Skylark Cagers India Pvt. Ltd. v. The Institute of Liver and Biliary Sciences

1. The instant application has been filed by the petitioner under Section 29A of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act, 1996”) seeking the following relief: “In light of the abovementioned facts and circumstances, it is respectfully prayed that this Hon'ble Court may be pleased to pass an order, extending the time for completion of arbitral proceedings and making of the arbitral award, by a further period of 4 months subject to such terms and conditions as this Hon'ble Court may deem fit.”

2. Learned counsel appearing on behalf of the petitioner submitted that the arbitral proceedings were initiated pursuant to a notice of invocation given by the petitioner, Skylark Cagers International, on 12th April, 2016. The Applicant is the Claimant in the aforementioned arbitration procedures.

3. It has been submitted on behalf of the petitioner that on 3rd October, 2016, all pleadings, including the counterclaim, were submitted in the aforementioned matter, and the case was thereafter set for admission and denial of documents. However, on 10th October, 2016, the petitioner filed additional documents in response to the respondent's counterclaim and many other arguments. It is further submitted that the aforementioned application with respect to taking additional documents on record was allowed subject to costs. Subsequently, the parties concluded the admission denial of the documents and on 21st November, 2016, the petitioner company filed a list of witness including the affidavit of Sh. Navdeep Pratap Singh, who was also witness to the said matter.

4. It has been submitted on behalf of the petitioner that in the meantime, due to the witness's unavailability, Sh. Navneet Pratap Singh replaced the said witness and the witness was cross-examined on 22nd December, 2016. The cross-examination, however, was postponed at the parties' mutual request to explore settlement possibilities.

5. It is further submitted that in the absence of any settlement between the parties, the case was reopened on 3rd January, 2017.

6. It has been submitted on behalf of the petitioner that due to the expiration of the statutory mandate of one and a half years, including the six-month extension, the Learned Arbitrator directed the parties vide order dated 14th October, 2017 to request an extension of time from this Court in order to conclude the Arbitration proceedings.

7. Per contra, learned counsel appearing on behalf of the respondent submits that by way of the instant petition, asking for an extension of four months for the completion or arbitration procedures, the petitioner is abusing the due process of law. Since, the act's allotted time for concluding the arbitration proceeding had lapsed, the Learned Arbitrator extended it by another six months, which likewise ran out on 13th October, 2017. Subsequent thereto, the Learned Arbitrator directed the petitioner vide order dated 14th October, 2017 to approach this Court to request an extension of time. It is further submitted that the present petitioner has been filed after an in-ordinate delay of more than 17 months.

8. It is submitted on behalf of the respondent that since more than 17 months have elapsed from the date of the Ld. Arbitrator's order, the petitioner has failed to provide any valid justification for approaching this court to request an extension of time for the conclusion of arbitral proceedings. It is further submitted that this demonstrates the lackadaisical approach of the petitioner towards the arbitration proceedings. Thus, the instant application is an obvious instance of legal process abuse.

9. Heard the learned counsel for the parties and perused the record.

10. This Court finds it evident to peruse Section 29-A of the Act, 1996 in order to adjudicate the instant petition. The same is reproduced hereunder: “[29-A. Time limit for arbitral award.— [(1) The award in matters other than international commercial arbitration shall be made by the arbitral tribunal within a period of twelve months from the date of completion of pleadings under sub-section (4) of Section 23: Provided that the award in the matter of international commercial arbitration may be made as expeditiously as possible and endeavour may be made to dispose of the matter within a period of twelve months from the date of completion of pleadings under sub-section (4) of Section 23.] (2) If the award is made within a period of six months from the date the arbitral tribunal enters upon the reference, the arbitral tribunal shall be entitled to receive such amount of additional fees as the parties may agree. (3) The parties may, by consent, extend the period specified in sub-section (1) for making award for a further period not exceeding six months. (4) If the award is not made within the period specified in sub-section (1) or the extended period specified under subsection (3), the mandate of the arbitrator(s) shall terminate unless the court has, either prior to or after the expiry of the period so specified, extended the period: Provided that while extending the period under this subsection, if the court finds that the proceedings have been delayed for the reasons attributable to the arbitral tribunal, then, it may order reduction of fees of arbitrator(s) by not exceeding five per cent for each month of such delay: [Provided further that where an application under subsection (5) is pending, the mandate of the arbitrator shall continue till the disposal of the said application: Provided also that the arbitrator shall be given an opportunity of being heard before the fees is reduced.] (5) The extension of period referred to in sub-section (4) may be on the application of any of the parties and may be granted only for sufficient cause and on such terms and conditions as may be imposed by the court. (6) While extending the period referred to in sub-section (4), it shall be open to the court to substitute one or all of the arbitrators and if one or all of the arbitrators are substituted, the arbitral proceedings shall continue from the stage already reached and on the basis of the evidence and material already on record, and the arbitrator(s) appointed under this section shall be deemed to have received the said evidence and material. (7) In the event of arbitrator(s) being appointed under this section, the arbitral tribunal thus reconstituted shall be deemed to be in continuation of the previously appointed arbitral tribunal. (8) It shall be open to the court to impose actual or exemplary costs upon any of the parties under this section. (9) An application filed under sub-section (5) shall be disposed of by the court as expeditiously as possible and endeavour shall be made to dispose of the matter within a period of sixty days from the date of service of notice on the opposite party.]”

11. This Court finds it appropriate to reiterate the purpose of establishment of Section 29-A of the Act, 1996, without a doubt is a commendable action. The purpose of this provision is expeditious disposal of arbitration proceedings. The establishment of a time restriction for the proclamation of an arbitral decision would dissuade parties from seeking needless adjournments, which will ultimately favour the litigants who have opted for an alternative dispute resolution process.

12. This Court is further of the view that the instant petition alongwith the captioned application for delay in filing the affidavit, bearing I.A. NO. 334/2023, has been filed by the petitioner at a very belated stage.

13. In view of the foregoing paragraphs, the present petition alongwith pending applications is dismissed being devoid of any merit.

14. The order be uploaded on the website forthwith.