Res judicata bars second arbitration for claims that could have been raised in previous arbitral proceedings.

The Petitioner entered into an agreement with the Respondents on August 11, 2016, for the supply of RSJ Poles.

In 2018, the Petitioner invoked Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) before the MSME Council.

These proceedings resulted in an Award dated April 30, 2024, in favor of the Petitioner, which is currently being challenged under Section 34 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”).

The Petitioner had previously filed a Section 11 petition (ARB.P. 1124/2022) but withdrew it in 2023 due to the pending MSME proceedings.

The Petitioner filed the present petition under Section 11(6) of the Arbitration Act, seeking the appointment of a new arbitrator for claims regarding liquidated damages, asserting these were neither raised nor adjudicated in the 2024 Award.

Records indicate the cause of action for liquidated damages arose on July 25, 2018, prior to the Petitioner’s initial and amended filings before the MSME Council.

1. Whether a second arbitration proceeding is maintainable for claims arising out of the same contract and cause of action after a previous arbitration has already culminated in an Award.

2. Whether the principles of res judicata apply to bar a second reference for claims that could have been raised in earlier arbitral proceedings.

The court primarily applied Section 11(6) of the Arbitration Act regarding the appointment of arbitrators.

It relied on the principle that there cannot be two separate arbitration proceedings for the same contract or transaction, as established by the Supreme Court in M/s Tantia Constructions Limited v. Union of India.

the court applied the doctrine of res judicata, which holds that once an award is pronounced, a party cannot seek a second reference for claims that were available to be raised during the initial proceedings.

The court observed that the cause of action regarding liquidated damages arose on July 25, 2018, when the Respondents made deductions from the Petitioner's payments.

Consequently, the Petitioner had the legal right and opportunity to include these claims when it first approached the MSME Council in October 2018, or when it filed its amended claim petition in July 2022.

Applying the precedent from M/s Tantia Constructions, the court reasoned that allowing a second arbitration for claims stemming from the same transaction would undermine the finality of the first award.

Since the Petitioner participated in the first arbitration to completion, the court found the attempt to initiate a second proceeding for omitted claims to be legally impermissible.

The court affirmed that principles of res judicata apply to arbitration, barring a second reference for claims that "could have been raised" previously.

Accordingly, the petition under Section 11(6) was dismissed for lack of merit.