The Delhi High Court has dismissed a petition filed by JPC Infrastructure and Constructions Pvt. Ltd. challenging an arbitral award in favour of Alstom Transport India Ltd., holding that confidential documents originating from a separate arbitration cannot be relied upon in collateral arbitral proceedings merely because they may support a party’s case. The Court observed:
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“If the interpretation canvassed by the Petitioner were to be accepted, a party would be free to procure documents originating from a separate arbitration and deploy them in collateral proceedings on the ground that Section 42A of the A&C Act merely creates an obligation but carries no practical consequence. Such a construction would substantially erode the protection intended by Parliament and reduce the statutory mandate to a mere formality devoid of effective content.”
JusticeHarish Vaidyanathan Shankar upheld the arbitral tribunal’s refusal to consider a letter dated June 7, 2017, exchanged between Alstom and the Dedicated Freight Corridor Corporation of India Ltd. (DFCCIL). JPC had argued that the communication contained admissions demonstrating that delays in the project were attributable to Alstom’s failure to provide encumbrance-free access to the project site. The tribunal, however, had declined to admit the document on the ground that it formed part of confidential arbitral proceedings between Alstom and DFCCIL.
Before the High Court, JPC contended that Section 42A of the Arbitration and Conciliation Act merely imposes an obligation of confidentiality and does not render such documents inadmissible. It also argued that the letter had entered the public domain and therefore lost its confidential character.
Rejecting these submissions, the Court held that the statutory protection under Section 42A cannot be interpreted in a manner that renders arbitral confidentiality ineffective. It observed that while the provision does not expressly use the term “inadmissibility”, parties cannot be permitted to procure documents from separate confidential arbitrations and deploy them in collateral proceedings, as such an interpretation would substantially dilute the legislative intent behind Section 42A.
The Court further held that the arbitral tribunal was well within its powers to regulate the evidentiary record and examine the provenance of the disputed document before deciding whether it could be relied upon. It found that the tribunal’s decision to exclude the communication was an exercise of evidentiary discretion and did not suffer from jurisdictional error, patent illegality or perversity warranting interference under Section 34 of the Arbitration and Conciliation Act.
The Court also rejected JPC’s argument that the arbitration having been conducted under the ICC Rules diluted the confidentiality obligation. It held that since the seat of arbitration was in India, the proceedings remained subject to the mandatory provisions of the Arbitration and Conciliation Act, and institutional rules could not override Parliament’s statutory mandate under Section 42A.
Noting that JPC had confined its challenge only to four rejected claims and had not independently assailed the tribunal’s findings on their merits, the Court held that once the tribunal’s approach towards the disputed letter was found to be legally sound, the very foundation of the challenge collapsed. Finding no conflict with public policy or patent illegality, the Court dismissed the petition and allowed the arbitral award to stand undisturbed.
