IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
AKIL KURESHI, J.
Nilesh Ramanbhai Patel - Appellant
Versus
Bhanubhai Ramanbhai Patel - Respondent
Misc. Civil Application (OJ) No. 1 of 2018 IN R/Petn. Under Arbitration Act No. 56 of 2016
Decided On : 14-09-2018
Arbitration and Conciliation Act, 1996 – Section 2(1)(e),29A(4),11 – Seeking application for extension of time for completing arbitration – Held, Contents of application for extension of time for completing arbitration – Sufficient explanation is granted for exercising such powers. Detailed stages through which arbitration proceeded have been set out – Court not see any lack of urgency on part of claimants or applicants. time which lapsed after initial period of twelve months would be more on account of legal issues which emerged concerning extension of time of completing arbitration – Such period cannot be attributed either to arbitrator or parties keenly wish that efforts put in so far before arbitrator are not lost and arbitration be completed with passing of award – Application is disposed of – [Para 19 &20]
Facts of the case:
Seeking application for extension of time for completing arbitration.
Findings of the court:
Contents of application for extension of time for completing arbitration – Sufficient explanation is granted for exercising such powers. Detailed stages through which arbitration proceeded have been set out – Court not see any lack of urgency on part of claimants or applicants time which lapsed after initial period of twelve months would be more on account of legal issues which emerged concerning extension of time of completing arbitration – Such period cannot be attributed either to arbitrator or parties who so keenly wish that efforts put in so far before arbitrator are not lost and that arbitration be completed with passing of award.
Result: Application disposed of
JUDGMENT :
1. This application is filed with a prayer to extend the mandate of the arbitrator and to extend the time for making the award by a period of eighteen months from 24.3.2018.
This application arises in the following facts:
2. One Bhanubhai Ramanbhai Patel and his sons had filed petition under Arbitration Act No.56 of 2016 seeking appointment of an arbitrator to resolve disputes between partners of a partnership firm constituted under a deed dated 19.2.2010. The partnership was engaged in the business of processing and selling processed tobacco and dealing in tobacco on commission under the name of M/s. Navdurga Tobacco Company. Respondents in such arbitration petition were his brother Nilesh Ramanbhai Patel, son of Nilesh Ramanbhai Patel and mother of Bhanubhai and Nileshbhai. By detailed judgment dated 10/17.2.2017 all the objections of the respondents against appointment of an arbitrator were turned down. By further order dated 17.3.2017 Shri J.M.Panchal, former Judge of Supreme Court was appointed as sole arbitrator. When such arbitral proceedings were going on, the original opponent No.3 i.e. the mother expired. Her legal heirs which included some of the existing parties to the arbitral proceedings and her daughters were therefore brought on record.
3. The arbitral proceedings could not be completed within twelve months from the date of constitution of the arbitral tribunal. Therefore the original claimants and original respondents No.1 and 2 applied to the arbitrator for extension of time for completion of the arbitration. Such time was extended by a period of six months. The daughters of deceased opponent No.3 however later on raised an objection before the arbitrator that such extension of time was without their consent and therefore not valid and that it must be held that the mandate of the arbitrator has come to an end. The arbitrator thereupon passed an order on 3.7.2018 holding that his mandate had come to an end. In his opinion the circumstances mentioned in subsection (4) of Section 29A of the Arbitration and Conciliation Act, 1996 ('the Act' for short) will come into operation. Accordingly, the mandate of the arbitrator stood terminated with effect from 24.3.2018. He recorded the request of the counsel for the claimants that liberty may be reserved to approach the Court for extension of the mandate of the arbitrator. The learned arbitrator did not find it necessary to grant any such liberty since subsection (4) of Section 29A of the Act specifically provides that the mandate of the arbitrator shall terminate, if the award is not made within the specified period, unless the Court has, either prior to or after the expiry of the period so specified, extended such period.
4. By this application, original opponents No.1 and 2 request that the mandate of the arbitrator may be extended by a period of eighteen months from inception i.e. 24.3.2018, when the initial period of twelve months came to an end. This application is supported by the original claimants, but strongly opposed by the daughters of original opponent No.3 primarily on the ground that this application is not competent before this Court. In their opinion, it is only the Court as defined under Section 2(1)(e) of the Act which could entertain such an application.
5. Appearing for the applicants, learned advocate Shri H. A. Dave submitted that the word ‘Court’ in the present context cannot be understood as referred in Section 2(1)(e) of the Act. This Court, having appointed an arbitrator the question of extending or not extending his mandate can only be decided by this Court. He submitted that by amending Section 11 of the Act the earlier reference to the Chief Justice or his designate has been replaced by the terms 'High Court' and 'Supreme Court'. Learned advocate Shri Vyas for the original claimants also adopted the same line of arguments.
6. Learned advocate Shri Abhishek Mehta for the objectors strongly contended that in view of the scheme of the Act
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