Orders under Section 25(a) of the Arbitration Act terminating proceedings for non-compliance are procedural and do not constitute an 'award'; thus petitions for continuation are maintainable upon compliance.

JASMEET SINGH, J (ORAL)

1. These are petitions filed under Section 14 and 15 of the Arbitration and Conciliation Act, 1996 seeking the seeking substitution and/or appointment of an Arbitrator and/ or pass an order enabling the Arbitrator to continue proceedings.

2. The brief facts are that the projects relating to erection, testing, commissioning and handover of steam turbine & generator auxiliaries for various Thermal Power Projects were awarded to GE Power Systems India Pvt. Ltd. (“respondent”).

3. The respondent then further invited bids for subcontracting of Erection. and Commissioning of Mechanical & Erection Packages for the said projects. The petitioner submitted its bid which was thereby accepted by the respondent herein vide a Letter of Award. Accordingly, the work was subcontracted to the petitioner herein and the respondent herein issued a purchase order in favour of the petitioner dated 07.08.2020, 10.06.2019, 02.04.2019 respectively.

4. Since there were delays in completion of work, a notice of termination issued by the respondent dated 29.08.2022, 26.07.2022, 06.03.2023. The petitioner initially filed petitions under Section 9 of 1996 Act at District Court in Vijaywada and subsequently before this Court being OMP(I)(COMM) 6/2024, OMP(I)(COMM) 7/2024 and OMP(I)(COMM) 8/2024 seeking a direction to restrain the respondents from encashing the subject bank guarantees.

5. Subsequently, this Court vide Order dated 08.01.2024, disposed the said petitions with the direction that the respondent shall be entitled to receive pay outs by way of invocation of the bank guarantees but keep the amounts in FDRs and was further pleased to appoint the Arbitrator to adjudicate the disputes between the parties. The Arbitrator entered reference.

6. The Arbitrator vide Order 18.11.2024, was pleased to close the arbitration proceedings, since the petitioner had not filed its statement of claims and not paid portion of the arbitral fee under Section 25 (a) of the Arbitration and Conciliation Act, 1996 . The said Order is the genesis of the present petition. The operative portion reads as under:-

“7. The Arbitrator has duly considered the matter. In absence of SOC for such long time and in absence of compliance of direction regarding fee, the Arbitrator is unable to proceed and is constrained to close the proceedings subject to window of opportunity for compliance being availed. The fee already paid (total Rs. 15 lacs by both the parties) stands appropriated towards fee for the proceedings so far in four sittings.

8. Accordingly, proceedings will stand closed under section 25(a) of the Arbitration and Conciliation Act, 1996 subject to the window of further opportunity for compliance in next one month. If compliance is done in terms of deposit of fee and filing of SOC, date for further hearing will be fixed.”

7. Thereafter, the Arbitrator passed another dated 18.12.2024, where the Arbitrator was pleased to observe that the Arbitrator was open to hearing the parties in case they promptly comply with the earlier directions. The operative portion reads as under:-

“4. The Arbitrator has today received two Emails from Mr. Prasada Rao P, on behalf of Mecwel. In first, he has stated that he would deposit fee by 20.12.24 and file requisite pleadings by 25.01.25. On that basis, prayer is that proceedings be continued and date be fixed. Second email forwards SOC in one of the cases (in other two SOCs have already been filed) and other documents in other two cases.

5. Considering the above, the Arbitrator is open to consider the matter further, after hearing the parties, if the parties promptly comply with the earlier directi