Extension of Sole Arbitrator's mandate under the Arbitration Act requires sufficient cause, unaffected by procedural misconduct by arbitrator, especially when delays arise from the respondent's actions.

JUDGMENT

1. This is a petition filed under section 29A(4) read with 29A(5) of the Arbitration and Conciliation Act, 1996 (“the Act”), seeking extension of the mandate of the Sole Arbitrator for a period of one year for concluding the arbitral proceedings and passing the arbitral award.

FACTUAL MATRIX AS PER THE PETITIONER

2. The petitioner, namely NCC Limited, is a company having its registered office at Survey No. 64, Corporate Office, Madhapur, Hyderabad (500081), Telangana.

3. The respondent, namely Indian Oil Corporation Limited, is a Government of India undertaking having its registered office at G-9, Ali Yavar Jung Marg, Bandra (East), Mumbai (400050), Maharashtra.

4. The respondent floated a tender for “Civil, Structural & Associated UG piping works of VGO-HDT, DHDT & HCDS Units (EPCM-2)” for the Paradip Refinery Project (“the project”). The petitioner was declared as the successful bidder for the project and consequently, the parties entered into a formal Agreement dated 28.04.2010.

5. The Agreement between the party clearly designated the commencement date for the project as 03.03.2010 with scheduled completion date as 02.10.2011. However, the project was ultimately completed with delays on 28.12.2015. Subsequently, disputes arose regarding payments due under the terms of the contract.

6. The petitioner invoked the arbitration Agreement vide communication dated 01.07.2017. Upon failure of the parties to mutually agree on the constitution of the Arbitral Tribunal, the petitioner approached this Hon’ble Court by filing a petition under Section 11 of the Act.

7. This Court in a petition under Section 11 of the Act, vide judgment dated 08.02.2019 in NCC Limited v. Indian Oil Corporation Limited , 1(Arb.Pet.115/2018). rejected the objections raised by the respondent and appointed the Sole Arbitrator to adjudicate the disputes between the parties. The Sole Arbitrator entered reference and held its first hearing on 05.03.2019, directing completion of pleadings by 01.07.2019.

8. The respondent challenged the appointment of the Sole Arbitrator before the Hon’ble Supreme Court by way of a Special Leave Petition S.L.P. (C.) 13161/2019. Consequently, the Hon’ble Supreme Court vide orders dated 03.07.2019 and 18.07.2019, stayed further arbitral proceedings.

9. The respondent also preferred an Application under Section 16 of the Act challenging the jurisdiction of the Sole Arbitrator. The Hon’ble Supreme Court, vide judgment dated 20.07.2022 decided the Civil Appeal no. 341 of 2022 arising out of the aforesaid SLP, and dismissed the respondent’s appeal but directed the Sole Arbitrator to first adjudicate the pending Application regarding “accord and satisfaction” and arbitrability of the disputes within 3 months from the date of first sitting.

10. In pursuance of the aforesaid directions, the arbitral proceedings were resumed on 15.12.2022, wherein the Sole Arbitrator directed the parties to complete the pleadings with regards to the Section 16 Application by 15.02.2023. However, the timeline for deciding the Application was extended with the consent of parties by 5 months vide Procedural Order No. 3, and the said Application was ultimately dismissed vide Procedural Order No. 7 dated 16.08.2023. The respondent thereafter delayed filing its Statement of Defence (“SOD”) and ultimately filed the same on 30.04.2024, subject to costs.

11. The petitioner filed its rejoinder on 17.06.2024,