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IN THE HIGH COURT OF DELHI
Mini Pushkarna, J.
Tricolor Hotels Limited - Appellant
Versus
Dinesh Jain - Respondent
O.M.P. (T) (COMM.) 99 of 2018 & I.A. No. 13048 of 2018
Decided On : 09-11-2022




The limitation for filing petitions under the Arbitration and Conciliation Act starts from the date of the arbitrator's recusal, requiring adherence to statutory timelines for expeditious dispute resolution.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 15 - Petition for appointment of a substitute arbitrator following prior arbitrator's recusal - Petition filed after more than three years without sufficient cause for delay - Limitation begins from the date of recusal, not from alleged knowledge - Petition dismissed, emphasizing need for expeditious resolution of arbitration disputes and the importance of adhering to statutory timelines. (Para 45)

(B) Limitation Act, 1963 - Article 137 - The right to apply for substitution of an arbitrator accrues upon the arbitrator's recusal - Parties must approach the Court within the statutory period without unnecessary delay - The principle of expeditious arbitration emphasized by the Supreme Court. (Paras 18, 39)

Table of Content
1. petitioner seeks appointment of a new arbitrator due to previous arbitrator's recusal. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8)
2. respondents argue inordinate delay in filing petition with no acceptable justification. (Para 9 , 10 , 11)
3. petitioners hold that limitation starts after 30 days post-recusal according to article 137. (Para 12 , 14 , 15)
4. court examines accrual of right to apply for arbitrator substitution and outlines the limitation period. (Para 16 , 17 , 18 , 19 , 20 , 21)
5. key legal observations made regarding the procedures of appointing a substitute arbitrator. (Para 22 , 23 , 24 , 25 , 26 , 27 , 28)
6. court clarifies that limitation period for filing is governed by article 137 irrespective of knowledge. (Para 29 , 30 , 31 , 32)
7. petition is dismissed with no sufficient cause shown for condoning delay. (Para 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45)

JUDGMENT

Mini Pushkarna, J.

1. By way of the present petition under Section 15 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "Act"), petitioner is seeking appointment of a substitute arbitrator as the earlier arbitrator recused himself from adjudicating the matter vide order dated 27.07.2015 conveyed by email of even date.

2. Two Share Purchase agreements dated 04.11.2006 were signed and executed between the petitioners and respondents. Subsequently, since disputes arose between the parties in respect of the agreements, petitioners through their counsel issued arbitration notice dated 27.05.2009 to the respondents invoking arbitration clause.

3. As per the agreements, one arbitrator was to be appointed by each of the parties. The two appointed arbitrators were to appoint a Presiding arbitrator. Thus, petitioners nominated an arbitrator in terms of the agreements between the parties. Vide notice dated 27.05.2009, respondents were requested to appoint their nominee arbitrator within 30 days of receipt of the said notice. Even after completion of the statutory period, respondents did not reply to the notice of the petitioners and did not nominate their arbitrator in terms of the agreement between the parties.

4. Hence, in these circumstances petitioners approached this Court in Arbitration Petition No. 289/2009 under Section 11 of the Act for appointment of an Arbitrator. Even though as per the specific clause of the agreements between the parties there was provision for an arbitral tribunal of three members, the parties agreed for appointment of a sole arbitrator before this Court. Thus, with the consent of the parties vide order dated 12.05.2010, this Court appointed a retired High Court judge as the sole arbitrator to adjudicate disputes between the parties.

5. Both the parties appeared before the learned sole arbitrator and filed their respective pleadings. After completion of the pleadings, evidence of the parties was concluded on 26.03.2015. The matter was posted for final arguments on 24.08.2015. At that stage, the learned sole arbitrator vide order dated 27.07.2015 recused himself from adjudicating the matter due to personal reasons. Learned arbitrator sent the said order dated 27.07.2015 thereby recusing himself by email to the respective parties on the same date, i.e., 27.07.2015.

6. It is the case of the petitioner that due to some technical default, the email account of the petitioner was not fully operational for almost a week. Hence, the said mail was not within the knowledge of the counsel for the petitioner. The petitioner's counsel could access her mail account by the second week of August, 2015 only when she noticed the mail by learned arbitrator and immediately intimated the petitioner accordingly. In the present circumstances, petitioner has approached this Court for appointment/substitution of another sole arbitrator to adjudicate the disputes between the parties.

7. The present petition is accompanied with an application, I.A. No. 13048/2018 under Section 5 of the L

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