IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
SUVIR SEHGAL
Harshbir Singh Pannu – Appellant
Versus
Jaswinder Singh – Respondent
Based on the provided legal document, the key points are as follows:
The petition was filed under Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of an Arbitrator due to disputes arising from a partnership deed and subsequent disagreements between the parties (!) .
The dispute involved a partnership deed and the establishment of a firm and hospital, with subsequent dissolution and arbitration proceedings initiated by the court's appointment of a former judge as Arbitrator (!) .
The Arbitrator terminated the proceedings due to non-payment of arbitral fees by the parties, which was in accordance with the provisions of the Arbitration Act, specifically Section 38(2), which allows proceedings to be suspended or terminated if parties fail to deposit the required costs (!) (!) .
The Arbitrator's order for termination was challenged, but the court upheld that the termination of arbitral proceedings does not equate to the termination of the Arbitrator's mandate. The mandate of the Arbitrator is distinct from the proceedings themselves, and once proceedings are terminated, a fresh appointment of an Arbitrator is not permissible without reviving the previous proceedings (!) (!) .
The court emphasized that the remedy for parties in such cases is to approach the Arbitral Tribunal for recall or revival of the proceedings, not to seek a new appointment under Section 11, especially when proceedings have been terminated under Section 38 due to non-cooperation or non-payment of fees (!) .
The court noted that the arbitration proceedings can be terminated under Section 32 of the Arbitration Act either by a final award, withdrawal, agreement, or when continuation becomes impossible or unnecessary. Termination of proceedings does not automatically mean the Arbitrator's mandate is terminated; the mandate ends only if the Arbitrator withdraws or resigns, not merely because proceedings are halted (!) (!) .
The court clarified that once proceedings are terminated, the mandate of the Arbitrator is also terminated, and a new appointment cannot be made unless the proceedings are revived. The proper recourse is to challenge the legality of the termination order or seek its recall (!) .
The court also observed that the petitioners had previously approached the court for appointment of an Arbitrator based on legal notices served earlier. Since an Arbitrator was already appointed, further petitions for appointment under Section 11 are not maintainable if the proceedings have been terminated or are ongoing, and the same legal notices cannot be used to initiate multiple proceedings (!) (!) .
Ultimately, the court dismissed the petition, affirming that the proper course of action after proceedings are terminated is to seek revival or challenge the order, not to file a new petition for appointment of an Arbitrator (!) (!) .
The court acknowledged the assistance of the Amicus Curiae and disposed of pending applications accordingly (!) (!) .
In summary, the court underscored the importance of procedural adherence in arbitration, clarified the distinction between termination of proceedings and termination of the Arbitrator's mandate, and emphasized the appropriate remedies available to parties in such circumstances.
JUDGMENT :
SUVIR SEHGAL, J.
1. This petition has been filed under Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996 (for short “the Arbitration Act”) for appointment of an Arbitrator.
2. In a nutshell, facts leading to the filing of the petition are that the petitioners and the respondent entered into a partnership vide deed dated 12.03.2014, Annexure P-1, and a firm by the name of M/s Amritsar Health and Hospitality Services was constituted. A Super Specialty Cardiac Hospital, namely, Holy Heart Hospital, was established at Amritsar in furtherance of the agreement between the parties. A dispute arose between the parties and the respondent filed a petition under Section 9 of the Arbitration Act for restraining the petitioners from revoking the partnership deed, which was withdrawn from the Court of learned Additional District Judge, Amritsar on 22.05.2018, Annexure P-3. A company, Amritsar Health and Hospitality Services Private Limited, was incorporated on 13.11.2017, Annexure P-4, to take over the business of the partnership firm. Differences arose between the parties, which could not be resolved and vide notice dated 13.06.2018, petitioners dissolved the firm. On
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