Introduction:

In the landscape of corporate arbitration, procedural formalities play a pivotal role in ensuring that the actions taken by individuals on behalf of a company are duly authorized. However, does a procedural misstep have the power to negate substantive rights? This question was at the heart of the case of Palmview Investments Overseas Limited v. Ravi Arya, adjudicated by the Bombay High Court.

The Ruling:

The Court, in its deliberation, underscored the importance of procedural requisites while also drawing a boundary on their impact over substantive rights. The focal point was the validity of the Board Resolution that authorized a person to initiate arbitration on behalf of the company.

In its judgment, the Court held that the requirement of a board resolution is indeed procedural. Any deficiency in such a resolution was deemed by the Court as a procedural irregularity, not potent enough to eclipse the substantive rights of a party.

Notably, the tribunal was acknowledged to possess the power to allow a party to rectify the procedural misstep. The Court affirmed that a mere deficiency or defect in the authorization, stemming from an invalid Board Resolution, isn’t a solid ground to spurn the claims of a party.

Implications:

This ruling amplifies a pragmatic approach towards procedural irregularities, particularly in the realm of corporate arbitration. It elucidates that while procedural compliances are crucial, they should not morph into impediments that thwart substantive justice.