Back
2024 Supreme(Online)(KER) 14491
HIGH COURT OF KERALA
G. GIRISH, J
RAJU MATHEW – Appellant
Versus
MARY JOSE – Respondent
OP(ATE) 14/2024
The court established that an interim award passed within statutory time does not terminate the mandate of the Arbitrator despite subsequent stay orders.
Headnote:
Arbitration - Mandate of Arbitrator - Arbitration and Conciliation Act, 1996 - Sections 29A, 32 - Preliminary award passed; claimants' challenge rejected.
Fact of the Case:
The respondent sought a declaration regarding the non-termination of the Arbitrator's mandate and requested an extension for completing arbitral proceedings related to a dissolved partnership managing a hospital, amidst legal conflicts between the partners.
Finding of the Court:
The court upheld that the Arbitrator's mandate had not terminated and declared the extension of time for the award, emphasizing compliance with the statutory timelines hindered by the actions of the claimants.
Issues: Whether the mandate of the Arbitrator terminated as per the provisions of the Arbitration and Conciliation Act due to delays attributed to the claimants' actions.
Ratio Decidendi: The court concluded that the preliminary award constituted compliance with the time limit prescribed under Section 29A, and the Arbitrator's progress was in a context affected by the claimants' stay order.
Final Decision: The petition is allowed, and the Arbitrator's mandate is confirmed with an extension of time for a final award.
The respondent in the proceedings before the Arbitrator appointed by this Court, as per order dated 23.06.2022 in A.R.No.96 of 2018, has filed this petition for a declaration that the mandate of the sole Arbitrator has not terminated under Section 29A of the Arbitration and Conciliation Act, 1996 .
Another relief which has been sought for in this petition filed under the aforesaid provision is the extension of the time limit for the completion of arbitral proceedings for a further period of one year.
2. The pleadings in the aforesaid arbitration proceedings were completed on 18.03.2023. The dispute pertained to the running of a hospital by name Mount Sinai Hospital by the three partners, among whom the present petitioner is the respondent in the Arbitration Request moved by the other two partners as A.R.No.96 of 2018 before this Court. It is stated that the petitioners in A.R.No.96 of 2018, who are the claimants before the Arbitrator, had dissolved the partnership by a notice dated 10.09.2018. During the course of the arbitration proceedings, upon an application filed by the petitioner herein, the learned Arbitrator passed an injunction order restraining the claimants from carrying out the business of the firm in its name M/s Mount Sinai Hospital. There was also a direction to discharge the inpatients now under treatment in the said hospital within one month. The above order was later on modified upon an application filed by the petitioner herein, clarifying that the claimants shall not use, or allow anyone including their relatives to use the property of the firm for treating outpatients or for any other purpose.
The claimants (respondents herein) thereupon filed application under Section 32 (2) of the Act for termination of the arbitration proceedings stating the reason that they are withdrawing from their claim. Since the petitioner herein opposed the above request, the learned Arbitrator, as per order dated 09.08.2023 dismissed the above application of the claimants, and decided to proceed with the arbitration.
Thereafter, on 20.09.2023 the learned Arbitrator passed a preliminary award declaring the share of the claimants and the respondent in the partnership firm Mount Sinai Hospital, which stood dissolved on 10.09.2018. As per the above preliminary award, a Receiver was also appointed by the learned Arbitrator for taking possession of the movable and immovable assets and books of account of the firm. The claimants challenged the above preliminary award before the Commercial Court, Thodupuzha by filing O.P(Arbitration) No.3 of 2023. In an interim application filed in the aforesaid O.P as I.A.No.1 of 2023, the learned Sub Judge presiding the Commercial Court, Thodupuzha stayed the operation of the preliminary award dated 20.09.2023 of the learned Arbitrator.
The Commercial Court also passed an order in I.A.No.2 of 2023 calling for the records of arbitration from the learned Arbitrator. In the meanwhile, the statutory period of arbitration under Section 29A of the Arbitration and Conciliation Act expired on 17.03.2024. Thereupon, the claimants filed I.A.No.2 of 2024 before the Arbitrator under (4) of the Arbitration and Conciliation Act for closing the arbitration proceedings since the mandate of the Arbitral Tribunal stood terminated with effect from 17.03.2024 under Section 32 (3) read with of the said Act.
The learned Arbitrator dismissed the aforesaid application on 06.05.2024 with the observation that the mandate of the Arbitrator does not stand terminated since the interim award was passed on 20.09.2023, past six months from the completion of the pleadings. In the meanwhile, the petitioner herein, who is the respondent in the arbitration proceedings, filed this application on 01.04.2024.
3. The respondents appeared through their counsel and filed counter affidavit opposing the prayer of the petitioner. Throughout the above counter affidavit, the respondents attributed bias and partisan attitude upon the Arbitr
