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2024 Supreme(Del) 216

IN THE HIGH COURT OF DELHI AT NEW DELHI
Prathiba M. Singh, J.
Ajanta Soya Limited - Appellant
Versus
The Oriental Insurance Company - Respondent
O.M.P.(MISC.)(COMM.) 92 of 2024 and I.A. 3399 of 2024
Decided On : 13-02-2024

Advocates appeared:
Mr. Saaket Jain & Ms. Shivangi Anand, Advs., for the Petitioner.
Mr. Asim Vidyarthi, Adv., for the Respondent.

IMPORTANT POINT
The importance of time-bound completion of proceedings under Section 29A of the Arbitration and Conciliation Act, 1996, and the public policy of India in ensuring expeditious and effective disposal of matters.

Headnote:

Arbitration - Extension of Mandate - Arbitration and Conciliation Act, 1996 - Section 29A

Fact of the Case:

The petitioner sought an extension of the mandate of the arbitral tribunal under Section 29A of the Arbitration and Conciliation Act, 1996, due to substantial delay in filing the application.

Finding of the Court:

The court found that the substantial delay in seeking extension was contrary to the spirit of Section 29A of the Act, which mandates time-bound completion of proceedings.

Issues: Delay in seeking extension of arbitral tribunal's mandate under Section 29A of the Act.

Ratio Decidendi: The court emphasized the importance of expeditious and effective disposal of matters under the Arbitration Act, and held that substantial delay in seeking extension was in conflict with the public policy of India.

Final Decision: The court set aside the impugned award, deemed it appropriate to extend the mandate of the Arbitral Tribunal till 31st March, 2024, and disposed of the petition and any pending applications.

JUDGMENT

Prathiba M. Singh, J. (Oral)

1. This hearing has been done through hybrid mode.

I.A. 3399/2024 (for exemption)

2. This is an application seeking exemption from filing originals/certified/cleared/typed copies of documents, etc. Original documents shall be produced/filed, if sought, strictly as per the provisions of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 and the Delhi High Court (Original Side) Rules, 2018.

3. Exemption is allowed, subject to all just exceptions.

4. Accordingly, the application is disposed of.

O.M.P.(MISC.)(COMM.) 92/2024

5. The present petition has been filed by the Petitioner under Section 29A of the Arbitration and Conciliation Act, 1996 (hereinafter, `the Act'), seeking extension of mandate of the arbitral tribunal till 15th April, 2024.

6. The Arbitral Tribunal was constituted in this matter on 29th October, 2020 and as per the ld. Counsel for the parties, the mandate expired in February, 2023 after excluding the period of the COVID-19 pandemic. It is noted that there is substantial amount of delay, despite the extension taken as per the order of the Supreme Court in Suo Moto Writ Petition (C) No. 3/2020, which excluded the period from 15th March, 2020, to 28th February, 2022.

7. It is surprising to note that parties have approached this Court almost after a one year's delay for seeking extension of the mandate. Ld. Counsel for the parties submit that after February, 2023, the evidence was also recorded. However, the parties inadvertently missed out on giving consent for an extension of six months.

8. Even taking the six months period to be impliedly agreed to between the parties, the application is being moved with more than six months' delay. Though there can be no doubt that under Section 29A of the Act, extension can be granted by the Court, such a long period of delay in filing such an application is contrary to the spirit of Section 29A under the Act. The same has been elaborated in the case of Department of Transport, GNCTD v. Star Bus Services Pvt. Ltd. (2023 SCC OnLine Del 2890). The relevant extracts of the said judgement are set out below:

    "Spirit of the Arbitration Act

    30. The Arbitration Act was enacted for providing a mechanism to the public to resolve their disputes in a process less rigorous, technical and formal than that of litigation. It has proven to be easier, more accessible, efficient and even cost effective for the parties involved, whether at an individual level or at the level of a business or corporation.

    31. The alternative dispute mechanism is not only advantageous for the people involved in disputes but has also been aiding the effective disposal and release of burden on the Courts of the Country. The parties have a more hands-on involvement in an Arbitration process and play an active role in the adjudication process.

    32. The Hon'ble Supreme Court in Union of India v. Varindera Constructions Ltd., (2018) 7 SCC 794, while discussing the object of arbitration held as under:-

    "12. The primary object of the arbitration is to reach a final disposition in a speedy, effective, inexpensive and expeditious manner. In order to regulate the law regarding arbitration, legislature came up with legislation which is known as Arbitration and Conciliation Act, 1996. In order to make arbitration process more effective, the legislature restricted the role of courts in case where matter is subject to the arbitration. Section 5 of the Act specifically restricted the interference of the courts to some extent. In other words, it is only in exceptional circumstances, as provided by this Act, the court is entitled to intervene in the dispute which is the subject-matter of arbitration. Such intervention may be before, at or after the arbitration proceeding, as the case may be. In short, court shall not intervene with the subject-matter of arbitration unless injustice is caused to either of the parties."

    33. Therefore, expeditious and effective disp

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