed by the learned Sole Arbitrator in Arbitration Case No. 2 of 2022 involving a contractual dispute. The impugned order had permitted the claimant to amend its statement of claim, subject to the payment of a cost of ₹50,000, which had already been paid and accepted. The Arbitrator also granted the opposing party liberty to file an additional written statement of defence and to cross-examine the claimant’s witness accordingly.
The petitioner challenged this interim award on three primary grounds. First, the petitioner argued that the amendment was made at an unduly late stage, specifically during the argument phase of the arbitration, which would necessitate a rehearing and cause delays in the final resolution. Second, it was contended that the amendment substantially changed the nature and character of the initial claims. Third, the petitioner alleged non-compliance with Section 23(3) of the Arbitration and Conciliation Act, 1996, which governs the permissibility of amending claims or defences during arbitral proceedings.
In support of their position, the petitioners referred to the Supreme Court judgment in Serosoft Solutions Pvt. Ltd. vs. Dexter Capital Advisors Pvt. Ltd. (2025 SCC OnLine SC 22), especially paragraph 8. This excerpt stated judicial caution in intervening during arbitration, particularly when arbitral timeframes are jeopardized by repeated procedural delays.
The opposite party, while submitting a short note, also relied on the same Serosoft Solutions case—particularly paragraphs 12 to 16—and drew attention paragraph 14. The cited portion restated the importance of judicial restraint under Articles 226/227 of the Constitution, barring exceptional circumstances or perverse findings. They further cited the precedent in SBP & Co. vs. Patel Engineering Ltd. & Anr. (2005) 8 SCC 618 to reinforce the limited scope for court intervention in arbitral matters.
Regarding the statutory framework, Section 23(3) of the Arbitration and Conciliation Act permits amendments to claims or defences during arbitral proceedings, unless such amendments are deemed inappropriate by the tribunal due to delay. The section reads:
“Unless otherwise agreed by the parties, either party may amend or supplement his claim or defence during the course of the arbitral proceedings, unless the arbitral tribunal considers it inappropriate to allow the amendment or supplement having regard to the delay in making it.”
The Court examined the nature and scope of the amendments granted by the Arbitral Tribunal. It noted that the enhancement of the original claim (Claim No. 1) only moderately increased the initial amount by adding dues accrued after the filing of the claim. This addition was deemed related to the original claim and not a substantive alteration. Similarly, amendments to Claim Nos. 9 and 10 only elaborated on existing claims rather than introducing new grounds. An additional amendment concerning the discharge of a bank guarantee was also already part of the initial statement of claim.
Finally, an amendment regarding interest on claims until the date of payment was identified as a component of Claim No. 12. The Court found all amendments to be aligned with the original claims, neither introducing new causes of action nor fundamentally altering the nature of the proceedings.
Thus, the only remaining objection was the timing of the amendment. The petitioner alleged prejudice due to its belated filing during the argument stage. However, the Court noted that arbitral proceedings, while quasi-judicial, are governed by flexible procedural standards. Unlike the stringent bar under Order 6 Rule 17 of the Civil Procedure Code, Section 23(3) allows for amendments throughout the arbitral process unless they are grossly inappropriate.
The cost of ₹50,000 imposed by the Arbitrator on the claimant was also noted as a mitigating factor. The claimant had paid the cost, and the petitioner had accepted it, indicating consent to the tribunal’s conditions for allowing the amendment. This factual detail further undercut the petitioner’s claim of prejudice.
Upon careful consideration and comparison of the statements of claim in the original petition and the nature of the amendments sought, the Court found that the amendments were related to the initial claim and did not alter its nature or character.
The amendments concerning claim numbers 9 and 10 were determined to be directly connected to the original claim, having merely provided detailed specification without affecting the fundamental nature of the claim or causing any prejudice to the opposite party.
An additional amendment that had been sought and allowed pertained to the discharge of a bank guarantee, a subject already present in the original statement of claim. Another amendment relating to the interest on claims up to the date of payment was noted as forming part of claim number 12 in the initial petition.
The Court acknowledged that while provisions of the Civil Procedure Code are applicable in arbitration proceedings, they are not always mandatory.
It observed that whereas Order 6 Rule 17 CPC imposes constraints on amendments once a trial has commenced, Section 23(3) of the Arbitration and Conciliation Act, 1996 does not impose such stringent conditions.
The permitted amendment, according to the Court, conformed with the law, did not change the character of the claim, and was necessary for proper adjudication, thereby not prejudicing the opposite party.
It was also noted that although the amendment was granted at a belated stage, the arbitral tribunal had imposed a cost on the claimant, which had been duly paid and accepted by the opposite party.
In view of the above, the Court concluded that there was no irregularity in the allowance of the amendment, and hence, no interference with the impugned order was warranted.
The Court, in its concluding order, dismissed C.O. 4004 of 2024 and directed that the arbitral tribunal resume proceedings.
It recorded that there would be no order as to costs. Additionally, all connected applications, if any, were ordered to stand disposed of.
The Court vacated any interim order that may have been in force. It further directed that, upon application, an urgent Photostat certified copy of the judgment be supplied to the parties expeditiously after due compliance.
Advocates Representing the Parties
For the Petitioners: Mr. Supriya Dubey, Mr. Rudraman Bhattacharyya, Mr. Akash Munshi
For the Respondents: Mr. Sabyasachi Chowdhury, Sr. Adv., Mr. Debraj Sahu, Mr. Shreyaan Bhattacharyya, Ms. Sweta Mukherjee
Case Title: Steel Authority of India Limited vs. H. R. Construction Private Limited
Case Number: C.O. 4004 of 2024
Bench: Justice Shampa Dutt (Paul)
[Read/Download order]
