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2018 Supreme(Del) 170

IN THE HIGH COURT OF DELHI AT NEW DELHI
NAVIN CHAWLA, J.
Angelique International Limited - Petitioner
Versus
SSJV Projects Private Limited & Anr. - Respondents
O.M.P. (T) (COMM.) 91 of 2017 & I.A. Nos. 13595 & 14086 of 2017
Decided On : 05-04-2018

Advocates:
Advocate Appeared:
For the Petitioner: Mr. R.K. Sanghi, Mr. Ishan Sanghi, Mr. Satendra Kumar, Ms. Shreya Rao
For the Respondents: Mr. Sachin Datta, Ms. Prity Sharma, Ms. Rijuta Mohanty

The main legal point established in the judgment is the interpretation and application of Section 29A of the Arbitration and Conciliation Act, 1996, and the specific provisions and powers of the court in a situation where the mandate of the Arbitral Tribunal terminates due to non-making of the award within the prescribed time.

Headnote:

Arbitration - Joint Venture Agreement - Arbitration and Conciliation Act, 1996 - Section 29A - Summary of Acts and Sections: The court discussed the application of Section 29A of the Arbitration and Conciliation Act, 1996, which sets a time limit for making an arbitral award. The court interpreted the provisions of Section 29A and its implications on the termination of arbitration proceedings. The court also highlighted the specific provisions and powers of the court in a situation where the mandate of the Arbitral Tribunal terminates due to non-making of the award within the prescribed time.

Fact of the Case:

The dispute arose from a Joint Venture Agreement between the petitioner and respondent no.1 in relation to a project. The Sole Arbitrator terminated the arbitration proceedings as far as the claim petition filed by the petitioner is concerned, while proceeding further with the counter claims filed by the respondent no.1.

Finding of the Court:

The court found that the Arbitrator had not become functus officio in terms of Section 29A of the Act and had rightly terminated the arbitration proceedings with respect to the claims filed by the petitioner due to the petitioner's conduct indicating an intent not to proceed with the arbitration proceedings.

Issues: The issues included the interpretation of Section 29A of the Arbitration and Conciliation Act, 1996, the termination of arbitration proceedings, and the applicability of Sections 14 and 15 of the Act.

Ratio Decidendi: The court held that the remedy for the petitioner, if aggrieved with the termination of the arbitration proceedings, would be under Section 29A(4) read with Section 29A(5) of the Act. The court also emphasized that the specific provisions of the Act should be followed in a situation where the mandate of the Arbitral Tribunal terminates due to non-making of the award within the prescribed period.

Final Decision: The court dismissed the petition and imposed a cost of Rs.50,000/- on the petitioner.

JUDGMENT :

Navin Chawla, J.

1. This petition under Sections 14 and 15 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act’) has been filed by the petitioner challenging the order dated 19th September, 2017 passed by the Sole Arbitrator terminating the arbitration proceedings as far as the claim petition filed by the petitioner is concerned, while proceeding further with the counter claims filed by the respondent no.1.

2. Before adverting to the submissions made by the parties, a few facts may be noted.

3. The dispute between the parties is in relation to the Joint Venture Agreement dated 9th September, 2005 executed between the petitioner and respondent no.1. The respondent no.2 is the joint venture firm formed under the said agreement.

4. Respondent no.2 has been awarded the work of ‘Reconstruction, Rehabilitation and completion of Salma Dam Project (3x14 MW), Afghanistan, Package III: Main Civil and Hydro-Mechanical Work.”

5. Disputes having arisen between the parties, the Sole Arbitrator was appointed by this Court vide its order dated 5th September, 2016 passed in the Arbitration Petition no.442/2016 to adjudicate the same.

6. One of the major contentions raised by the counsel for the petitioner is that, in response to a query under the Right to Information Act, the Public Information Officer of this Court has given the information that the above order passed by this Court was delivered to the Sole Arbitrator through the special messenger on 19th September, 2016. Based on the above information, the Counsel for the petitioner submits that on 19th September, 2017, the date of the impugned order, the arbitrator had become functus officio in terms of Section 29A of the Act.

7. Section 29A (1) of the Act is reproduced herein below:-

“29A. Time limit for arbitral award.-

(1) The award shall be made within a period of twelve months from the date the arbitral tribunal enters upon the reference.

Explanation.- For the purpose of this sub-section, an arbitral tribunal shall be deemed to have entered upon the reference on the date on which the arbitrator or all the arbitrators, as the case may be, have received notice, in writing, of their appointment.”

8. A reading of the above mentioned Section would show that the Arbitrator must pass the award within a period of 12 months from the date when the Arbitral Tribunal enters upon the reference. For the purpose of calculating this period, the Arbitral Tribunal is deemed to have entered upon the reference on the date on which the Arbitrator receives the notice of his appointment.

9. In the present case, the parties had agreed before the Arbitrator that the reference had been entered into by the Arbitrator on 20th September, 2016 and the period of 12 months would expire on 19th September, 2017. This was also recorded by the Arbitrator in his order dated 13th August, 2017. The Arbitrator in his order dated 25th August, 2017 again recorded that the order appointing him as a Sole Arbitrator was received by him only on 20th September, 2016.

10. In view of the above, in my opinion, merely relying upon the information received under the Right to Information Act, the consistent stand of the Sole Arbitrator and the parties in the arbitration proceedings that the Arbitrator has received the order passed by this Court appointing him as the Sole Arbitrator only on 20th September, 2016 and that the period of 12 months would expire on 19th September, 2017, cannot be faulted and it cannot be said that the Arbitrator, when he passed the impugned order dated 19th September, 2017, had become functus officio or de jure unable to act as an Arbitrator for the purpose of the application of Section 14 of the Act.

11. It is further contended by the counsel for the petitioner that the arbitrator has erred in terminating the arbitration proceedings with respect to the claims filed by the petitioner due to the expiry of 12 months from the date of his entering upon reference. He submits that a reading















































































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