ARBITRATION PROCEEDINGS –

SIMULATION EXERCISE
This arbitration proceedings is spanned for a time period of 3 days
hearing 1 session per day.
ROLES ASSIGNED
Arbitrator: Deepthi R.D
Claimant: Ganesh Joshi
Claimant Counsel: Anandan
Respondent: Nisha .N
Respondent Counsel: Arshiya Parveen
Witness for claimant: Aditya Ashok
Witness for respondent: Divya N.B

SYNOPSIS
DAY-1
Introduction by arbitrator and preliminary statements
Introduction by counsels and parties
Opening statements by the respective counsels
DAY-2
Arguments from both the counsels ,Examination in chief
Cross examination – witness
DAY-3
Presenting of citations, case laws, Closing statements
AFTERNOON - AWARD
SIMULATION SCRIPT – ARBITRATION
DAY - 1
INTRODUCTION:-
ARBITRATOR [Deepthi]: Good morning , my name is Deepthi .I am the sole
arbitrator in this Proceedings. My decision is legally binding on both the parties
as per the agreement let’s start with today’s proceedings. Parties and counsels ,
please introduce yourselves.
CLAIMANT COUNSEL[Anandan]: Good morning ,ma’am I am Anandan
representing as claimant counsel for my client Ganesh Joshi.
Claimant [Ganesh Joshi]: Good morning, I am Ganesh Joshi the claimant in this
dispute, who is a lesee in this current dispute.
Respondent counsel[Arshiya Parveen]: Good morning ma’am, I am Arshiya
representing as respondent counsel in this dispute on behalf of respondent.
Respondent [ Nisha]:Good morning ma’am I am Nisha a director of forest
development corporation of Karnataka government .

Isssues Raised:
Here are a set of issues that I have framed which need to be deliberated in the
final award.
1)Did the Forest Development Corporation of Karnataka Government violate
the Forest Conservation Act by leasing out the forest property without
obtaining permission from the central government?
2)Can leasee claim compensation for investment made in the construction of
the hotel and resorts despite the central government’s denial of permission
and forest clearance?
3)Is the arbitration clause invoked by the respondents valid and enforceable ?
These are the three issues raised before the arbitration tribunal,if there is a
need for the inclusion of additional issues as the case maybe,during the
proceedings then with the consent of the parties,the tribunal is empowered to
consider the same ,in case only if the stated issues have substantial impact on
the ‘core dispute ‘.
OPENING REMARKS :-
Arbitrator(Deepthi): Let’s start with opening remarks from claimant counsel. I
call upon the claimant counsels to start the sessions .
Anandan(Claimant Counsel): Much obliged my lord . I am the counsel for the
claimant in this matter. My client Ganesh Joshi entered into an lease agreement
with the forest development corporation of Karnataka government with the
area of 5 acres forest land . We executed the agreement on 6 sept 2019, and
the copy of the agreement of the lease is submitted as [EXIHIBIT- P1].
Similarly at the time of executing lease agreement ,my lord my client Ganesh
Joshi was advised or informed by the forest officer to send a forest clearance
letter to the central govt the ministry of environment , forest and climatic
change .At that time the officer told my client that the application is only a
formality to the central govt where the central govt will give you the
permission .
The central govt itself will arrange some way to clearance of forest. Here my
client did the same , he sent an application for the clearance of forest area that
has been leased by him to construct his resort . My ,lord the copy of the
application that my client has made his submission as [ EXIHIBIT-P2]
In this matter my lord, as you can see after making a lease agreement on 6th
September 2019 my client Ganesh Joshi started the construction on 2020
January by investing a huge amount and was expected to complete the
construction on 2023 February as per engineers expectation.
But on 12th November 2022 my client got a notice that the central government
has declined the permission for the clearance of forest under Section 2 of the
Forest Conservation Act by seeing that forest land cannot be used for non-
forest purpose.
Here my lord my client is now into a big problem, as the central government
has declined to give permission for the clearance of forest and to construct a
resort, but he has already invested a sum of amount up to Rs.1 crore and the
resort is about to start now, but the declination by the central government has
caused a lot of loss in his investment , due to which my client is facing a mental
trauma therefore my client is claiming for compensation for the loss that he
has suffered , that's all my lord.
Arbitrator(Deepthi): I call upon the respondent counsel to make her opening
remark
Arshiya(Respondent Counsel): Much obliged my lord, good afternoon all I am
Arshiya Parveen the respondent counsel in this matter. It is an undisputed fact
that my client ,had entered into an agreement of lease with the claimant.
I would like to make some facts regarding the disputes as following:
1)The claimant Mr. Ganesh Joshi did not wait for the response of the central
government for which he had sent an application, which was his first big
mistake.
2)Secondly, he was aware about the fact, that he cannot construct or build any
resort or a building on the forest land without the prior permission of the
Central Government, so on which basis he was asking the compensation from
my client.
Arbitraror(Deepthi):Counsel for the claimant , do you agree with these
arguments that are stated by the respondent counsel?
Anandan(Claimant Counsel): My lord, I would like to make this honourable
submission before my lordship. I don’t deny the first point which my learned
counsel stated. Here my lord as my learned counsel has raised the question
that why the claimant constructed the resort without the permission of the
Central Government?
I would like to answer this question my lord , my client did not wait for the
reply because he was told that the central government will not decline the
permission, it will either give the permission to clear the forest or would
arrange some ways to clear it by itself.
So, here indirectly the officer indicated that the central government will not
deny the clearance, hence my client had started the construction, my lord.
Similarly, he was not aware of the law that the central government permission
is foremost to construct , a building. If he was aware ,why he would have
wasted ,that much of money there? Here the aware person was the forest
officer ,who mis leaded my client by indirectly saying that the central
government will not decline the permission for the clearance. So he cleared the
forest himself and started the construction.
Now, the central government has declined to grant the permission and
whatever construction has been made till todays date is now waste and the
same will be demolished by the central government, which may cause my
client heavy loss of money and mental trauma.
For all the reasons/arguments stated above , I humbly request my lordship to
give a suitable award in the interest of justice and equity.
That’ s all my lord.
Arbitrator(Deepthi): I have heard both the counsels in the admissibility of the
evidence. The session is adjourned to the next date which will be updated
soon.

DAY-2
Examination of Witness: Examination in chief.
Arbitrator(Deepthi): Good afternoon all, let us continue from the last session,
after hearing both the parties. Now I request claimant counsel to conduct
chief-examination.
Anandan(Claimant Counsel): Much obliged my lord , I request Mr. Ganesh Joshi
to be present in the witness box.
Mr. Ganesh what was your total cost for the construction of the building and
were you not aware about the law that without the prior permission of the
central government you cannot make the construction in the forest land.
Ganesh: My lord, I have invested almost 1 crore of amount in that land and I
was literally not aware that the central government has to give permission for
the clearance , but the officer told me that the central government will not
decline the permission, rather it will give permission to clear or itself will do
some arrangements for the clearing of that specific place of lease.
Anandan(Claimant Counsel): So you are saying that you were not aware not
aware about the consequences which may arise when the central government
will not grant permission for the forest clearance.
Ganesh: Yes sir, that is absolutely correct.
Anandan(Claimant Counsel): That’s all my lord.
Arbitrator(Deepthi): Now, I would like to ask whether ,the respondent counsel
wants to conduct chief-examination.
Arshiya(Respondent Counsel): Yes, my lord. I would like to call upon Ms. Nisha
to the witness box.
Arbitrator(Deepthi): You may proceed.
Arshiya (Respondent Counsel): Ms. Nisha do you admit the facts said by Mr.
Ganesh, that you guided him to continue with the construction without any
issuance of the clearance circular.
Nisha: NO, mam as the moment where Mr. Ganesh himself wanted to construct
the resorts as soon as possible so he had made a note for quick construction of
resort. So I didn’t mis-guide him. I just had informed him saying that as earlier
there were no permission letter sent to central government has denied as
considering his request for early construction.
Arshiya : My lordship , I would like to make this point clear that my client did
not mis-guide or mis-lead to Mr. Ganesh. As he himself is making the stories
regarding this.
Arbitrator[ deepthi] :know I call upon the counsels to begin with their cross-
examination
CROSS EXAMINATION
Arbitrator[deepthi] : let’s begin with the cross-examination for this session.I call
the claimant counsels.
Anandan [claimant counsel]: thank you maam .i would like to call Ms.Nisha to
witness box.
Anandan [claimant counsel]: Can I know your name and ur designation
Ms.nisha?
Respondent [Nisha] : yes ! I am Nisha the director of forest development
corporation of Karnataka.
Anandan [claimant counsel]: Mam I would like to continue .
Arbitrator[deepthi] : yes u may proceed.
Anandan [claimant counsel]: much obliged my lordship. As she is held liable
under section 3B of forest conservation act,1980.and are you aware about this.
Respondent [Nisha] : No , I m not aware about it.
Anandan [claimant counsel]: I would like to state the provisions mentioned
under this section to you my lordship : 3B. Offences by authorities and
Government departments.—(1) Where any offence under this Act has been
committed—
(a) by any department of Government, the head of the department; or

(b) by any authority, every person who, at the time the offence was committed, was directly in
charge of, and was responsible to, the authority for the conduct of the business of the authority as
well as the authority, shall be deemed to be guilty of the offence and shall be liable to be proceeded
against and punished accordingly: Provided that nothing contained in this sub-section shall render
the head of the department or any person referred to in clause (b), liable to any punishment if the
proves that the offence was committed without his knowledge or that exercised all due diligence to
prevent the commission of such offence

(2) Notwithstanding anything contained in sub-section (1), where an offence punishable under the
Act has been committed by a department of government or any authority referred to in clause (b) of
sub-section (1) and it is proved that the offence has been committed with the consent or connivance
of, or is attributable to any neglect on the part, of, any officer, other than the head of the
department, or in the case of an authority, any person other than the persons referred to in clause
(b) of sub-section (1), such officer or persons shall also be deemed to be guilty of that offence and
shall be liable to be proceeded against and punished accordingly.]

My lordship according to this provision the offences made by any authorities

and government departments must be deemed to be guilty of the offence and
shall be liable to be proceeded against and punished accordingly . that’s all my
lordship.
Anandan [claimant counsel]: okay ,you may be seated now.
Anandan [claimant counsel]: my lordship I would like to call Mr. Aditya PW1 to
witness box who is rounding officer of forest department .
Arbitrator(Deepthi): Yes, you may.
Anandan [claimant counsel]: Mr. Aditya can I know what is your designation?
Aditya[PW1]: YES sir, I am Aditya Ashok the rounding officer under forest
development corporation .
Anandan [claimant counsel]: so Mr. Aditya as you’re a officer of forest
department you never asked my client Mr. Ganesh on what permission basis is
he constructing a high level resorts and hotels in forest area.
Aditya[PW1]: sir , I had asked to those persons, who were working there, they
said that they have taken prior permission by state government.
Arbitrator[deepthi] : I call the respondent counsels to begin with her cross-
examination.
Arshiya (Respondent Counsel): thank you maam . I would like to call upon Mr.
Ganesh to the witness box .
Arbitrator(Deepthi): Yes, you may proceed.
Arshiya(Respondent Counsel): So you are Mr. Ganesh?
Ganesh: Yes ma’am.
Arshiya(Respondent Counsel): Mr. Ganesh you are saying that you did not know
that the central government will have to grant the permission for the
clearance, then why did you make an application to the central government.
Ganesh: My lord, Ms. Nisha only suggested me to send that application to the
central government, so I did it.
Arshiya(Respondent Counsel): Okay Mr. Ganesh , for the application Ms. Nisha
had suggested you, note this point my lord. So u have applied.
So after that you weren’t aware of the reply of the central government.
Ganesh: yes sir , I was aware of it.
Arshiya(Respondent Counsel): I would request my lordship to mark this.
Arshiya(Respondent Counsel): Mr. Ganesh what is your total amount invested
in the construction.
Ganesh: My lord, it is almost Rs.1 crore for completion of my hotels and
resorts.
Arshiya(Respondent Counsel): Mr. Ganesh are you sure it is 1 crore?
Ganesh: Yes, maam.
Arshiya(Respondent Counsel): I would request you to note the invested amount
said by Mr. Ganesh my lordship.
Now my lord I seek your permission to present CW1 witness Ms. Divya who is
the engineer of the construction made for Nandi resort of Mr. Ganesh.
Arbitrator(Deepthi): Yes, you may proceed.
Arshiya(Respondent Counsel): Ms. Divya please can you come to the witness
box.
So Ms. Divya what is your designation?
Divya: I am a civil engineer.
Arshiya(Respondent Counsel): So you are the engineer, who looked into all the
construction activities of Mr. Ganesh’s resort ?
Divya: Yes, maam.
Arshiya(Respondent Counsel): So Ms. Divya inform this Hon’ble tribunal about
the total cost that may take for the investment for this types of resort.
Divya: My lord as I have plans , blueprints and other required forms which I
can say that the investment for this kind of resort may take 80-85 lakhs and not
more than that.
Arshiya(Respondent Counsel):Kindly note this point my lord. Here she is saying
80-85 lakhs maybe the maximum investment were Mr. Ganesh is telling Rs.1
crore which clearly states his mindset to fool us and to get more compensation
from my client which is surely not lawful and baseless lordship.

DAY-3
Arbitrator(Deepthi): I call upon the claimant counsel for his further arguments.
Anandan(Claimant Counsel): My lordship as I mentioned above during my
cross-examination under section 3B of forest conservation act of 1980. As there
is a fault upon the respondent as she mis-guided my client.
Anandan(Claimant Counsel):My lord ,due to the huge loss my client is suffering
from mental trauma. The amount of total cost of construction may not be
accurate. But my client needs full compensation of whatever he has spent in
the construction of resort.
Arbitrator(Deepthi): now I call upon the Respondent Counsel further
arguments.
Arshiya(Respondent Counsel]: yes my lordship, I would state Section -2 OF
FOREST CONSERVATION ACT ,which sates as- Restriction on the dereservation
of forests or use of forest land for non-forest purpose.— Notwithstanding anything
contained in any other law for the time being in force in a State, no State Government or
other authority shall make, except with the prior approval of the Central Government, any
order directing— (i) that any reserved forest (within the meaning of the expression
“reserved forest” in any law for the time being in force in that State) or any portion thereof,
shall cease to be reserved; (ii) that any forest land or any portion thereof may be used for
any non-forest purpose. 2 [(iii) that any forest land or any portion thereof may be assigned
by way of lease or otherwise to any private person or to any authority, corporation, agency
or any other organization not owned, managed or controlled by Government; (iv) that any
forest land or any portion thereof may be cleared of trees which have grown naturally in that
land or portion, for the purpose of using it for reafforestation.] 3 [Explanation.—For the
purposes of this section “non-forest purpose” means the breaking up or clearing of any
forest land or portion thereof for— (a) the cultivation of tea, coffee, spices, rubber, palms,
oil-bearing plants, horticultural crops or medicinal plants; (b) any purpose other than
reafforestation, but does not include any work relating or ancillary to conservation,
development and management of forests and wild life, namely, the establishment of check-
posts, fire lines, wireless communications and construction of fencing, bridges and culverts,
dams waterholes, trench marks, boundary marks, pipelines or other like purposes.]

Arshiya(Respondent Counsel]: And I would like to state a citation regarding my

relevant facts :
UNION OF INDIA AND OTHERS -V- KAMATH HOLIDAYS RESORTS PVT.LTD
:- Here the facts are as fallows – the collector of union territory demands
leased out a site in the reserved forest area to the respondent for the purpose
of establishing a snack bar and a restaurant to cater to the needs of tourists
visiting the forest . the conservator of forest objected to the grand of such
lease, citing the restrictions on the dereservation of forest or use of foret land
foe non-forest purposes , as in envisaged under section 2 of the forest
conservation act 1980.
Decisions : the high court approved the action of the collector of the union
territory , daman, despite the objection of the conservator of forest . however,
the high court decision was based on an erroneous understanding law.
Arshiya(Respondent Counsel]: I had put forward the required points on my part
.
Arbitrator(Deepthi): I heard both the counsel on the admissibility of the
evidence .The session is being adjourned to the next date which will be
updated soon.

DAY-3

Final Arguments:
Arbitrator(Deepthi): Good afternoon all, we have reached the final arguments
stage and today both counsels will proceed with closing remarks. I would call
the claimant counsel to start now.
Anandan(Claimant Counsel): Thank you my lord ,I will submit my points before
my lordship and rest my case .
My lord , now it is undisputable fact that the constructed resort will be
demolished as central government did not approve to the application.
Now my client cannot run his resort ,thereafter he will have to suffer huge loss
which in turn he needs to be compensated with whatever he has invested
there.
My lord I humbly pray this Hon’ble tribunal to direct the respondent to
compensate the whole amount which he has invested in the construction
which is around Rs.85 lakh, with this I rest my argument .
Arbitrator(Deepthi):Now,I call upon the respondent counsel to submit her
arguments .
Arshiya(Respondent Counsel): Thank you my lord,I will submit my points before
my lordship and rest my case.
My lordship, first thing is that Mr.Ganesh did not wait for the response of
central government.Despite of excuses, he has stated that ,”a wise man
should always wait for the response ,if he has seeked someone’s permission
whatever the situation maybe”.
Secondly ,my lordship,my client cannot pay the full compensation amount of
the construction which is of Rs.85 lakhs ,as there is mistake from the claimant
side because he did not wait for the response even after sending the forest
clearance application.
Therefore, on the contrary, my lordship, I humbly request this Hon’ble tribunal
that my counsel is just able to compensate the claimant around 40-45% of the
total investment which may sum up to Rs.35 lakhs.
With this , I rest my arguments ,thank you my lord.
Arbitrator(Deepthi): I heard both the counsels and parties and I would pass my
Award in afternoon.
I the appointed arbitrator under the provisions of ARBITRATON AND
CONCILATION ACT OF 1996 , like to thank everyone present in this arbitral
proceeding which is lawful and binding upon.
And fallowed by Award is been passed .
THANK YOU FOR CHOOSING ARBITRATION AND ME AS YOUR ARBITRATOR TO
RESOLVE YOUR DISPUTE.
HOPE THIS ARBITRATION PROCEEDINGS ARE BENEFICIAL FOR BOTH THE
PARTIES.