Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2020 Supreme(Guj) 930

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
VIKRAM NATH, J.B. PARDIWALA, JJ.
Narmada Clean-Tech and Others – Appellants
Versus
Indian Council of Arbitration and Others – Respondents
Letters Patent Appeal No. 308 of 2020, Special Civil Application No. 18097 of 2017, Civil Application (for Stay) No. 1 of 2020
Decided On : 30-07-2020

Advocates:
Advocate Appeared:
For the Appellants : Mr. Kamal Trivedi, Mr. Abhishek M. Mehta.
For the Respondent: Mr. Chirag K. Sukhwani.

Point of Law: Arbitration –Writ petition against the order passed during Arbitration proceedings – held, maintainable.

Headnote:
Constitution of India, 1950 - Articles 226, 227 , 136(1) and 12 - Civil Procedure Code,1908 - Sections 115 and 9 - Arbitration and Conciliation Act, 1996 - Sections 16, 11(6), 37, 2 and 9 –Termination of the arbitration proceedings – Award to be made as per Rule 63 – Extension of time – Order passed during Arbitration proceedings – Supervisory jurisdiction of the High Court – Writ petition – Held, maintainable.
Facts of the Case:
Single Judge rejected the writ application preferred by the appellant herein on the ground that the same is not maintainable in law as it seeks to challenge an order passed by an Arbitrator rejecting the application preferred by the appellant herein under Section 16 of the Arbitration and Conciliation Act, 1996.
Finding of the Court:
Learned Single Judge rejected the petition without entering into the merits of the matter only on the ground that the order passed during the course of the arbitration proceedings cannot be challenged under Articles 226 21 and/or 227 of the Constitution of India and it would be open for both the sides to raise all the contentions on merits before appropriate forum in appropriate proceedings at an appropriate time in accordance with law -it difficult to agree with the learned Single Judge - It would have been altogether a different matter if the learned Single Judge would have said that having regard to the nature of the order passed by the Arbitral Tribunal, no case is made out for interference. The learned Single Judge is very clear in his mind. The learned Single Judge says that His Lordship has not gone into the merits of the order passed by the Arbitral Tribunal as no order passed by the Arbitral Tribunal can be questioned before the High Court either under Article 226 or 227 of the Constitution as the petition itself is not maintainable- Learned Single Judge saying so held that the petitions were not maintainable in law. – Writ application could be said to be maintainable against the order passed by the Arbitral Tribunal, we could have quashed the order passed by the learned Single Judge and remitted the matter to the learned Single Judge. However, instead of remitting the matter, this Court itself would like to hear the learned Senior Counsel appearing for the appellant on the merits of the impugned order passed by the Arbitral Tribunal.
Result: Matter posted for hearing

JUDGMENT :

J.B. PARDIWALA, J.

1. This appeal under Clause 15 of the Letters Patent Act is at the instance of an unsuccessful writ applicant and is directed against the judgment and order passed by a learned Single Judge of this Court dated 18th May 2020 in the Special Civil Application No. 18097 of 2017, by which, the learned Single Judge rejected the writ application preferred by the appellant herein on the ground that the same is not maintainable in law as it seeks to challenge an order passed by an Arbitrator rejecting the application preferred by the appellant herein under Section 16 of the Arbitration and Conciliation Act, 1996 (for short “the Act, 1996”).

2. The facts giving rise to this appeal may be summarised as under:

2.1 The appellant herein came before the learned Single Judge by filing the Special Civil Application No. 18097 of 2017 seeking the following reliefs:

“(A) Your Lordships may be pleased to issue a writ of mandamus or any other appropriate writ or writ in the nature of oertiorari or any other appropriate writ order or direction, quashing and setting aside the order I Minutes of Meeting (MOM) dated 1.10.2017 of the respondent No. 2 and further be pleased to hold that the respondent No. 2 has no jurisdiction to conduct the hearing of the proceedings being Case No. AC-1903.

(B) Your Lordships may be pleased to issue a writ of mandamus or any other appropriate writ or writ in the nature of certiorari or any other appropriate writ, order or direction, issuing appropriate directions to the respondent No. 1 to undertake the procedure as contemplated under Ruled 27 of the ICA Rules in connection with Case No. AC 1903.

(C) Pending hearing and final disposal of the captioned writ petition, Your Lordships may be pleased to stay further arbitration proceedings of Case No. AC-1903 conducted by the respondent No. 2 between the respondent No. 3 and the petitioner arising out of the contract between the parties and restrain the respondent No. 2 from proceeding any further in the arbitration proceedings which are subject matter of the present petition.

(D) Ad-interim relief in terms of Para 10 (D) be granted by this Hon’ble Court.

(E) Any other and further orders that are deemed necessary in the interests of justice may be passed.”

3. We need not delve much into the facts of this litigation as the controversy is in a narrow compass. The appellant herein is in a litigation before an Arbitral Tribunal. The appellant is a respondent before the Arbitral Tribunal.

4. The appellant preferred an application dated 16.09.2017 before the Arbitral Tribunal seeking termination of the arbitration proceedings in terms of Rule 63 of the Indian Council of Arbitration (for short “the ICA Rules”).

5. The aforesaid application preferred by the appellant referred to above reads thus:

“Application seeking termination of the Arbitration proceedings in terms of Rule 63 of the ICA Rules.

MAY IT PLEASE THE HON’BLE ARBITRATOR

On behalf of the respondent above named, it is respectfully submitted as under:

1. That the Hon’ble Arbitrator was appointed by the Indian Council of Arbitration (“ICA” for short) for conducting the Arbitration proceedings between the parties.

2. That the Arbitral Tribunal while conducting the Arbitration Proceedings has been following the ICA Rules of Arbitration as per the arbitration clause between the parties.

3. That the Arbitral Tribunal seems to have entered into Reference in terms of Rule 38 on 2.1.2014 when the Procedural Order No. 1 was passed (Copy enclosed).

4. That the award was to be made as per Rule 63 however the mandatory time period for making the award has already expired and the mandate of the Arbitrator has already terminated and the Arbitrator has become functus officio.

5. The language in Rule 63 of the ICA Rules clearly indicate that the award is to be made subject to ‘maximum limit of two years’ from the date on which the reference in terms of Rule 38 has been made and the same can be extended only after following the d

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2020 Supreme(Guj) 930

Point of Law: Arbitration –Writ petition against the order passed during Arbitration proceedings – held, maintainable.

Cases Referred (14)