Madras High Court
G.N.Pandian vs Mr.S.Vasudevan on 3 December, 2019
Equivalent citations: AIR 2020 (NOC) 887 (MAD.)
Author: M.Sundar
Bench: M.Sundar
O.P.No.804 of 2019
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated : 03.12.2019
Coram
THE HONOURABLE MR. JUSTICE M.SUNDAR
A.No.9007 of 2019
G.N.Pandian ... Applicant
vs.
1.Mr.S.Vasudevan
Managing Director
M/s.Ozone Projects Private Ltd.
Ulsur Road
Bangalore
2. M/s.Ozone Projects Private Ltd.
No.63, G.N.Chetty Road
T.Nagar, Chennai – 600 017
3.Hon'ble Mr.Justice K.Venkataraman
Former Judge, Madras High Court
'L' Block, 125, 17th Street
East Anna Nagar, Chennai – 600 102 ... Respondents
(3rd Respondent stands deleted vide this order dated 03.12.2019)
Application filed under Order XIV Rule 8 of O.S.Rules read with Section
29A of Arbitration and Conciliation Act, 1996 to extend the time limit for a
further period of six (6) months in conducting Arbitration No.5 of 2018 as
deems fit by this Court.
For Applicant : Mr.R.Karthikeyan
for Mr.R.Bharanidharan
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O.P.No.804 of 2019
For Respondents : Mr.R.Venkataraman
ORDER
Mr.R.Karthikeyan, learned counsel representing the counsel on record for applicant and Mr.R.Venkatraman of M/s.Tatva Legal Chennai (Law Firm) on behalf of Respondents 1 and 2 are before this Court.
2. To be noted, third respondent is a Hon'ble former Judge of this Court, who constitutes the Arbitral Tribunal, as a sole Arbitrator. Third respondent shall henceforth be referred to as 'said AT' ('AT' standing for 'Arbitral Tribunal') for the sake of convenience and clarity.
3.Claimant before said AT is the applicant herein. Respondents 1 and 2 before AT are Respondents 1 and 2 respectively in instant application before this Court.
4. Considering the nature of instant application, said AT, which has been arrayed as third respondent, stands deleted. Both learned counsel i.e., counsel for applicant as well as counsel for Respondents 1 and 2, undertake to communicate this order to Hon'ble former Judge, who constitutes said AT. 2/11 http://www.judis.nic.in O.P.No.804 of 2019 Likewise, by way of a post script to this order, Registry is also being directed to communicate this order to Hon'ble former Judge of this Court, who constitutes said AT.
5. With the aforesaid preface, this Court now embarks upon the exercise of examining instant application on hand. Judges' Summons in instant application says that this has been filed under Section 29-A of 'The Arbitration and Conciliation Act, 1996' (hereinafter 'A & C Act' for brevity). At the hearing, learned counsel on both sides submit for the sake of clarity and specificity that instant application is under Sub-section (5) read with sub-section (4) of Section 29-A of A & C Act.
6.Instant application is innocuous and there is no disputation or contestation as learned counsel on both sides submit in unison that extension of time by six months for said AT for passing arbitral award is essential.
7. Notwithstanding the above said trajectory, this application raises an interesting point owing to amendment to Section 29-A of A & C Act, which came into force on and from 30.08.2019 owing to notification of 'The Arbitration and Conciliation (Amendment) Act, 2019 (Act No.33 of 2019)', 3/11 http://www.judis.nic.in O.P.No.804 of 2019 which shall hereinafter be referred to as 'said Amendment Act' for the sake of convenience and clarity.
8.Section 6 of said Amendment Act amends Section 29-A of A & C Act and Section 6 of said Amendment Act, reads as follows:
' 6. In Section 29A of the principal Act.-
(a) for sub-section (1), the following sub-section shall be substituted, namely.-
(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:
(b) in sub-section (4), after the proviso, the following provisos shall be inserted namely.-
“Provided further that where an application under sub-section (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 fess is reduced.' (underlining made by this Court to supply emphasis and highlight) 4/11 http://www.judis.nic.in O.P.No.804 of 2019
9. Suffice to say that date of commencement of arbitration in instant case within the meaning of Section 21 of A & C Act is prior to 30.08.2019. The exact date with specificity is not readily available, but considering the nature of this application, it will suffice to say that date of commencement of arbitration is prior to 30.08.2019. To be noted, date of filing of instant application is 20.11.2019 and therefore this date is also prior to 30.08.2019.
10. This application seeking extension of time for said AT for passing arbitral award by six months has been filed taking 26.03.2018 as the reckoning date. To be noted, 26.03.2018 is the date on which said AT had the first sitting. Considering the language in which Section 29-A is couched (as it stood prior to 30.08.2019), this Court is convinced that this is incorrect. Sub-Section (1) of Section 29-A and explanation thereto reads as follows:
'29-A. Time-limit for arbitral award._(1) The award shall be made within a period of twelve months from the date the arbitral tribunal enters upon the reference.
Explanation.- For the purpose of this sub-section, an arbitral tribunal shall be deemed to have entered upon the reference on the date on which the arbitrator or all the arbitrators as the case may be, have received notice, in writing, of their appointment.' Post 30.08.2019, it reads as follows:
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http://www.judis.nic.in O.P.No.804 of 2019 '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.' (underlining made by this Court to supply emphasis and highlight)
11. A perusal of aforesaid Sub-section (1) of Section 29-A together with explanation thereto reveals that the reckoning date either way is not the date of first sitting of Arbitral Tribunal. It is the date on which the said AT entered upon reference upto 29.08.2019 and it is the date of completion of pleadings within the meaning of Section 23(4) of A & C Act on and from 30.08.2019. Before this Court proceeds with this aspect of the matter, a question arose as to whether Sub-section (1) of Section 29-A as it stood prior to 30.08.2019 or as it stands today post 30.08.2019 owing to Amendment Act coming into force applies in the instant case. In this regard it was pointed out that A & C Act was earlier amended by way of a earlier Amending Act, namely Arbitration and Conciliation (Amendment) Act, 2015 (Act No.3 of 2016). This Act No.3 of 2016 6/11 http://www.judis.nic.in O.P.No.804 of 2019 was originally promulgated by way of an Ordinance dated 23.10.2015 and subsequently the Act took effect from the date of the Ordinance, namely 23.10.2015. Section 26 of the earlier Amending Act i.e., Act 3 of 2016 reads as follows:
' 26. Act not to apply to pending arbitral proceedings Nothing contained in this Act shall apply to the arbitral proceedings commenced in accordance with the provisions of Section 21 of the principal Act, before the commencement of the Act unless the parties otherwise agree but this Act shall apply in relation to arbitral proceedings commenced on or after the date of commencement of this Act.' (underlining made by this Court to supply emphasis and highlight)
12. It is submitted that there is no provision akin to Section 26 in said Amendment Act.
13. Therefore, said Amendment Act, more particularly Section 6 said Amendment Act, which amends Section 29-A is clearly prospective. Section 26 of earlier Amending Act refers to its application 'to the arbitral proceedings' commenced in accordance with the provisions of Section 21 of the Act as well as 'in relation to arbitral proceedings' commenced on or after the date of commencement of earlier amending Act. To be noted, as far as instant 7/11 http://www.judis.nic.in O.P.No.804 of 2019 application is concerned, the same being under section 29-A (4) of A&C Act, it is clearly in relation to arbitral proceedings. Therefore, reckoning date should be qua date of filing of instant application. It may not be necessary to dilate any further on this aspect of the matter, as this Court now proceeds to examine Sub-section (1) of Section 29-A as it stood prior to 30.08.2019 by taking the said Amendment Act to be prospective. If this view is taken, there is no disputation or disagreement before this Court that the date on which said AT entered upon reference can be safely inferred as 08.03.2018 as that is the date on which a letter was written by the applicant herein appointing Hon'ble Arbtrator to constitute the said AT as this letter is appointment of arbitrator in writing. Thereafter, said AT sent a communication dated 12.03.2018 to all the parties. The exact date on which the letter dated 08.03.2018 was received by said AT is not available, but it is clearly prior to 12.03.2018. In other words, it can be safely inferred that 08.03.2018 can be taken as the reckoning date as obviously communication dated 08.03.2018 could not have been received by the said AT prior to 08.03.2018. If 08.03.2018 is taken as the reckoning date, 12 months time frame within the meaning of Sub-section (1) of Section 29-A elapsed on 07.03.2019 and further six months period, which is the extended period within the meaning of sub-section (3) of Section 29-A agreed upon between the parties to the arbitration elapsed on 07.09.2019. As there is no 8/11 http://www.judis.nic.in O.P.No.804 of 2019 disputation or disagreement regarding this aspect, this Court is acceding to the request for extension of time qua said AT to make the award. This is in the light of averments made in the affidavit filed in support of the instant application from which it emerges clearly that both parties as well as said AT are not responsible for the delay.
14. In this regard, the language in which sub-section (4) of Section 29-A is couched makes it clear that if the award is not made within the period specified in sub-section (1) and the extended period, the mandate of the arbitrator will terminate and extension of time of said AT under sub-section (4) and (5) of Section 29-A can be made either before or after expiry of the extended period of six months post original 12 months. In the instant case, as this application has been filed post extended period of 6 months, the termination stands saved by this extension order.
15. Notwithstanding the aforesaid position, both learned counsel by consent submit that it would be desirable to extend the time by six months from today or in other words, both learned counsel request that the time shall be extended upto 03.06.2020.
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16. This application is ordered extending the time limit for Hon'ble Arbitrator constituting the Arbitral Tribunal qua Arbitration No.5 of 2018 for a period of 6 months from today i.e., upto 03.06.2020.
This application is ordered and disposed of on above terms. As already alluded to supra, both learned counsel undertake to communicate the contents of this order as well as a copy of this order to the Hon'ble Arbitrator.
03.12.2019 gpa Note: Registry is directed to send a copy of this order to the sole Arbitrator i.e., Hon'ble Mr.Justice Venkataraman, Former Judge, Madras High Court, 'L' Block, 125, 17th Street, East Anna Nagar, Chennai – 600 102. 10/11 http://www.judis.nic.in O.P.No.804 of 2019 M.SUNDAR.J., gpa Application No.9007 of 2019 03.12.2019 11/11 http://www.judis.nic.in