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NEHA AVIATION MANAGEMENT PVT. LTD v. AIR INDIA SATS AIRPORT SERVICES PVT LTD.
Concise Summary of the Opinion (ARB.P. 546/2019)
Factual and Procedural Background
The court considered a petition that sought judicial intervention in an arbitration matter. The principal relief granted by the court was termination of the mandate of the then Sole Arbitrator, Mr. Vivek Kumar Tandon, Advocate, and the appointment of a new Sole Arbitrator with the consent of the parties. The court relied on a Supreme Court pronouncement regarding the effect of a clarificatory judgment on the mandate of an arbitrator to reach this conclusion. The petition was allowed and a pending application was disposed of in accordance with the order.
Legal Issues Presented
- Whether, in light of the cited Supreme Court authority, a clarificatory judgment invokes Section 14 of the Arbitration Act and thereby automatically terminates the mandate of an arbitrator de jure.
- Whether the mandate of the sitting Sole Arbitrator, Mr. Vivek Kumar Tandon, should be terminated.
- Whether, upon termination of the mandate, a new Sole Arbitrator should be appointed and, if so, on what terms (disclosure, fees, stage of proceedings to be adopted).
- Whether the petitioner’s claims are barred by limitation (the court left this question to be decided by the Arbitral Tribunal).
Arguments of the Parties
Ms. Rajesh
- She pointed out that the claims of the petitioner are barred by time (i.e., time‑barred / barred by limitation).
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Bharat Broadband Network Limited vs. United Telecoms Limited, (2019) 5 SCC 755 | As stated in the opinion: that as soon as a clarificatory judgment is pronounced, Section 14 of the Arbitration Act comes into play, automatically terminating the mandate of the arbitrator de jure. | The court applied this principle to conclude that the mandate of the sitting Sole Arbitrator should be terminated and that the petition therefore deserved to be allowed. |
| TRF Ltd. vs. Energo Engineering Projects Ltd., (2017) 8 SCC 377 | Referenced as contextual authority in relation to the legal discussion on clarificatory judgments (the opinion cites Bharat Broadband in the context of the TRF judgment). | The TRF judgment was referenced as context for the Supreme Court's statement adopted by the court in this case; the opinion does not elaborate further on any distinct application of TRF beyond being contextual. |
Court's Reasoning and Analysis
The court's reasoning proceeded from the cited Supreme Court authority. The opinion recounts that the Supreme Court, in Bharat Broadband (in the context of TRF), had clearly held that when a clarificatory judgment is pronounced, Section 14 of the Arbitration Act is triggered and the arbitrator's mandate automatically terminates de jure.
Relying on that pronouncement, the court concluded that the petition seeking termination of the existing arbitrator's mandate should be allowed. The court therefore terminated the mandate of Mr. Vivek Kumar Tandon, expressly noting that this termination was not a reflection on his competence.
With the parties' consent, the court appointed Mr. Justice Swatanter Kumar, former Judge of the Supreme Court, as the new Sole Arbitrator and recorded his contact details as part of the order. The court required the newly appointed Arbitrator to make the disclosure mandated by Section 12 of the Arbitration Act before entering upon the reference. The court further directed that the Arbitrator's fee would be fixed according to the Fourth Schedule of the Act, and that the newly appointed Arbitrator would commence proceedings from the stage of procedural hearing.
The court acknowledged a submission (by Ms. Rajesh) that the petitioner's claims are time‑barred but deliberately left the question of limitation to be decided by the Arbitral Tribunal rather than deciding it at the judicial stage.
Holding and Implications
Holding: The petition is allowed; the mandate of Mr. Vivek Kumar Tandon, Advocate, the then Sole Arbitrator, is terminated; and, with the consent of the parties, Mr. Justice Swatanter Kumar, former Judge of the Supreme Court, is appointed as Sole Arbitrator to adjudicate the disputes between the parties.
Implications and direct effects:
- The terminated arbitrator's mandate ends de jure pursuant to the court's application of the cited Supreme Court authority concerning clarificatory judgments and Section 14 of the Arbitration Act.
- The newly appointed Arbitrator must give the disclosure required under Section 12 of the Act before taking up the reference.
- The Arbitrator's fee is to be fixed in accordance with the Fourth Schedule of the Act.
- The newly appointed Arbitrator will commence from the procedural hearing stage, rather than from an earlier substantive stage.
- The specific question of whether the petitioner's claims are barred by limitation is left to the Arbitral Tribunal to decide; the court did not resolve that issue.
- The order does not purport to lay down any new legal precedent; it applies existing Supreme Court authority to the facts before it.
Administrative Details Recorded in the Order
Name and contact details of the appointed Arbitrator as recorded in the order:
Mr. Justice Swatanter Kumar, Former Judge, Supreme Court of India
Address: C-3/5, 1st Floor, Safdarjung Development Area, New Delhi-110016.
Mobile: 9560413636.
21. The Supreme Court in case of Bharat Broadband Network Limited vs. United Telecoms Limited (2019) 5 SCC 755 in context of the judgment in TRF Ltd. Vs. Energo Engineering Projects Ltd. 2017 8 SCC 377 had clearly stated as soon as a clarificatory judgment is pronounced, Section 14 of the Act comes into play, automatically terminating the mandate de jure.
22. In view of the above, the petition deserves to be allowed.
23. The mandate of Mr. Vivek Kumar Tandon, Advocate, the present Sole Arbitrator, is hereby terminated. This, however, is not a reflection on the competence of the said Arbitrator.
24. With the consent of the parties, Mr. Justice Swatanter Kumar, former Judge of Supreme Court is appointed as a Sole Arbitrator to adjudicate the disputes between the parties.
25. The address and mobile number of the learned Arbitrator is as under: Mr. Justice Swatanter Kumar, Former Judge, Supreme Court of India, ARB.P. 546/2019 Page 7 of 7 C-3/5, 1 Floor, Safdarjung Development Area, New Delhi-110016. Mobile: 9560413636.
26. The learned Arbitrator shall give disclosure under Section 12 of the Act before entering upon reference.
27. Fee of the Arbitrator shall be fixed as per Fourth Schedule of the Act.
28. Needless to say that the newly appointed Arbitrator will begin the proceedings from the stage of procedural hearing.
29. Ms. Rajesh, at this stage, also points out that the claims of the petitioner are barred by time.
30. The question of the claims of the petitioner being barred by time is left open to be decided by the Arbitral Tribunal.
31. The petition is allowed and the pending application is disposed of in the aforesaid terms. JYOTI SINGH, J FEBRUARY 07, 2020
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