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CS Professional · Arbitration, Mediation and Conciliation · Arbitral Proceedings, Pleadings and Evidence

In an arbitration between Mehta Steels Ltd (claimant) and Rao Logistics LLP (respondent), the respondent does not file its statement of defence within the time fixed and shows no sufficient cause. The parties have not agreed otherwise. How should the tribunal proceed?

The tribunal continues the proceedings. Under Section 25(b), the respondent's failure to file a defence without sufficient cause is not in itself an admission of the claimant's allegations, but the tribunal may treat the respondent's right to file the defence as forfeited. Termination is the consequence only of claimant default.

  1. ATerminate the proceedings, as the respondent defaulted
  2. BTreat the failure as an admission of the claimant's allegations and pass an award at once
  3. CContinue the proceedings without treating the failure itself as an admission, and it has discretion to treat the respondent's right to file the defence as forfeitedCorrect
  4. DRefer the matter to the Court to decide whether the proceedings may continue

Explanation

Section 25(b) says that where the respondent fails without sufficient cause to communicate his statement of defence, the tribunal continues the proceedings. It does not treat the failure in itself as an admission, and it has discretion to treat the respondent's right to file the defence as forfeited. Termination applies only to a claimant's default under Section 25(a).

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