Barasat Krishnagar Expressways Ltd v. National Highways Authority of India

1. This petition has been filed under Section 29A of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act’) seeking extension of time for the learned Arbitral Tribunal to pronounce its Award.

2. As disputes arose between the parties, the petitioner invoked the Arbitration Agreement between the parties in March 2016. The parties on 02.05.2016 entered into a Supplementary Agreement providing for the arbitration to be conducted through ‘Arbitration Rules of the Society for Affordable Redressal of Disputes-Ports (SAROD-Ports)’ (hereinafter referred to as the ‘SAROD Rules’). The learned Arbitral Tribunal was constituted on 02.06.2016. On expiry of the period of one year, the parties agreed to grant six months’ further extension in terms of Section 29A (3) of the Act to the learned Arbitral Tribunal to pronounce its Award. The petitioner thereafter filed an application under Section 29A of the Act before this Court.

3. In meantime, the Presiding Arbitrator of the learned Arbitral Tribunal was also substituted on 13.09.2018. Subsequently, the nominee arbitrator of the petitioner tendered his resignation and, therefore, had to be substituted.

4. On a petition filed under Section 29A of the Act, the time for making of the Arbitral Award was extended by a period of six months with effect from 18.03.2021. The learned Arbitral Tribunal concluded hearing the submissions of the parties on 25.09.2021. The learned Arbitral Tribunal directed the parties to file their written submissions, which were filed only on 09.01.2022. The parties further filed their respective cost submissions on 10.03.2022.

5. By an e-mail dated 21.11.2022, addressed to the parties, the learned Arbitral Tribunal, through the Presiding Arbitrator, requested the parties to obtain an extension of around two to three months for passing of the Arbitral Award.

6. The petitioner filed the present petition before this Court on or about 24.11.2022.

7. After notice on the present application had been issued to the respondent, the learned Arbitral Tribunal, through the Presiding Arbitrator, has informed the parties vide e-mail dated 19.12.2022 that the preparation of the Arbitral Award is at an advance stage and can be pronounced within a couple of weeks of the extension being granted by this Court.

8. The learned counsel for the respondent, however, opposes this application and submits that the present case requires the learned Arbitral Tribunal to be substituted in terms of Section 29A (6) of the Act. Drawing reference to Rule 37.[2] of the SAROD Rules, he submits that the said rules mandate the Arbitral Award to be pronounced within 30 days from the date on which the hearing is closed and such time can be extended only by the Secretary of the SAROD or with the consent of the parties. He, however, fairly admits that the said provision cannot derogate from the power that is vested in this Court under Section 29A of the Act. He submits, the above default of the Arbitral Tribunal would still be a sufficient reason for this Court to exercise its powers under Section 29A(6) of the Act to substitute the Arbitral Tribunal.

9. Placing reliance on the judgment of the Supreme Court in Anil Rai v. State of Bihar, (2001) 7 SCC 318, he submits that the Supreme Court, albeit in relation to the pronouncement of the judgments by the Court, has framed guidelines prescribing time for pronouncement of the judgment. In terms of the guidelines, in case the judgment is not pronounced within a period of six months, either party may approach the Chief Justice of the High Court with a prayer to withdraw the said case and to make it over to any other Bench for fresh arguments. He submits that applying a similar principle, this Court should, in fact, substitute the Arbitrators as the Award has admittedly not been pronounced within a period of six months even from the date of submission of the written submissions.

10. The learned counsel for the respondent, placing reliance on the judgment of this Court in Director General, Central Reserve Police Force v. Fibroplast Marine Pvt. Ltd, 2022 SCC OnLine Del 1335, submits that delay in pronouncing an Arbitral Award can itself be a ground for setting aside the Award. He submits that, therefore, the Award which may be pronounced by the present Arbitral Tribunal would be suspect and may be set aside only on this ground. He submits that this warrants substitution of the Arbitral Tribunal.

11. I have considered the submissions made by the learned counsels for the parties.

12. It is to be noted that even during the period of the COVID-19 pandemic, the Arbitral Tribunal made endeavors to proceed with the Arbitral proceedings and, in fact, concluded hearing the parties on 25.09.2021. Direction was given to the parties to file their written submissions, which they filed only on 09.01.2022. The parties filed their submissions on cost on 10.03.2022. The learned senior counsel for the petitioner has submitted that the parties have filed almost 60 volumes of pleadings/documents. The convenience compilation of documents itself runs into around 30 volumes. It is, therefore, apparent that the parties and the Arbitral Tribunal have expended considerable effort in ensuring that the arbitral proceedings come to a culmination. In case the Arbitral Tribunal is to be substituted at this stage, it would negate all this effort.

13. The learned counsel for the respondent is correct in his submission that an inordinate delay in passing of an Award is detrimental to the very object of arbitration, however, in my view, effect of delay in making an Award is to be considered by the Court once the Award is pronounced by the Arbitral Tribunal and is challenged by either of the parties in accordance with law.

14. Keeping in view the facts of the present case, I am of the opinion that the delay in pronouncing the Award itself does not warrant exercise of powers vested in this Court under Section 29A (6) of the Act.

15. The Arbitral Tribunal has now indicated that its Award would be ready for pronouncement within a period of a couple of weeks.