Delhi High Court - Orders
Indure Private Limited vs Jmc Projects (India) Ltd on 13 December, 2021
Author: Vibhu Bakhru
Bench: Vibhu Bakhru
$~19(2020)
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P.(MISC.)(COMM.) 455/2019
INDURE PRIVATE LIMITED ..... Petitioner
Through Mr. Ankit Shah, Mr. Varun Gupta &
Ms. Simron Wason, Adv.
Versus
JMC PROJECTS (INDIA) LTD ..... Respondent
Through Mr. Dayan Krishnan, Sr. Adv. with
Mr. Shamik Sanjanwala, Adv.
CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU
ORDER
% 13.12.2021
1. The petitioner has filed the present petition under Section 29A of the Arbitration and Conciliation Act, 1996 (hereafter the 'A&C Act'), inter alia, praying that the mandate of the Arbitral Tribunal be extended for a further period of two years.
2. The petitioner claims that the parties had entered into a contract pursuant to a Letter of Intent dated 26.08.2011 and thereafter, a Work Order dated 06.09.2011 was awarded to the respondent for executing civil works for CW System, Coal Handling Plant, Ash Handling Plant, Chimney Raft and TG Deck of Unit No.2 at the power plant in Angul, Orrisa. Subsequently, on 12.12.2012, the respondent was awarded another contract for execution and completion of civil works at 'Vindhyachal Super Thermal Power Plant, Stage-III, NTPC'.
3. It is stated that disputes arose between the parties in respect of both the contracts and the same were referred to the Sole Arbitrator, who was unilaterally appointed by the petitioner on 29.07.2016. The said arbitration proceedings were referred to as Arbitration Case No.1 of 2016 and Signature Not Verified Digitally Signed By:DUSHYANT RAWAL Arbitration Case No. 2 of 2016 before the Arbitral Tribuanl.
4. The present petition relates to Arbitration Case No. 2 of 2016. It is stated that during the course of the arbitral proceedings, the parties entered into negotiations for settlement of the disputes after the pleadings were completed. It is also stated that for a brief period, the Arbitral Tribunal had suspended the proceedings on account of non-deposit of fee.
5. The mandate of the Arbitral Tribunal was extended twice. Firstly, by mutual consent of the parties and second, by way of a consent order passed by this Court in a petition filed under Section 29A of the A&C Act (an order dated 23.05.2018 passed in OMP (MISC.) (COMM) No.105/2018) whereby, the mandate of the Arbitral Tribunal was extended for a period of one year with effect from 14.04.2018.
6. The mandate of the Arbitral Tribunal expired on 14.04.2019; however, the parties did not move any application for extension of the mandate of the Arbitral Tribunal at the material time. The respondent filed an application under Section 29A of the A&C Act for extending the mandate of the Arbitral Tribunal in Arbitration Case No.1 of 2016 [being OMP (MISC.)(COMM.) No.315/2019], which was allowed by an order dated 07.08.2019. However, the respondent did not move any application for extending the mandate of the Arbitral Tribunal in this case.
7. The petitioner states that, in view of the practice followed by the respondent, it was expecting that the respondent, being a claimant, would move such an application. However, since the respondent did not do so, the petitioner has filed the present petition.
8. Mr. Krishnan, learned senior counsel appearing for the respondent, has opposed the present petition on two grounds. First, he submits that the Signature Not Verified Digitally Signed By:DUSHYANT RAWAL parties had entered into a settlement and that was the sole reason why the parties did not approach this Court for extension of the mandate of the Arbitral Tribunal.
9. Secondly, he submits that the petitioner has moved this petition as the respondent has sought to approach the National Company Law Tribunal (NCLT) for initiating proceedings under the Insolvency and Bankruptcy Code, 2016 on the ground that the petitioner had failed to pay the admitted amount in terms of the Settlement Agreement dated 20.07.2017.
10. He has also referred to the order dated 07.08.2019 passed by this Court in OMP(MISC.) (COMM) No. 315/2019, whereby the mandate of the Sole Arbitrator to make an award was extended for a period of nine months in Arbitration Case No.1 of 2016. He submits that the said order also mentions Arbitration Case No. 2 of 2016 and therefore, if the petitioner was desirous of seeking extension of time for making an award in this petition, it should have filed a petition immediately after the expiry of the mandate of the Arbitral Tribunal on 14.04.2019 or after the order dated 07.08.2019 passed by this Court under Section 29A of the A&C Act in respect of Arbitration Case No.1 of 2016. He submits that the fact that the petitioner had not done so clearly establishes that the parties had resolved their disputes and there was no requirement of the parties now to extend the mandate of the Arbitral Tribunal.
11. In the alternative, he submits that the if the mandate of the Arbitral Tribunal is extended, the present Arbitrator be substituted under Section 29A(6) of the A&C Act as the arbitrator was appointed unilaterally, which is impermissible in view of the decisions of the Supreme Court in TRF Ltd. v. Energo Engineering Projects Ltd.: (2017) 8 SCC 377 and; Perkins Signature Not Verified Digitally Signed By:DUSHYANT RAWAL Eastman Architects DPC and Anr. v. HSCC (India) Limited: Arbitration Application No 32 of 2019, decided on 26.11.2019
12. The learned counsel appearing for the petitioner has countered the aforesaid submissions. He states that the respondent has adopted inconsistent stands in various fora. He submits that before the Arbitral Tribunal, the respondent had contended that there was no settlement between the parties since one of the cheques issued by the petitioner was dishonoured. He states that the petitioner had accepted the said stand and requested the Arbitral Tribunal to proceed and re-adjudicate the disputes. Inconsistent with the aforesaid plea, the respondent has now asserted that the parties have arrived at a settlement and the arbitral proceedings stand terminated.
13. Insofar as substitution of the learned Sole Arbitrator is concerned, the learned counsel for the respondent submits that he joins the petitioner in its prayer that an independent arbitrator be appointed as that would obviate any avoidable challenge to the arbitral award at a subsequent stage.
14. It is relevant to mention that during the course of submissions, it was contended on behalf of the respondent that it did not wish to press its claims and therefore, there is no requirement for the arbitral proceedings to continue insofar as the respondent is concerned. This Court had pointedly asked the learned counsel for the respondent to clarify the same because if the respondent did not wish to pursue its claims, clearly there was no question of the Arbitral Tribunal deciding the same. However, the learned counsel for the respondent submits that it would not be apposite for him to make any definite statement at this stage.
15. The mandate of the Arbitral Tribunal expired on 14.04.2019 and the Signature Not Verified Digitally Signed By:DUSHYANT RAWAL present petition was filed on 04.11.2019. It is also clear that there has been an inordinate delay in completion of the arbitral proceedings, however, it is seen the same is not attributable to the learned Arbitrator but for reasons attributable to the parties. As noted above, the arbitral proceedings were suspended for a brief period due to non-payment of arbitral fees. It is also apparent that the parties had attempted to resolve the disputes and considerable time was spent in the said exercise.
16. Whether the parties had successfully entered into a settlement is a matter of controversy. This Court is refraining to examine the said controversy in this petition as it is beyond its standards of examination under Section 29A of the A&C Act.
17. In view of the above, the contention that this Court ought to finally determine the contentious issue whether there has been, in fact, a final and binding settlement as a ground to reject this application, is unpersuasive and cannot be accepted.
18. In view of the above, this Court considers it apposite to allow the present petition to extend the mandate of the Arbitral Tribunal.
19. Insofar as the substitution of the learned Sole Arbitrator is concerned, the parties are ad idem that an independent arbitrator is required to be appointed in this case to obviate any further challenge as stated above.
20. In view of the above, the mandate of the Arbitral Tribunal is extended for a further period of twelve months from today till 12.12.2022. The period prior to today is also regularised.
21. This Court is informed that in another matter between the parties - the Arbitration case no.1/2016 - Justice (Retd.) Badar Durrez Ahmed, former Chief Justice of Jammu & Kashmir High Court has been appointed as an Signature Not Verified Digitally Signed By:DUSHYANT RAWAL Arbitrator. This Court considers it apposite to appoint him as an arbitrator in in this case as well. Accordingly, with the consent of both the parties, Justice (Retd.) Badar Durrez Ahmed is appointed as the Sole Arbitrator in place of the Learned arbitrator unilaterally appointed by the petitioner. However, it is clarified that the arbitral proceedings will commence from the stage as currently obtaining.
22. The petition is disposed of in the aforesaid terms.
23. All rights and contentions of the parties are reserved.
24. Nothing stated in this order shall preclude the parties from canvassing such contentions as may be advised including further maintainability of the arbitral proceedings.
VIBHU BAKHRU, J DECEMBER 13, 2021 'gsr' Click here to check corrigendum, if any Signature Not Verified Digitally Signed By:DUSHYANT RAWAL