IN THE HIGH COURT OF DELHI
Vibhu Bakhru, J.
Army Welfare Housing Organisation - Petitioner
Versus
M/s Mathur & Kapare Associates Pvt. Ltd. - Respondent
O.M.P. (T) (COMM.) 1 of 2016 & IA No. 648 of 2016
Decided On : 30-11-2016
Arbitration & Conciliation Act, 1996 - Section 14 - Arbitration - Stipulation of time - Expiry - waiver of stipulation - Arbitrator was required to make the award within a period of four months - Where parties have agreed that the arbitral award be made within the specified time - Mandate of the arbitrator would expire with the expiry of the specified period - Both the parties continued to participate in the proceedings without waiving the stipulation as to the time period in the arbitration clause - Having agreed for resolution of the disputes by arbitration, it is not open for any party to unilaterally withdraw from the proceedings contrary to their agreement - AWHO have not declined to participate in the arbitral proceedings with the expiry of four months - It participated in the proceedings and thereby having waived the stipulation - Held, it is not open for AWHO to unilaterally terminate the arbitration proceedings.
Mr. Vibhu Bakhru, J.
1. The Army Welfare Housing Organisation (hereafter ‘AWHO’) has filed the present petition under Section 14 of the Arbitration and Conciliation Act, 1996 (hereafter ‘the Act’), inter alia, praying as under:
“In the premise it is most respectfully prayed that this Hon’ble Court may the pleased to declare, hold and direct that:
(a) The Sole Arbitrator having been rendered ‘de jure/functus officio’ on and after 10 October 2015 on account of the Petitioner declining to accord/grant consent for enlargement/extension of time to publish his award, and having lost mandate under Section 14(1)(a) of the Act cannot proceed with the adjudication of the disputes between the Petitioner and the Respondent as directed vide Arbitrators order dated 21 December 2016;”
2. The arbitration clause between the parties expressly provides that the arbitrator will make and publish his award within a period of four months of entering upon the reference. AWHO asserts that since the said period has elapsed, the arbitrator no longer enjoys the mandate to proceed with the arbitration proceedings. The respondent (hereafter ‘MKAPL’) disputes the above contention and contends that AWHO by its conduct has enlarged the time for making of the award.
3. Briefly stated, the relevant facts necessary to appreciate the aforesaid controversy are as under:-
3.1 AWHO is a society registered under the Societies Registration Act, 1860 and is engaged in promoting Group Housing Projects for serving the requirements of retired army personnel and their widows. MKAPL is a private company and is inter alia engaged in rendering architectural services.
3.2 AWHO entered into a contract with MKAPL on 06.09.2007 (‘the Agreement’) whereby MKAPL was appointed as an Architect for a group housing project promoted by AWHO on a plot of land situated at Kanamangala (White Fields), Bangalore, Karnataka.
3.3 It is AWHO’s case that MKAPL breached the Agreement; it alleges that there was delay in completion at various stages and in addition, the designs submitted by MKAPL had serious technical flaws, which were discovered during the progress of the works. Accordingly, AWHO terminated the Agreement on 28.11.2011. MKAPL seriously disputes that it was in breach of the Agreement and claims that termination of the Agreement by AWHO was wrongful, arbitrary and malafide.
3.4 Since the disputes between the parties could not be resolved, MKAPL invoked the arbitration clause by its letter dated 02.02.2013. In terms of the arbitration clause, AWHO appointed Mr. Satish Chander, Chief Engineer (Contracts) as the Sole Arbitrator to adjudicate the disputes between the parties. The arbitrator entered upon reference on 03.10.2013 and by a communication of the said date, set down a schedule for completion of pleadings. The statement of claim was directed to be filed by 10.11.2013; pleadings in defence were directed to be filed by 15.12.2013; and rejoinder, if any, was to be filed by 05.01.2014. Both the parties, MKAPL as well as AWHO, sought extension of time on more than one occasion for submission of their claim. The arbitrator acceded to the request of the parties and extended time for filing of the pleadings. MKAPL filed its statement of claim before the arbitrator on 31.03.2014. AWHO filed its counter claim before the arbitrator on 28.04.2014 and sought time for filing the Statement of Defence upto 05.05.2014. The same was granted by the arbitrator. AWHO filed its statement of defence on 30.05.2014.
3.5 The arbitral proceedings before the arbitrator continued and, thereafter, several hearings were held. It is also a matter of record that hearings scheduled by the arbitrator on several occasions were deferred at the request of AWHO. The parties also filed further supplementary pleadings during the course of the proceedings.
3.6 The final arguments commenced before the arbitrator on 09.01.2015 and continued on 10.01.2015. Thereafter, the matter was adjourned to 20.02.2015 and 21.02.2015 and
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