A brief introduction of my case I have joined FIITJEE in June 2014 after qualifying five stages of selection process. On joining service, I was made to sign a bond. I had to leave the FIITJEE in Apr 2015 due to some medical conditions, which I clearly communicated to them with all relevant medical certificates. I have not joined any organisation till date and undergoing medical treatment. Recently FIITJEE has demanded huge sum of money (Rs 3,53,000) as damages to be paid to them. I told them my inability to pay them these charges as it was not intentional on my part to break the agreement and moreover I am unemployed to this date. For details visit following link https://www.kaanoon.com/80278/bond-money-to-be-paid-due-to-resignation-from-company FIITJEE (employer) has decided to move the case to arbitrator appointed by them only. I have received notice from arbitrator on 29th Sep 16 stating that he has called upon both the parties (myself and FIITJEE) on 26th Oct 16 and directed to pay fees of Rs 28000 each. I have talked to my lawyers in this regard. He said since arbitrator is appointed by FIITJEE, hence he will be more inclined to give judgement in their favour. Also I don’t have finances to pay this hefty amount of Rs 28,000 as fees. Also I want to pursue my case in the court because I have firm faith in the independence of judiciary and know that my case is very strong. So what’s the way forward? Q1. Can I directly challenge FIITJEE in court of law bypassing Arbitrator? Q2. A rough idea of expenses I had to incur If I approach Court. Total tune of money being asked from me by FIITJEE is around 4 lakhs. If legal recourse would cost more than this then I will prefer to pay FIITJEE what it is demanding.Please advise.
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1) if your contract with the organisation contained amarbitration clause it would be binding upon parties
2) arbitrator can be appointed by the organisation in case your contract contained such a clause
3) it is necessary to peruse the arbitration clause in contract
4) civil court woukd refer dispute to arbitration in view of the arbitration clause I n the contract
5) don't move the civil court but contest claim before arbitrator
It is not clear whether there is any arbitration clause in your employment/job contract. If that is so then there is no illegality in choosing an arbitration proceeding.
However the choice of arbitrator depends on mutual agreement of the aprties and if there was no mentioning of name of any arbitrator you can very well challenge his candidature by writing letter to him and later file an application u/s 11 of the Arbitration Act in high court to appoint someone whom the court finds fit and competent.
Do so as this man is going to pass award against you for sure.
If in the agreement there is a clause for appointment of an arbitrator for any disputes, then you cannot approach civil court if an arbitrator has been appointed.
However there is a Kerala high court verdict on this which has a different thing to tell, which is given below:
Going by Section 8 of the Arbitration and Conciliation Act, I am of the opinion that mere inclusion of an arbitration clause in the agreement does not bar or cause to oust the jurisdiction of the civil court provided Under Section 9 of the Code of Civil Procedure. The above view is further supported by Section 5 of the Arbitration and Conciliation Act, which says that "in the matters governed by first part of the Arbitration and Conciliation Act, no judicial authority shall intervene except where so provided in the first part". It means that jurisdiction of the Civil Court is not completely ousted by Section 8 of the Arbitration and Conciliation Act. Section 5 of the Arbitration and Conciliation Act does not bar the exercise of general power of the civil court to grant interim relief including specific injunctive relief Under Order XXXIX of the Code of Civil Procedure and the Specific Relief Act....”
The Supreme Court disagreed with the views of High Court and held as following
“Once an application in due compliance of Section 8 of the Arbitration Act is filed, the approach of the civil court should be not to see whether the court has jurisdiction. It should be to see whether its jurisdiction has been ousted. There is a lot of difference between the two approaches. Once it is brought to the notice of the court that its jurisdiction has been taken away in terms of the procedure prescribed under a special statue, the civil court should first see whether there is ouster of jurisdiction in terms or compliance of the procedure under the special statute. The general law should yield to the special law-generalia specialibus non derogant. In such a situation, the approach shall not be to see whether there is still jurisdiction in the civil court under the general law. Such approaches would only delay the resolution of disputes and complicate the redressal of grievance and of course unnecessarily increase the pendency in the court”
The latest judgement of the Supreme Court would apply to only those suits/proceedings wherein both the parties are bound by Arbitration agreement, however where the one of reliefs/parties is outside the scope of arbitration clause, Civil Court shall have the jurisdiction to entertain the suit, notwithstanding the Arbitration clause with some of the parties, in view of earlier judgement of Supreme Court in the matter of Sukanya Holding Private Limited Vs. Jayesh H Pandya, AIR 2003 SC 2252, wherein it was held as follows
"If a suit is filed against parties, some of which are bound by the Arbitration agreement, while others are not, in such circumstances a common suit will lie against the parties. Two different remedies in respect of same cause of action are not maintainable"
1. Is there an arbitration clause in the contract that you executed with employer? If the answer is in affirmative then you cannot go to the civil court as arbitration clause excludes the jurisdiction of the civil court. The award of the arbitrator can be challenged in the civil court which is impartial unlike the arbitrators.
2. If, however, there is no arbitration clause then you can move the civil court.
The only expense will be the fee of your lawyer but as the fee structure of lawyers is not uniform I cannot possibly comment on this.
Service Rules of the Agreement which I signed has following clause regarding Arbitration states as follows "All disputes and differences of any nature with regard to the FIITJEE service manual and the interpretations and adjudication of clauses and claims respectively shall be referred to Sole Arbitrator appointed by the Company i.e. FIITJEE Ltd. The employee hereby agrees to the appointment of the Sole Arbitrator by the company i.e. FIITJEE Ltd whenever the dispute arises .The employee undertakes not to oppose the said appointment of the Sole Arbitrator. The arbitration proceedings shall be conducted in accordance with the provisions of the Arbitration and Conciliation Act 1995 and statutory modifications thereof and rules made thereunder. The award of arbitrator shall be final and binding on both the parties. The award of the arbitrator shall be final and binding on every matter arising hereunder. It is further agreed that in spite of the fact that the Sole arbitrator may be known to any of the Directors or share holders or may have been appointed as an arbitrator earlier by the company shall not disqualify him. Even if the Arbitrator may have expressed opinion in similar matter earlier shall not render him disqualified. The venue of the arbitration shall be Delhi / New Delhi only. Subject to clause above herein, the exclusive jurisdiction in the matter shall vest in Delhi/ New Delhi Courts " This makes clear that I have no option but to approach Arbitrator first and then if unsatisfied with his verdict I can approach Courts. Q.1. Arbitrator is charging very hefty fees which is very difficult for me to pay , what should I do ? Q2. Since lawyers in this panel also shares the view that Arbitrator may not completely impartial and unbiased, even If I somehow pay hefty fee, I am not sure of impartial judgement . If I move to courts against the judgement of Arbitrator and wins the case will I get back the huge money given to the Arbitrator as fees . If not is it not travesty of justice ?
1) you can move court for appointment of the sole arbitrator preferably a retired judge of HC as the arbitrator appointed by company has acted as arbitrator in number of cases on behalf of company
2) you have to pay your share of fees
3) you can move court to set aside award if you are not satisfied with the award
4) if you win the case you can claim costs incurred by you
1. Since you have agreed to the arbitration clause, you hve to bear the cost for the arbitration proceedings as per law.
The arbitrator cannot chatrge you a hefty money for conducting arbitration.
His fees would have been fixed, hence he cannot demand any extra amount from you.
You cn refuse to pay that.
2. If you win the appeal agaisnt the arbitrator's decision, then you may claim the cost involved for the litigation which was incurred by you from the opposite party.
The arbitrator is not liable to return the fees he was paid for conducting the arbitration proceedings.
1. So the employer has acted in terms of the arbitration clause, you have no option but to submit yourself to his jurisdiction as the doors of court are closed for you unless there is an arbitration award.
2. The fee of the arbitrator has to be paid.
3. Even if you were to subsequently go to court and successfully challenge the arbitration award you will not get back the fee paid to the arbitrator.