Namrata Sen vs Captain Saurabh Chauhan (Retd.)

Ramesh Ranganathan, CJ

This application is filed, under Section 11 read with Section 14 of the Arbitration and Conciliation Act, 1996 (for short the "1996 Act"), seeking appointment/substitution of the Arbitrator.

Pursuant to an order passed by this Court, in Arbitration Application No. 47 of 2015 dated 11.06.2018, Justice Irshad Hussain, a former Judge of this High Court, was appointed as the sole Arbitrator, and was to constitute the Arbitral Tribunal. This order dated 11.06.2018 was subjected to challenge in Special Leave Petition No. 25315 of 2018 and, in its order dated 28.09.2018, the Supreme Court found no merit in the Petition, and accordingly dismissed the same. Thereafter, the learned Arbitrator entered upon the reference and passed an order, questioning which Appeal from Order No. 70 of 2019 was filed before this Court. A learned Single Judge of this Court, by his order dated 05.09.2019, set-aside the order passed by the Arbitral Tribunal dated 20.01.2019.

The applicant herein, thereafter, made an application before the learned Arbitrator, along with the order passed by this Court in Appeal from Order No. 70 of 2019 dated 05.09.2019, and requested the learned Arbitrator to proceed further in the case. In his order dated 15.09.2019, the learned Arbitrator observed that more than a year had elapsed since cognizance of the matter was taken, by the Arbitral Tribunal, by order dated 14.07.2018; and, in view of the provisions of Section 29A of the 1996 Act, the proceedings would remain in abeyance unless and until the parties to the case submit their consent, to extend the period specified in sub-section (1) of Section 29A of the 1996 Act, for further proceedings to be undertaken by the Arbitral Tribunal, and for an award be passed within a further period not exceeding six months from completion of one year of the arbitration proceedings. Aggrieved thereby, the present application is filed under Section 11 read with Section 14 of the 1996 Act.

Section 29A of the 1996 Act, as inserted by Act 3 of 2016 with retrospective effect from 23.10.2015, stipulates the time limit for an arbitral award. Under sub-section (1) thereof, the award shall be made within a period of twelve months from the date the Arbitral Tribunal enters upon the reference. Sub-section (3) of Section 29A provides that the parties may, by consent, extend the period, specified in sub-section (1) for making an award, by a further period not exceeding six months.

The requirement of Section 29A(3) of the 1996 Act is for the parties, to the arbitration agreement, to consent to extend the period, for an award to be passed, by a further period of six months. In the present case, the respondent has not consented, and the applicant has again invoked the jurisdiction of this Court.

Mr. B.D. Pande, learned counsel for the applicant, would submit that an application, under Section 11 read with Section 14(1) of the 1996 Act, is maintainable before this Court; while Section 11 of the 1996 Act relates to the appointment of an Arbitrator, Section 14 relates to failure or impossibility to act and, under sub-section(1)(a), the mandate of an arbitrator shall terminate, and he shall be substituted by another arbitrator, if he becomes de jure or de facto unable to perform his functions or, for other reasons, fails to act without undue delay. It is not even the applicant's case that the learned Arbitrator is unable to perform his functions either de jure or de facto, since it is the applicant herself who had made an application resulting in the order dated 15.09.2019 being passed by the learned Arbitrator.

The other limb of Section 14(1)(a) of the 1996 Act is that the mandate of an arbitrator shall terminate, and he shall be substituted by another arbitrator, if he fails to act without undue delay. In the present case it is on account of the intervention of the High Court, and the order passed by the Arbitral Tribunal being set-aside, does the delay appear to have occurred.

Mr. B.D. Pande, learned counsel for the applicant, would submit that, while an appeal was no doubt preferred against the order passed by the learned Arbitrator, there was no interim order passed by this Court during the pendency of the appeal, and it is in such circumstances that the applicant was forced to again invoke the jurisdiction of this Court seeking appointment of an Arbitrator in the place of the existing Arbitrator.

Section 15 of the 1996 Act relates to the termination of mandate and substitution of Arbitrator and, under sub-section (1) thereof, in addition to the circumstances referred to in Section 13 or Section 14 of the 1996 Act, the mandate of an arbitrator shall terminate on fulfillment of clauses (a) and (b) thereunder, neither of which are attracted in the present case. Section 15(2) of the 1996 Act stipulates that, where the mandate of an Arbitrator terminates, a substitute Arbitrator shall be appointed according to the Rules that were applicable at the time of appointment of the Arbitrator being replaced.

A request for substitution of an Arbitrator would arise only if the mandate of the existing Arbitrator is terminated and, since the applicant claims that the mandate of the existing Arbitrator stood terminated in view of Section 14(1)(a) of the 1996 Act, it is only if a finding is recorded that the mandate of the Arbitrator stood terminated, would the question of substitution of the Arbitrator, under Section 15 of the 1996 Act, arise. Section 14(2) of the 1996 Act stipulates that, if a controversy remains concerning any of the grounds referred to in clause (a) of Section 14(1), a party may, unless otherwise agreed by the parties, apply to the Court to decide on the termination of the mandate.

Section 2(1)(e) of the 1996 Act defines "Court" to mean, in the case of an arbitration other than an international commercial arbitration, the Principal Civil Court of original jurisdiction in a district, and includes the High Court in the exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration. Admittedly the Uttarakhand High Court does not exercise ordinary original civil jurisdiction, and consequently the Court, under Section 2(1)(e) of the 1996 Act, would only mean the Principal Civil Court of original jurisdiction, and it is the said Court which can decide whether or not the mandate of the Arbitrator stood terminated under Section 14(1)(a) of the 1996 Act.

Since the 1996 Act confers power, only on the Principal Civil Court of original jurisdiction of the district, to decide whether or not the mandate of the Arbitrator stood terminated under Section 14(1)(a) of the 1996 Act, an application, under Section 11 read with Section 14 of the 1996 Act, is not maintainable before this Court.

Leaving it open to the applicant to approach the competent Principal Civil Court of original jurisdiction of the concerned district, the Arbitration Application fails and is, accordingly, dismissed. No costs.