Refusal of a correctly addressed arbitration notice constitutes deemed service unless rebutted.

The dispute arose from a Cinema Direction Agreement dated 14 January 2022.

After the respondent invoked arbitration, the Karnataka High Court appointed a sole arbitrator.

The proceedings were terminated when the respondent did not file its claim, but the arbitrator later recalled that termination order on the respondent’s application.

The arbitrator and the Commercial Court found that notice of the recall application had been served on the appellant and that the notice and statement of claim in the resumed arbitration had been returned with the postal endorsement “refused.”

The appellant did not participate, and the arbitrator made an ex-parte award for ₹80,80,000, interest, and costs.

The Commercial Court dismissed the appellant’s Section 34 challenge; the appellant appealed under Section 37 of the Arbitration and Conciliation Act, 1996.

1. Whether the appellant was denied proper notice and a reasonable opportunity to participate in the resumed arbitration, warranting setting aside of the award under Section 34(2)(a)(iii).

2. Whether the Commercial Court’s refusal to set aside the award should be reversed in an appeal under Section 37.

Section 34(2)(a)(iii) of the Arbitration and Conciliation Act permits setting aside an award where a party was not given proper notice of the arbitral proceedings or was otherwise unable to present its case.

Under Section 27 of the General Clauses Act, service may be presumed where registered post is sent to the correct address and returned with an endorsement of “refused”; the presumption is rebuttable.

The court described the scope of Section 37 review as confined to determining whether the Section 34 court acted within its jurisdiction; it does not permit appellate reappreciation of the merits, and is narrower than Section 34 review.

Section 34(4) was not available because the appellant had not sought that course before the Commercial Court.

The court distinguished Wapcos Limited v. Virgo Aqua, 2026 SCC OnLine Del 5066, on its facts, and considered Gayatri Balasamy v. ISG Nova Soft Technologies Limited, (2025) 7 SCC 1, but held that neither assisted the appellant.

The Commercial Court found that the appellant had received the recall application, relying in part on the postal acknowledgment bearing a signature similar to the appellant’s signature on the Section 34 petition.

The appellant produced no acceptable evidence to rebut that finding or the presumption arising from the “refused” endorsement on the notice and claim documents.

Given the appellant’s knowledge of the recall application, the court considered that he should have made inquiries about the subsequent proceedings; it also found no explanation for his failure to participate.

The Court of Appeal found no different circumstances warranting departure from the Commercial Court’s findings and held that Section 37 did not permit it to revisit those factual conclusions as if hearing an ordinary appeal.

The factual and procedural circumstances in Wapcos were materially different, and Section 34(4) could not be invoked for the first time in the appeal.

It held that no ground existed for appellate interference under Section 37 and dismissed the appeal, with no order as to costs.