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2024 Supreme(Online)(DEL) 32106
HIGH COURT OF DELHI
Manmeet Pritam Singh Arora, J
RAILTEL CORPORATION OF INDIA LIMITED – Appellant
Versus
PRIMATEL FIBCOM LIMITED – Respondent
ARB. A. (COMM.)-63/2024
The dismissal of an application for condonation of delay in arbitration proceedings does not constitute a refusal to exercise jurisdiction, making it non-appealable under Section 37(2)(a) of the Act.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 16, 19, 34, and 37(2)(a) - Appeal against procedural order - Appellant challenged the dismissal of its application for condonation of delay in filing a Counter-Claim - The Sole Arbitrator rejected the application, stating it was belated and the matter was ripe for final arguments - The Court found no merit in the appeal as the order did not amount to a refusal to exercise jurisdiction, and the appellant could initiate separate proceedings for its Counter-Claim. (Paras 8.1, 8.10, 10.3)
Facts of the case:
The Appellant had filed an appeal against the Sole Arbitrator's order dismissing its second application for condonation of delay in filing a Counter-Claim, which was submitted after the final arguments had commenced. (Paras 2.3, 3.8)
Findings of Court:
The appeal under Section 37(2)(a) was not maintainable as the Sole Arbitrator exercised jurisdiction in rejecting the application, and the procedural order was not appealable under Section 34. (Paras 8.11, 10.1)
Issues: The main issues were whether the impugned order could be challenged under Section 37(2)(a) and whether the dismissal of the Counter-Claim constituted an interim award. (Paras 7(a), 7(b))
Ratio Decidendi: The Court ruled that the rejection of the application for condonation of delay did not amount to a refusal to exercise jurisdiction, and thus the appeal was not maintainable under Section 37(2)(a). The appellant retains the right to pursue its Counter-Claim through separate arbitration. (Paras 8.10, 10.3)
Result: Appeal dismissed.
J U D G M E N T
MANMEET PRITAM SINGH ARORA, J:
1. The present appeal has been filed under Section 37(2)(a) of the Arbitration and Conciliation Act, 1996 (‘the Act of 1996’) impugning the ‘procedural order no. 5’ dated 18.11.2024 (‘impugned order’) passed by the learned Sole Arbitrator in Case Ref No. DIAC/8149/04-24.
2. In the impugned order the learned Sole Arbitrator dealt with two (2) applications filed by the Appellant herein (i.e., respondent in the arbitral proceedings) on 11.11.2024.
2.1 The first application was filed by the Appellant praying for fixation of a procedure and schedule to be followed by the parties. In this application, the Appellant prayed for leading oral evidence and stated that the issues cannot be decided on the basis of documents alone.
2.2 The second application was filed by the Appellant under Section 5 of the Limitation Act, 1963 for condonation of delay in filing its Counter-Claim and for taking on record the Counter-Claim filed along with the application.
2.3 The learned Sole Arbitrator disallowed the first application on the ground that the timeline of the proceedings to be followed by the parties has already been decided through various consent orders passed by him and that no new procedure can be established at the stage of final hearing. The rejection of the first application is not a subject matter of challenge in the present appeal.
2.4 The second application has been dismissed by the learned Sole Arbitrator on the ground that the Counter-Claim sought to be brought on record is filed at a belated stage when the Statement of Claim (‘SOC’), Statement of Defence (‘SOD’) and Rejoinder has already been filed and the matter is listed for addressing final arguments. The operative portion of the impugned order reads as under:
“1. Today the case was fixed for final arguments but Mr. Manish Vashisht, Sr. Ld. Counsel for the respondent is not available. However, he has sent his junior Mr. Jaivardhan Jeph, Advocate who came late by half an hour.
2. The Ld. Counsel for the respondent Mr. Jaivardhan Jeph has drawn the attention to respondent's applications which were sent only on email and no hard copy was supplied. …
6. The second application moved by the Ld. Counsel for the respondent pertains to counter claim along with the prayer for condonation of delay.
7. When the case is ripe for the final hearing after receiving the Statement of Claim, Statement of Defence and Rejoinder, so this belated application has no merit and dismissed.
8. With the consent of both the parties , case is adjourned to 10.12.2024 to 13.12.2024 at 2.00 p.m. till 5.30 p.m. on all the dates physically at DIAC. On the request of Ld. Counsel for the Respondent, the dates fixed for 19th and 20th November, 2024 are hereby cancelled.” (Emphasis supplied)
Brief facts leading to the initiation of the present proceedings
3. With the execution of the ‘definitive agreement’ dated 27.02.2018 between the Appellant and the Respondent herein the Respondent was selected as a System Integrator and Implementation Partner under a back-to- back payment structure with ‘M/S Raj COMP Info Services Limited (RISL)’ i.e., the end customer on behalf of the Appellant.
3.1 The said end customer raised issues with respect to the deficiencies in the services rendered by the Respondent and consequently stopped payments towards invoices raised by the Appellant.
3.2 Thereafter the Respondent invoked the arbitration agreement and Dr. Justice Satish Chandra, former Judge of Allahabad High Court was appointed as the Sole Arbitrator by this Court vide order dated 14.03.2024 passed in ARB.P. 364/2024.
3.3 The learned Sole Arbitrator passed ‘procedural order no. 1’ dated 13.05.2024 whereby with the consent of the parties the date of filing of SOC 1 ,
SOD 2 /Counter Claim and Rejoinder was fixed as 15.06.2024, 14.07.2024 and 21.07.2024 respectively.
3.4 On the next date of hearing i.e., 30.07.2024 counsel for the Appellant herein sought further time of three (3) weeks to file S
