Say the ratio out loud before you open Reasoning — recalling it unprompted is exactly what the exam pays for.
Why it matters
It is the checklist case. Everything the paper says about natural justice in arbitration is gathered here in a single enumerated form, and an answer that reproduces the list accurately will cover the ground that Padam Chand Jain and Shri Ram Ram Niranjan cover one rule at a time.
Facts
The court was considering the standards an arbitral tribunal must observe in conducting a hearing, and summarised the principles to be followed.
Held
The minimum requirements of a proper hearing are these. Each party must have notice that the hearing is to take place and of its date, time and place. Each must have a reasonable opportunity to be present at the hearing, with his witnesses and legal advisers if allowed, and to be present throughout. Each must have a reasonable opportunity to present statements, documents, evidence and arguments in support of his own case. Each must be supplied with the statements, documents and evidence adduced by the other side. Each must have a reasonable opportunity to cross-examine the opponent's witnesses and to reply to the arguments advanced for the opponent.
Four further directions complete it. The date of hearing must not be so close that the case cannot properly be prepared. The tribunal should try to accommodate a party genuinely prevented from attending, by illness or a compelling engagement elsewhere. Each party is entitled to know any statements, documents, evidence or information collected by the tribunal itself which are adverse to his interest, if uncontested. And the tribunal is to hear neither evidence nor argument from one party in the absence of the other, unless that other, despite opportunity, chooses to remain absent; nor is it to take evidence in the absence of both, unless both stay away despite proper notice. Each party is entitled to advance notice of every hearing and of every meeting of the tribunal, as s. 24 provides.
Reasoning
Step one — the Act states a principle, not a code. Section 18 requires equal treatment and a full opportunity to present one's case; the content of that opportunity has to be worked out.
Step two — work it out from the elements of a hearing. Notice, presence, presentation, disclosure, testing, reply. The list is simply those six elements applied to a private tribunal.
Step three — the tribunal's own enquiries are caught too. Material the tribunal gathers itself is as capable of prejudicing a party as material one side supplies, and must be disclosed.
Exam use
It opens: Discuss the application of the principles of natural justice to arbitral proceedings — reproduce the six requirements in order and then illustrate each.
Illustrate with the case law. Disclosure with Padam Chand Jain; notice and the warning before proceeding ex parte with Shri Ram Ram Niranjan; the duty to consider material with K.P. Poulose.
Connect it to the ground of challenge. A breach of these requirements is what makes out the s. 34 ground that a party was unable to present his case; and non-observance of natural justice is itself the prejudice, without separate proof that the result would have differed.
It does not decide that arbitral procedure must follow the Code of Civil Procedure or the law of evidence; the tribunal is not bound by them and the parties may agree on the procedure, subject always to these minimum requirements.