Dilnawaz Kohinoory and Others vs Boman Kohinoor and Others

By the present Application, the petitioners have applied in terms of Section 11 of the Arbitration and Conciliation Act, 1996 to appoint an Arbitrator in order to decide the disputes that have arisen amongst the petitioners and the respondents in respect of and/or arising out the Contract dated 30th March 1993. Earlier on an application u/s 11, in respect of the same subject matter the parties were referred to an Arbitral Tribunal, which closed the arbitral proceedings u/s 25 of the Act of 1996. The learned Counsel on behalf of the petitioners contends that even if earlier u/s 11 the parties had been referred in respect of the very subject matter to Arbitration, mere closure of proceedings u/s 25 of the Act will not preclude a fresh application u/s 11. It is contended that the provisions of Order IX, Rule 9 of the CPC would not apply and consequently, there is no bar for another application u/s 11. Reliance was placed on various Judgments to contend that there is no bar u/s 11 in once again referring the dispute to arbitration. Reference is made in the case of Sadasshivrao Raghunathrao Gandekar Vs. Anandrao Raghunathrao Gandekar and Another, . That was a matter where the proceedings were for grant of letters of administration. The learned Judge of this Court held that Order IX Rule 9 CPC would not apply and even if the earlier proceedings had been dismissed for non-prosecution, a fresh application would lie. Reference in the Judgment was made to various other Judgments of other High Courts which had taken a similar view. All the other Judgments referred references are more or less to the same effect. The courts have taken a view that if Order IX, Rule 9 does not apply, then there would be no bar in taking out a fresh application.

Section 5 of the Arbitration and Conciliation Act, 1996 sets out that notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part. It is true, as now construed, that the power of Section 11 is not an exercise of judicial power, but is an administrative power. See Wellington Associates Ltd. Vs. Mr. Kirit Mehta, . Question, however, is whether after reference u/s 11 and on the closure of proceedings u/s 25 for whatever reason, whether it will be open u/s 11, without getting the order passed u/s 25 set aside, to refer the parties back to arbitration in respect of the very same subject matter. u/s 25(a) of the Act if a party does not show sufficient cause and does not communicate the statement of claim in accordance with Sub-section (1) of Section 23, the Arbitral Tribunal shall terminate the proceedings. The effect of such termination can be seen u/s 32 of the Arbitration and Conciliation Act, 1996 which provides that on such an order being passed, the arbitral proceedings shall stand terminated. In other words, the referral of dispute constituting-a subject matter of arbitration before an Arbitrator stands concluded on an order passed u/s 25 read with Section 32. Considering that, if the matter was before the Court considering Section 5, that would be barred as the Act of 1996 does not provide for any remedy against such an order. A similar issue was in issue before me in the case of M/s. Anuptech Equipments Private Ltd. Vs. M/s. Ganpati Co-op. Housing Society Ltd. and others, . The issue was what is the remedy the party has in the event the proceedings are closed u/s 25. On a consideration of the provisions of the Act and the fact that no party can be left without a remedy and after arriving at the conclusion that under the Act of 1996 the Arbitrator can be said to be a ''person'' to whom a writ would go. I have taken the view that the extraordinary remedy by way of Article 226 would be available.

We have, therefore, before us a case where the subject matter of the dispute was referred to arbitration. Those proceedings have been closed. A similar application is now once again made for referring the very same claim u/s 11. The Arbitral Tribunal is not bound by the provisions of the Civil Procedure Code. See: Section 19 of the Act. Even otherwise, the power under Order IX Rule 9 has not been specifically conferred. There is a decision given by the Arbitral Tribunal resulting the termination of the proceedings. To my mind, once the power was exercised u/s 11 and the proceedings have been closed u/s 25, there is no further power considering the nature of the power u/s 11 to once again refer the same disputes to arbitration, u/s 11, unless the order closing the proceedings is set aside.

In view thereof, in my opinion, the second application is not maintainable and is consequently dismissed.

Certified copy expedited.

A simple copy of this Order, duly authenticated by the Associate of this Court, be given to the parties.

Application dismissed.