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IN THE HIGH COURT OF KERALA AT ERNAKULAM
Murali Purushothaman, J.
Hiran Valiiyakkil Lal, S/O Heeralal Balaraman And Ors. – Petitioners
Versus
Vineeth M.V, S/o Viswanathan and ors.– Respondents
OP(ATE) NO. 11 of 2023
Decided On : 13-07-2023
Arbitration and Conciliation Act, 1996 - Section 29 A, (4), (1), (3), 23 (4) - Sole Arbitrator - Order extending period of arbitration - Petition is filed by petitioners who are respondents before sole Arbitrator, seeking an order extending period of arbitration for six months – Proceedings got delayed not for reasons attributable to Arbitrator, but due to various interlocutory applications arbitral tribunal was called upon to consider - Para 13.
Finding of the Court :
Evidence in arbitration has been completed and final hearing has commenced and proceedings got delayed not for reasons attributable to Arbitrator, but due to various interlocutory applications arbitral tribunal was called upon to consider, adjournments sought for by parties and situation brought out by Covid-19 pandemic - It is also not disputed by respondents/claimants that learned Arbitrator also requested parties to approach Court for extension of time for completion of arbitration - This Court, therefore, finds sufficient cause, to extend period for making arbitral award - Accordingly, mandate of Arbitrator is revived and extended.
Result: Petition is disposed of.
JUDGMENT :
This Original Petition (Arbitration Time Extension) is filed by the petitioners who are the respondents before the sole Arbitrator, seeking an order extending the period of the arbitration for six months.
2. Disputes having arisen between the petitioners and the respondents herein relating to and touching upon the terms of an LLP agreement executed between them, the respondents invoked the arbitration clause in the agreement, but the petitioners moved the arbitration request for appointment of a sole Arbitrator to resolve the disputes between them. This Court, by Ext. P1 order dated 06.10.2021 in AR No. 83 of 2021, appointed Mr. Justice A.M. Shaffique, a retired Judge of this Court, as the sole Arbitrator. The Arbitrator entered upon the reference on 01.11.2021. The respondents herein, filed claim statement before the Arbitrator on 22.11.2021 and the petitioners herein filed a counter claim (Ext. P6) on 24.01.2022. On 01.04.2022, the respondents/claimants filed statement of defence to the counter claim. The respondents/claimants sought for amendment of the claim statement and the same was permitted by the Arbitrator by Ext. P3 order dated 25.08.2022 on limited issues.
3. The petitioners state that, after the evidence was closed, the Arbitrator posted the matter for final hearing on 20.05.2023 and on the said day, the learned Arbitrator informed the counsel for parties that since the tenure of the Arbitrator has expired, a joint petition may be filed to continue the proceedings as further time would be required to make an award. However, the respondents/claimants filed Ext. P4 statement before the Arbitrator to record that the mandate of the Arbitrator stands terminated on expiry of 12 months from 01.04.2022.
4. 01.04.2022 is the date on which the respondents/claimants filed their statement of defence to the counter claim. It is the stand of the respondents/claimants that, by operation of Section 29 A (4) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act' for short), the mandate of the Arbitrator stands terminated on expiry of 12 months from 01.04.2022. The petitioners filed Ext. P5 counter statement to Ext. P4 stating that the time limit for arbitral award under Section 29A(1) read with Section 23 (4) has to be counted from 25.08.2022, the date of allowing the application to amend the claim statement and that the application to record termination of mandate is to delay the finalisation of the arbitration proceedings.
5. The petitioners state that the final hearing of the arbitral proceedings has already commenced after 34 hearing dates, during which period multiple interlocutory applications were disposed of and even after 01.04.2023, the proceedings continued, in which both parties participated and there is a deemed acceptance of the continued arbitration. It is contended by the petitioners that they have filed Ext. P6 counter claim which needs to be agitated and completed, or else, they would be put to grave loss. Accordingly, the petitioners seek appropriate orders extending the period of the arbitration for six months to consider and pass orders on their counter claim.
6. Upon notice from this Court, the respondents/claimants have entered appearance through counsel and filed a reply affidavit wherein they have referred to the proceedings before the Arbitrator in detail and stating that they have approached this Court by filing WP(c) No.15898 of 2023 for direction to the National Company Law Tribunal, Cochin Bench, to consider their petition for winding up and dissolution of the LL.P and to call for the records from the arbitrator and to consider all disputes in the said proceedings.
7. Heard Sri. Santhosh Mathew, the learned counsel for the petitioners and Sri. P.R. Shaji, the learned counsel for the respondents/claimants.
8. Sri. Santhosh Mathew submits that since the learned Arbitrator is of the view that the tenure of the Tribunal has expired, he is not canvasing for the position that
Sub-section (4) of Section 29A deals with cases where award is not made within a period of twelve months from date of completion of pleadings.
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