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Smart Summary

Factual and Procedural Background

This arbitration petition was filed under Section 29A of the Arbitration and Conciliation Act, 1996, seeking a six-month extension to complete arbitral proceedings and pass a final award. Initially, a petition under Section 9 was filed on 28 February 2017, followed by an order on 27 March 2017 wherein, by consent of both parties, the Arbitrator was agreed upon and a disclosure statement under Section 11(8) read with Section 12(2) was to be filed. The disclosure statement was filed on 30 March 2017, leading to the appointment of the Arbitrator by the Court with the parties' consent. Subsequently, on 7 April 2017, the Section 9 petition was converted into an application under Section 17 to be considered by the Arbitrator. The Arbitrator was informed of his appointment on 29 May 2017, which he received on 2 June 2017, and thereafter commenced arbitration proceedings. The arbitration has not concluded, and the parties had previously extended the time under Section 29-A(3), but that extension expired, prompting the present petition for further extension.

Legal Issues Presented

  1. Whether sufficient cause exists to grant an extension of time for completing arbitral proceedings and passing the final award under Section 29A of the Arbitration and Conciliation Act, 1996.
  2. Whether the delay in arbitration proceedings can be attributed to the petitioner or the Arbitrator.
  3. The applicability of precedents cited by the respondents regarding extension of time in arbitration proceedings.

Arguments of the Parties

Respondents' Arguments

  • No sufficient cause has been shown to justify the extension of time.
  • The Arbitrator's mandate terminated on 30 September 2018, considering the original appointment date and the prior extension under Section 29-A(3).
  • The petition for extension was filed two months after the mandate expired, making it impermissible.
  • Relied on Supreme Court decision in Balwant Singh v. Jagdish Singh [(2010) 8 SCC 685] and a High Court decision in Jahed Naziruddin v. State Of Maharashtra [2014 (2) Mh.LJ 933] to support their position.

Petitioner's Position (as inferred from Court's remarks)

  • The delay is not attributable to the petitioner or the Arbitrator.
  • The respondents have not filed their written statement before the Arbitrator despite directions and costs imposed.
  • The opposition appears to be a tactic to delay arbitration proceedings.
  • Sufficient cause for extension has been demonstrated in the petition.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Balwant Singh v. Jagdish Singh [(2010) 8 SCC 685] Principles regarding extension of time and mandate of arbitrator. Found inapplicable as it was not decided under Section 29A of the Arbitration Act but under Order XXII Rule 9 CPC and Section 5 Limitation Act.
Jahed Naziruddin v. State Of Maharashtra [2014 (2) Mh.LJ 933] Similar principles on extension and limitation in civil procedure context. Deemed irrelevant to the present case as it did not concern Section 29A of the Arbitration Act.

Court's Reasoning and Analysis

The Court observed that the delay in completing the arbitration proceedings could not be attributed to either the petitioner or the Arbitrator. It was noted that the respondents had not complied with directions to file their written statement before the Arbitrator despite being subject to costs, suggesting that their opposition was a frivolous attempt to delay the arbitration. The Court distinguished the precedents relied upon by the respondents, highlighting that those decisions were rendered under provisions of the Code of Civil Procedure and Limitation Act, not under Section 29A of the Arbitration and Conciliation Act, 1996, and therefore were not applicable. Considering these factors, the Court found sufficient cause to grant an extension of time for one year from the date of the order to complete the arbitration and pass the final award.

Holding and Implications

The arbitration petition is allowed and the time for completing the arbitral proceedings and passing the final award is extended by one year from the date of the order.

The respondents are directed to pay costs of Rs. 50,000 to the petitioner within four weeks, failing which the petitioner may recover the amount as arrears of land revenue. This decision directly affects the parties by permitting continuation of the arbitration proceedings with an extended timeline and penalizing the respondents for frivolous opposition. No new precedent is established beyond the application of Section 29A in the present factual context.

    L&T Housing Finance Ltd. v. Trishul Developers And Others

    B.P. Colabawalla, J.:— This arbitration petition has been filed under Section 29A of the Arbitration and Conciliation Act, 1996 for seeking an extension of time for a period of six months to complete the arbitral proceedings and pass a final award. The reason why this extension has been sought is given in great detail in the petition. It has been stated in the petition that initially a petition under Section 9 came to be filed on 28 February, 2017. Thereafter, on 27 March, 2017 an order was passed under Section 9, inter alia, under which by consent of both the parties, the name of the Arbitrator was agreed upon and the disclosure statement of the Arbitrator under Section 11(8) read with section 12(2) was to be filed before the Court. This disclosure statement was filed on 30 March, 2017 on which date the Arbitrator came to be appointed by this Court with the consent of both parties. Thereafter, in view of the fact that the Arbitrator was already appointed, on 7 April, 2017 this Court converted the petition that was filed under Section 9 as an application under Section 17 to be considered by the learned Arbitrator.

    2. Thereafter, on 29 May, 2017 the Arbitrator was intimated by the petitioner about his appointment and which intimation was received by the Arbitrator on 2 June, 2017. This is how the Arbitrator thereupon entered upon the reference and started the arbitration proceedings. It appears that the arbitration proceedings have not yet come to an end and in fact the parties before the Arbitrator also extended the time as contemplated under Section 29-A(3) of the said Act. That mandate has also been expired and hence the present petition.

    3. The learned Advocate appearing on behalf of the respondents has opposed this petition on the ground that no sufficient cause has been made out for granting extension of time. According to the learned Advocate, the Arbitrator was appointed on 30 March, 2017 and even if one takes into consideration, the extension as contemplated under Section 29-A(3) of the said Act, the mandate of the Arbitrator stands terminated on 30 September, 2018 and this petition has been filed two months later seeking extension of time. This being the case, the learned Advocate appearing on behalf of the respondent submitted that there was no sufficient cause made out and hence the petition be dismissed. In support of this proposition, the learned advocate relied upon a decision of the Supreme Court in the case of Balwant Singh v. Jagdish Singh [(2010) 8 SCC 685] and a judgment of this Court in the case of Jahed Naziruddin v. State Of Maharashtra [2014 (2) Mh.LJ 933].

    4. I find the opposition of the respondents to be wholly frivolous. From the dates as mentioned above, the delay in completing arbitration proceedings cannot be attributed either to the petitioner or to the learned Arbitrator. In fact, it has been brought to my notice that the respondents, though directed and subject to payment of costs, have not even filed their written statement before the learned Atrbitrator. I find that this opposition at least prima facie, appears to be made to delay to the arbitration proceedings.

    5. As far as the decisions relied upon by the learned counsel appearing on behalf of the respondents are concerned, I find that the same are wholly inapplicable to the facts of the present case. Firstly, as mentioned earlier, sufficient cause has been made out in the petition for granting the extension of time. Secondly, even otherwise these decisions were not rendered in the context of Section 29A of the Arbitration and Conciliation Act, 1996, but under Order XXII Rule 9 of the Code of Civil Procedure and Section 5 of the Limitation Act, 1963. This being the case, I find that these decisions are absolutely of no assistance to the respondents.

    6. Considering the overall facts of the case and especially considering that the written statement has not been filed before the learned Arbitrator, I think this is a fit case to extend the time to complete the arbitration proceedings and pass a final award for a period of one year from today. It is so ordered.

    7. Since the objection taken by the respondents is found to be wholly frivolous, the respondents are directed to pay costs of Rs. 50,000/- (Rupees Fifty Thousand) to the petitioner within a period of four weeks from today. If the same are not paid, the petitioner is at liberty to recover the same as an arrears of land revenue.

    8. The Arbitration Petition is accordingly disposed of.

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    L&T Housing Finance Ltd. v. Trishul Developers And Others
    (Dec 10, 2018)