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2022 Supreme(Ker) 405

IN THE HIGH COURT OF KERALA AT ERNAKULAM
SATHISH NINAN, J.
M/s Flemingo Duty Free Shop Private Ltd - Petitioner
Versus
Airports Authority of India, Represented By Its Airport Director - Respondent
Arbitration Petition No.1 of 2021
Decided On : 28-06-2022

Advocates Appeared:
For the Petitioner: G. Harikumar (Gopinathan Nair), Akhil Suresh, Jayaprakash P. Sen (SR.).
For the Respondent: S. Sujin, V. Santharam, N.N. Sugunapalan (SR.)

Point of Law: Section 29A of Act is intended to sensitize parties as also the Arbitral Tribunal to aim for culmination of arbitration proceedings expeditiously. It is with this legislative intent, Section 29A was introduced in Act by way of Arbitration and Conciliation (Amendment) Act, 2015.

Headnote:

Arbitration and Conciliation Act, 1996 - Section 29A (1) and (3) - Business of operation of duty free shops - Arbitration Petition - Seeking an order for extension of period of arbitration on substitution of Arbitrator - petitioner is engaged in business of operation of duty free shops at various airports in Kerala. There arose disputes between the parties, which lead to conduct of arbitration proceedings as provided for in the agreement between them - petitioner is not entitled to seek for substitution alleging bias against the Arbitrator in this proceedings, and in the light of the stand adopted by the petitioner as noticed above, the question of consideration of extension of time for completion of the arbitral proceedings under Section 29A does not arise. (Para 15)

Finding of the court: There is a stark difference between the two. This fortifies the view that the request for substitution of an Arbitrator alleging bias will not come within the scope of substitution under Section 29A(6) of the Act - The pleadings were completed on 14.09.2017. The one year period and the extendable period of six months are over as early. There is no dispute between the parties that, if time is not extended in terms of Section 29A(4), the mandate of the Arbitrator has terminated.

Result: Arbitration Petition is ordered.

ORDER :

The Arbitration Petition is filed seeking an order for extension of period of arbitration on substitution of Arbitrator.

2. The reliefs claimed in the Arbitration Petition reads thus:-

    “(a) Declare that the mandate of the Arbitral Tribunal presided by the Learned Sole Arbitrator A.K. Singhhal stands terminated in the arbitration matter of Flemingo Duty free Shop Private Limited vs. Airports Authority of India.

(b) Appoint a Sole Arbitrator in place of Learned Sole Arbitrator A.K. Singhal for continuation of the arbitration matter of Flemingo Duty free Shop Private Limited v. Airports Authority of India.

(c) Extend the time for completion of the arbitration proceedings in the arbitration matter of Flemingo Duty free Shop Private Limited vs. Airports Authority of India by a period of six months from the date of appointment of the new Sole Arbitrator.

(d) Grant the cost of the Application to the petitioner; and

(e) grant such other reliefs as may be deemed fit, just, proper and necessary in the facts and circumstances of the case.”

3. The petitioner is engaged in the business of operation of duty free shops at various airports in Kerala. There arose disputes between the parties, which lead to conduct of arbitration proceedings as provided for in the agreement between them. The sole Arbitrator was appointed on 25.01.2016. The pleadings were complete on 14.09.2017. The period for completion of arbitration as provided under Section 29A (1) and (3) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act”) expired. Even after the expiry of the term, the proceedings continued but, is not completed. Now the petitioner alleges bias on the part of the Arbitrator. The petitioner has approached this Court seeking substitution of the Arbitrator and for extension of the period in terms of Section 29A (6) and (4) respectively, of the Act. The respondent opposes the prayer. The allegation of bias are denied. The jurisdiction of this Court to entertain an application under Section 29A is also challenged.

4. Heard the learned Senior Counsel Sri. J.P. Sen on behalf of the petitioner and learned Senior Counsel Sri. N.N. Sugunapalan, on behalf of the respondent.

5. The respondent raised a preliminary objection regarding the jurisdiction of the High Court to entertain a petition under Section 29 A of the Act. Under Section 29 A, power is conferred on the “Court”, and Section 2(e) defines “Court” as, principal Civil Court of original jurisdiction. Therefore, only the District Court has the jurisdiction, is the contention. Such contention has already been negatived by a Division Bench of this Court in Lots Shipping Company Limited v. Cochin Port Trust [2020 (2) KLT 907]. The Division Bench held thus:-

    “11. Taking note of the principle enunciated herein above and on the basis of the detailed analysis, we are inclined to hold that the term “court” used in Section 29(4) has to be given an contextual and purposive interpretation, which is to be in variance with the meaning conferred to the said term under Section 2(1)(e) (i) of the Act. The term “court” contained in Section 29(4) has to be interpreted as the 'Supreme Court' in the case of international commercial arbitrations and as the 'High Court' in the case of domestic arbitrations. Hence it is held that, either of the party will be at liberty to file an arbitration petition before the High Court under Section 29A(5) of the Act, seeking extension of time for continuance of the arbitration proceedings in exercise of the power conferred under Section 29A(4) of the Act, in the case of any domestic arbitration. The reference is answered accordingly.”

Therefore, the challenge against jurisdiction is liable to be rejected and I do so.

6. Whether allegation of bias could be a ground for substitution of Arbitrator under Section 29A(6), is the issue for determination.

7. For challenging an Arbitrator on the ground of bias, there is a specific provision in the Act viz. Section 12. Sections 1

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