The main legal point established in the judgment is that the termination of the Arbitral Tribunal's mandate can be due to the efflux of time and non-payment of fees, and in such cases, the petition should be treated under Section 29A of A & C Act, 1996 for extension of the mandate.

JUDGMENT

Neena Bansal Krishna, J. (Oral)--The present petition has been filed under Section 14 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "A & C Act, 1996") on behalf of the petitioner for deciding the question of mandate of the Arbitral Tribunal and for its reinstatement for the adjudication of the disputes between the parties.

2. Facts in brief are that the parties entered into an Agreement dated 26th May, 2011 pursuant to it being awarded in terms of the Letter of Award dated 29th April, 2011. The petitioner has submitted that the respondent was in default and various disputes arose which could not be settled despite amicable settlement process being initiated.

3. The petitioner invoked Arbitration Clause in terms of the Agreement vide its Letter dated 31st December, 2013. The Arbitral Tribunal was constituted which had its first meeting on 05th November, 2016. The schedule of the arbitration proceedings was fixed and the fee of the Arbitral Tribunal was agreed to be shared equally by the parties. The petitioner submitted its claims of Rs.39,99,00,115/- against the respondent before the Arbitral Tribunal. The respondent raised a Counter-Claim on 15th February, 2017 of Rs.17,17,14,000/-.

4. The hearings were conducted by the Arbitral Tribunal but because of the ill-financial health, the petitioner was unable to make partial payment of the arbitral fees. In the year, 2017, the financial condition of the petitioner became extremely precarious and it was unable to deposit the arbitral fees fixed by the Arbitral Tribunal. The respondent intentionally declined to pay arbitral fee. The Arbitral Tribunal vide its Order dated 31st May, 2017 suspended the proceedings till full payment was made.

5. The proceedings were revived when the petitioner made balance payments of the Arbitrators' fee. Thereafter, few more sittings were conducted by the Arbitral Tribunal. However, because of the deteriorating financial health of the petitioner, it was not again in a position to deposit the arbitral fee. The respondent as well, despite having raised a counter-claim of Rs.17,17,14,000/-, did not deposit the arbitral fee. Thus, vide Order dated 07th November, 2017, the Arbitral Tribunal terminated the arbitral proceedings under Section 38(2) of the A & C Act, 1996 on the ground of non-payment of a portion of the arbitral fees.

6. The financial position of the petitioner improved and it moved an Application dated 02nd November, 2020 i.e. after about three years, requesting the Arbitral Tribunal to recall its Order dated 07th November, 2017 and recommence the arbitral proceedings. However, vide E-mail dated 06th November, 2020, the Arbitral Tribunal declined to recommence the arbitral proceedings on the ground that the mandate of the Arbitral Tribunal stands terminated as per Section 32 of A & C Act, 19996. Moreover, Section 29A of A & C Act, 1996 also provided that the mandate of the Arbitrators shall terminate unless the period is extended by the Court beyond the period. In the opinion of the Arbitral Tribunal, the mandate of the Arbitrators had ceased to exist on the date of application and the request made on behalf of the petitioner, was not acceded to.

7. The petitioner has asserted that the Arbitral Tribunal has wrongly disallowed the Application dated 02nd November, 2020 by not appreciating that the Order made under Section 38(2) of A & C Act, 1996 can be recalled, as the defect i.e., non-payment of the arbitral fee is curable by the Petitioner. Furthermore, the Order under Section 25 of A & C Act, 1996 can be recalled by the Arbitral Tribunal and the proceedings revived if the party files the statement of claim. The Order dated 07th November, 2017 of the Arbitral Tribunal is, therefore, liable to be recalled. Hence, the prayer has been made that the question of the mandate of the Arbitral Tribunal be decided and the Arbitral Tribunal be reinstated in terms of Section 14 of A & C Act, 1996.

8. Submission