Full Text
HIGH COURT OF DELHI
Date of Decision: 10th November 2022
MADURAI TUTICORN EXPRESSWAYS LTD ...... Petitioner
Through: Mr. Anil K. Airi, Senior Advocate with Mr. Suryadeep Singh, Ms. Radha R. Tarkar, Ms. Sadhana Sharma, Mr.Mudit Ruhella and Mr. Aaron Shaw, Advocates.
Through: Mr. Santosh Kumar with Mr. Daksh Arora, Advocates.
NATIONAL HIGHWAYS AUTHORITY OF INDIA ...... Petitioner
Through: Mr. Santosh Kumar with Mr. Daksh Arora, Advocates.
Through: Mr. Anil K. Airi, Senior Advocate with
Mr. Suryadeep Singh, Ms. Radha R.
Tarkar, Ms. Sadhana Sharma, Mr.Mudit Ruhella and Mr. Aaron Shaw, Advocates.
JUDGMENT
ANUP JAIRAM BHAMBHANI J.
By way of the present connected petitions, one under section
14(2) and section 15 of the Arbitration & Conciliation Act 1996 („A&C
Act‟ for short) and the other under section 29-A(5) of the A&C Act, M/s
Madurai Tuticorin Expressways Ltd. („MTEL‟) seeks an order declaring that the mandate of the learned Arbitral Tribunal seized of their disputes stood terminated w.e.f. 17.01.2020, and consequently also for substitution of the tribunal; while the National Highways Authority of
India („NHAI‟) seeks extension of the mandate of the Arbitral Tribunal by one year. The opposing parties have also made other consequential and incidental prayers in the context of the principal prayers referred to above.
2. Briefly stated, disputes between MTEL and NHAI arise from a Concession Agreement dated 24.07.2006 for the design, operation and maintenance of a certain section of NH-45B in the State of Tamil Nadu.
3. MTEL having invoked arbitration vide notice dated 30.09.2016 and having nominated their arbitrator on a 03-Member Arbitral Tribunal, parties agreed that they would be governed by the disputes resolution mechanism of the Society for Affordable Resolution of Disputes („SAROD‟), whereupon NHAI appointed its nominee arbitrator; and the 02 arbitrators so appointed, then appointed the presiding arbitrator. The Arbitral Tribunal thus constituted, entered upon reference on 23.03.2017.
4. Since the mandate of the Arbitral Tribunal was expiring, in an earlier round of proceedings, vide order dated 31.05.2018 made in O.M.P.(MISC)(COMM) No. 121/2018 filed by the NHAI under section 29-A (5) of the A&C Act, the Arbitral Tribunal was granted extension of mandate till 31.03.2019. This order was carried-up by MTEL in SLP(C) No. 16334/2018, in which, while disposing of the SLP vide order dated 09.07.2018, the Supreme Court recorded the following observations: “Heard learned counsel for the parties. We do not find any merit in this petition. The Special Leave Petition is accordingly dismissed. However, it is made clear that the petitioner may move an application for impleadment of Government of Tamil Nadu before the Arbitral Tribunal which will decide that application after hearing learned counsel for both sides on merits. However, we direct the Arbitral Tribunal to deliver its award within an extended period so that no further extension of time be asked for. All contentions shall remain open to both sides.” (emphasis supplied)
5. Despite the peremptory direction contained in the aforesaid order dated 09.07.2018 however, MTEL preferred a second petition under section 29-A(5) bearing O.M.P.(MISC)(COMM) No.201/2019, in which vide order dated 17.05.2019 made by a Co-ordinate Bench of this court, the mandate of the learned Arbitral Tribunal was again extended by a further period of 08 months commencing 17.05.2019, while also regularizing the prior gap in the mandate. In order dated 17.05.2019, the court also dealt with an application that was stated to have been filed by MTEL before the Governing Body of SAROD seeking substitution of the Presiding Arbitrator; and taking into account all facts and circumstances, and granting a further period of 08 months commencing 17.05.2019 to conclude the arbitral proceedings, the court issued the following directions: “4. Insofar the second prayer is concerned, the petitioner seeks a direction for substitution of the presiding arbitrator with a person having legal/judicial background. * * * * * “6. Therefore, to my mind, the second prayer made by the petitioner need not detain me as the Governing Body constituted under the SAROD Rules can take a decision one way or another on the application filed by the petitioner before it. * * * * * “12. Furthermore, the Governing Body is directed to deal with the petitioner’s application and dispose of the same within two weeks of the receipt of a copy of the order passed by this court.”
6. In the petition now filed by NHAI under section 29-A(5), MTEL makes grievance of the fact that the Governing Body of SAROD had failed to decide the application for substitution of the Presiding Arbitrator that was pending before it within the 02-week period as was directed vide order dated 17.05.2019, despite the fact that the order had been forwarded by MTEL to SAROD on 30.05.2019.
7. On the other hand, NHAI submits, that on 14.01.2020 it wrote a letter seeking reference of the disputes to NHAI‟s Conciliation Committee of Independent Experts (CCIE); to which even MTEL assented on 20.02.2020. NHAI says that conciliation proceedings however, have still not begun by reason of intervening circumstances as seen from the exchange of communications between the parties, as detailed in the petition. NHAI further submits, that in the meantime, their nominee Arbitrator passed-away, which necessitated NHAI to appoint an alternate nominee on the Arbitral Tribunal. Lastly, NHAI contends, that the Arbitral Tribunal last convened of 21.05.2021, when it recorded that the reconstitution of the Arbitral Tribunal would only be possible once MTEL‟s challenge to the Presiding Arbitrator is dealt with by SAROD. On point of fact, it is submitted, that on 28.05.2021 SAROD dismissed MTEL‟s plea seeking substitution of the Presiding Arbitrator; whereupon the Arbitral Tribunal convened again only on 01.06.2021.
8. While extensive arguments have been addressed by learned counsel appearing for the parties, premised upon the averments contained in their respective petitions, in the opinion of this court such arguments cannot be countenanced by the court by reason of a more fundamental impediment to entertaining the present petition, which impediment arises on a proper appreciation of order dated 09.07.2018 made by the Supreme Court. So as to correctly appreciate the significance of the observations contained in the aforesaid order dated 09.07.2018, a brief reference to the position of law in relation to the correct construction of orders made on Special Leave Petitions is necessary. The following extract of the decision of the Supreme Court in Kunhayammed v. State of Kerala[1] is instructive on the point, and reads as follows:
9. In the present case, the special leave petition was dismissed at the first hearing, with the Supreme Court having heard counsel for both parties. By dismissing the special leave petition, the Supreme Court did not interfere in order dated 31.05.2018 made by the Co-ordinate Bench of this court and accordingly declined to exercise its discretionary jurisdiction to grant leave to appeal. But that was not the end of the matter. In its order, the Supreme Court also issued a specific direction to the Arbitral Tribunal to “…deliver its award within an (sic) extended period so that no further extension of time be asked for”. As mandated in para 44 (v) of Kunhayammed extracted above, whatever was thus directed by the Supreme Court order would bind the parties as also this court in any subsequent proceedings by way of judicial discipline. Order dated 31.05.2018 made by the Co-ordinate Bench in fact received the imprimatur of the Supreme Court by its order dated 09.07.2018; and the time-frame for completion of the arbitral proceedings and for delivery of award by the learned Arbitral Tribunal stood confirmed, with a further observation that no further extension of time must be sought.
10. On a plain reading of the Supreme Court order dated 09.07.2018 in light of the precept contained in Kunhayammed (supra) therefore, it is clear that the term of the mandate of the Arbitral Tribunal was sealed by order dated 09.07.2018 made by the Supreme Court, which confirmed the extension of mandate granted by the Co-ordinate Bench of this court vide order dated 31.05.2018 in O.M.P. (MISC.) (COMM.) No. 121/2018 upto 31.03.2019. It bears repetition that by the said order, the Supreme Court also issued a peremptory direction to the Arbitral Tribunal to deliver its award within the extended period; and to the parties that no further extension of time be asked for.
11. In the opinion of this court, any further extension of time could, if at all, only have been sought from the Supreme Court in appropriate proceedings; and even the further extension of 08 months granted by Co-ordinate Bench vide order dated 17.05.2019 may not have been warranted.
12. Be that as it may, in order dated 17.05.2019, the Co-ordinate Bench had in any case, already taken into account the pendency of MTEL‟s application seeking substitution of the Presiding Arbitrator before the Governing Body of SAROD and had directed that that issue be decided, one way or the other, within 02 weeks from receiving a copy of that order; which order is stated to have been forwarded to SAROD by MTEL on 30.05.2019. The time-frame for SAROD to decide the substitution application was therefore subsumed in the 08-month period of extension commencing 17.05.2019 granted by that order. Surely, any intervening events that may have interfered in that decision making or, for that matter, even the subsequent attempt by NHAI at initiating conciliation proceedings, would not override or detract from the clear and express direction contained in order dated 09.07.2018 made by the Supreme Court.
13. In this view of the matter, this court is of the view, that no relief can be granted to NHAI in O.M.P. (MISC.)(COMM.) No.107/2021 seeking extension of the mandate of the Arbitral Tribunal; which petition is accordingly dismissed.
14. Insofar as the prayer made in O.M.P. (T) (COMM.) No. 57/2021 is concerned, without delving further into the matter of the 08-month extension already granted by order dated 17.05.2019, suffice it to say, that even that extended period from 17.05.2019 to 17.01.2020 has long expired alongwith the mandate of the Arbitral Tribunal, which stood expired as of 17.01.2020; and any proceedings held or orders passed by the Arbitral Tribunal after 17.01.2020 are accordingly without jurisdiction, and therefore of no consequence. In view of the foregoing discussion, the prayer for substitution of the Arbitral Tribunal must also be rejected.
15. Both petitions are disposed-of in the above terms.
16. Pending applications, if any, also stand disposed-of.
17. It is however made clear that this order shall not stand in the way of the parties invoking their legal rights or remedies afresh, including any claims as may be surviving, arising from their inter-se disputes, as available to them, in accordance with law.
ANUP JAIRAM BHAMBHANI, J NOVEMBER 10, 2022