The Supreme Court in M/s Shree Vishnu Constructions v. The Engineer in Chief Military Engineering Service Service And Ors. on looking at the statements of pending applications sent by various High Courts observed that there are a number of applications under Sections 11(5) and 11(6) of the Arbitration Act are pending for more than one year. In fact, in many High Courts, applications for appointment of the arbitrator(s) are pending for more than four to five years. Even, in the statement of High Court Rajasthan at Jodhpur, many applications are pending, which are found to be defective. Some of the defective applications are pending since 2016 onwards. Pendency of a large number of applications under Section 11(5) and 11(6) of the Arbitration Act, shows a very sorry state of affairs.
The Court observed that this would render the objective of Alternative Dispute Resolution methods useless, and therefore, remarked that “The arbitration proceedings under the Arbitration and Conciliation Act are said to be a part of the Alternative Dispute Resolution System. Having found that it takes a number of years in deciding and disposing of suits by the civil courts for a variety of reasons and with a view to see that the Commercial disputes are decided and disposed of and resolved at the earliest, the Arbitration and Conciliation Act has been enacted and hence, the Arbitration proceedings have been accepted as an effective Alternative Dispute Resolution Mechanism. Therefore, if the arbitrators are not appointed at the earliest and the applications under Sections 11(5) and 11(6) of the Arbitration Act are kept pending for a number of years, it will defeat the object and purpose of the enactment of the Arbitration Act and it may lose the significance of an effective Alternative Dispute Resolution Mechanism.”
The Court held requested the Chief Justices of all the High Courts to ensure that all pending applications under Sections 11(5) and 11(6) of the Arbitration Act and/or any other applications either for substitution of the arbitrator and/or change of arbitrator, which are pending for more than one year from the date of filing, must be decided within six months from the date of the decision. It also directed the Registrar General(s) of the respective High Courts to submit the compliance report on completion of six months from the date of the order.