An arbitral award may be set aside if made after expiry of the arbitrator's mandate or due to undue delay impacting its validity, reflecting violations of natural justice.

JUDGMENT :

SANDEEP V. MARNE, J.

1. Petitioner has filed the present Petition under Section 34 of the Arbitration and Conciliation Act, 1996 (the Arbitration Act) challenging the Award of the sole Arbitrator dated 31 May 2021. By the impugned Award, the learned Arbitrator has rejected all the claims raised by the Petitioner.

2. The Petitioner is a government contractor, undertaking various contracts for the Railways. The Respondent-Central Railway invited tenders for the work of ‘Annual Maintenance Contract of RMPUs’ of M/s. Sidwal Fedders Liayd, Amit Engineers, Amber Enterprises and Daulatram industries make fitten in AC coaches in Mumbai, Bhusawal (at MMR), Nagpur, Solapur and Pune Division for a period of three years at contract value of Rs.5,74,72,366/-. Petitioner’s tender for 34% above the tendering cost was accepted and the Petitioner was awarded work order for 36 months commencing from 15 September 2010 to 14 September 2013. The Petitioner continued performing the work during currency of the contract and for a period of four months in excess and claims to have carried out work till 31 December 2013 to the extent of Rs.6,05,01,881.00. The disputes arose between the parties with regard to claims raised by the Petitioner. The Petitioner invoked arbitration clause by letter dated 9 August 2012 and subsequently by letter dated 30 October 2014. The General Manager appointed Shri D.J. Sengupta, Deputy Chief Accounts Officer(G), Central Railway, Mumbai CST as a sole Arbitrator to resolve the disputes vide letter dated 12 August 2015. The Petitioner filed statement of claim dated 24 December 2015. Since the Respondent failed to file statement of defence, the Petitioner prayed for making the Award by filing application dated 28 May 2016. Respondent thereafter filed statement of defence on 2 July 2016. The learned sole Arbitrator conducted one arbitration meeting on 17 June 2017. Since no further dates were fixed, the Petitioner requested the Arbitrator to fix the date of hearing by letter dated 4 April 2018. According to the Petitioner, since no hearing was conducted after 17 June 2017, mandate of the Arbitrator came to an end in the year 2018 and accordingly, the Petitioner intimated the General Manager about status of arbitration proceedings by letter dated 3 March 2021 and requested for substitution of the Arbitrator.

3. Instead of substituting the arbitrator, the General Manager directed the sole Arbitrator by letter dated 16 March 2021 to finalise the arbitration proceedings. Since the General Manager failed to substitute the arbitrator, the Petitioner filed Commercial Arbitration Petition (L) No.8695 of 2021 (subsequently numbered as 814 of 2024) on 24 March 2021 for appointment of arbitrator, who was not in employment of the Respondent. The Petition was filed under Sections 14 and 15 r/w Section 11 of the Arbitration Act. However, the learned sole Arbitrator fixed date for final hearing of arbitral proceedings on 28 April 2021. The date was rescheduled by the Arbitrator vide his letter dated 26 April 2021 from 28 April 2021 to 20 May 2021. The Petitioner objected to the learned sole Arbitrator in proceeding ahead with the arbitral proceedings and informed him about filing of Commercial Arbitration Petition No.814 of 2024 and requested the Arbitrator not to proceed ahead of arbitral proceedings on account of expiry of the mandate. According to the Petitioner, without conducting hearing on 20 May 2021, the learned sole Arbitrator made Award dated 31 May 2021, which was