Say the ratio out loud before you open Reasoning — recalling it unprompted is exactly what the exam pays for.
Why it matters
Ex parte arbitration is permitted, but only on terms. This case fixes the terms, and it is the authority to cite when an award is attacked for haste.
Facts
Under the arbitration agreement both parties were to nominate their arbitrators. One party delayed in nominating. The other party's nominee-arbitrator began conducting the proceedings ex parte in haste, without waiting: he proceeded ex parte on the same date, recorded the statement of a witness and heard arguments.
Held
The procedure adopted was in violation of the principles of natural justice, and the award rendered was set aside.
Reasoning
Step one — absence at one sitting is not default. An arbitrator ought not to proceed ex parte against a party merely because he has not appeared at one of the sittings.
Step two — a warning notice is required. The arbitrator should give a further notice fixing the date, time and venue, and should intimate that he will proceed ex parte if the party fails to attend. The notice must express that intention clearly, otherwise the award may be set aside.
Step three — only then may he proceed. If the defaulting party still does not attend, the arbitrator may proceed in his absence.
Step four — haste is itself the vice. Proceeding ex parte, recording evidence and hearing argument all on the same day gave the absent party no opportunity at all, which is a denial of the equal treatment the Act requires.
Exam use
It opens: When may an arbitral tribunal proceed ex parte? — and the answer is the three-step sequence above, which is also good drafting practice for a procedural order.
Support it with Rudramani Devaru on the minimum requirements of a proper hearing, including advance notice of every hearing and a date that leaves time to prepare, and with Padam Chand Jain on one-sided material.
In practice the rule generates a simple file note: never proceed ex parte without a written warning notice on the record, and never refuse a short adjournment sought for a genuine reason.
It does not decide that an award is bad merely because one party stayed away; the Act expressly allows the tribunal to continue and make the award on the evidence before it where a party defaults without sufficient cause.