Delhi High Court - Orders
Trichy Thanjavur Expressways Ltd vs National Highways Authority Of India on 18 November, 2021
Author: Vibhu Bakhru
Bench: Vibhu Bakhru
$~26
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P.(MISC.)(COMM.) 398/2019 & IA 4219/2021,
4220/2021, 11496/2021
TRICHY THANJAVUR EXPRESSWAYS LTD ...... Petitioner
Through Mr Amitabh Chaturvedi, Mr Sangeeth
Mohan, Advocates.
Versus
NATIONAL HIGHWAYS AUTHORITY
OF INDIA ..... Respondent
Through Mr Santosh Kumar, Advocate.
CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU
ORDER
% 18.11.2021
1. The petitioner has filed the present petition under Section 29A of the Arbitration & Conciliation Act, 1996 (hereafter the 'A&C Act'), inter alia, praying as under:
"(a) Pass an appropriate order, thereby, extending the time for passing of the arbitral award in the arbitration proceedings titled "Trichy Thanjavur Expressways Limited Versus National Highways Authority of India"
from 12.09.2018 (and/or from the date of hearing of the present petition) by a further period of 12 (twelve) months or such other or further period as this Hon'ble Court may deem fit and proper, Signature Not Verified Digitally Signed By:DUSHYANT RAWAL
(b) Pass an appropriate order, thereby, substituting all the arbitrators constituting the present arbitral tribunal, with a further direction that the arbitral proceedings shall continue from the stage already reached;"
2. On 15.06.2006, the petitioner (Trichy Thanjavur Expressways Ltd. hereinafter 'TTEL') and the respondent (National Highways Authority of India hereinafter 'NHAI') entered into a Concession Agreement dated 15.06.2006 (hereinafter 'the Agreement') for executing the project entailing design, engineering, finance, construction, operation and maintenance of Trichy Thanjavur Section from Km 80.000 to 135.750 of NH-67 in the State of Tamil Nadu.
3. Certain disputes have arisen between the parties in connection with the aforesaid Agreement. The parties had also entered into a Supplementary Agreement, whereby they had agreed that the disputes between the parties would be referred to arbitration to be conducted under the aegis of the Society for Affordable Resolution of Disputes (SAROD) and, in accordance with its Rules.
4. TTEL invoked the Arbitration Agreement and appointed Mr. N.K. Jindal as its nominee Arbitrator. NHAI, on the other hand, appointed Mr. A.K. Singhal as its nominee Arbitrator and both the nominee Arbitrators appointed Mr. Basab Majumdar as the Presiding Arbitrator. He communicated his consent to act as the Presiding Arbitrator on 23.02.2017 and the Arbitral Tribunal stood constituted on that date.
5. All the three Arbitrators, constituting the Arbitral Tribunal, are Civil Engineers and have no experience as Judicial Officers/Judges.
6. On 27.04.2017, the Arbitral Tribunal held the preliminary hearing and Signature Not Verified Digitally Signed By:DUSHYANT RAWAL issued directions for filing of Statement of Claims, Statement of Defence and counterclaims, if any. Directions were also issued for filing of rejoinder to the Statement of Defence and/or reply to the counterclaims. NHAI was also directed to file its rejoinder in respect of the reply to the counterclaims within a period of two weeks thereafter. Thus, the pleadings were required to be completed by 11.09.2017.
7. The Arbitral Tribunal also fixed a schedule for nine hearings to be held during the month of September and October, 2017. The first hearing was scheduled to be held on 11.09.2017.
8. TTEL states that in terms of the directions issued by the Arbitral Tribunal, it filed its Statement of Claims on 26.05.2017. However, NHAI failed to file its Statement of Defence or any counterclaims within the stipulated period. NHAI sought extension of time for the said purpose repeatedly, which was granted. It is stated that as on 11.09.2017 (the date of the first scheduled hearing), NHAI had not filed its Statement of Defence or counterclaims. However, the Arbitral Tribunal granted NHAI further time till 31.10.2017 to file its Statement of Defence / counterclaims. Thus, none of the nine hearings scheduled in the month of September and October, 2017 could be held for want of completion of proceedings.
9. NHAI filed its Statement of Defence on 13.11.2017 and raised an objection regarding the non-joinder of Government of Tamil Nadu as a party, which according to NHAI was a necessary party.
10. On 19.01.2018, the Arbitral Tribunal observed that the parties were free to adopt such course of action for common arbitration by mutual consent but directed that the arbitration would proceed. Although, NHAI Signature Not Verified Digitally Signed By:DUSHYANT RAWAL was required to file its affidavit of admission / denial of documents along with its Statement of Defence but it had not done so and, on 19.01.2018, the Arbitral Tribunal granted further two weeks' time to NHAI to file its affidavit of admission / denial of documents. The next date of hearing was fixed on 05.03.2018. However, the hearing fixed on that date was cancelled as the mandate of the Arbitral Tribunal had expired on 27.02.2018.
11. Thereafter, NHAI filed a petition under Section 29A of the A&C Act [OMP (MISC)(COMM) No. 221/2018]. The said petition was listed before this Court on 11.09.2018 and with the consent of the parties, this Court passed a consent order dated 11.09.2018 thereby allowing the aforesaid petition and extending the time for completion of the arbitral proceedings for a further period of twelve months with effect from 11.09.2018.
12. It is stated that the Arbitral Tribunal held a hearing on 09.10.2018. The said hearing was more or less ineffective and in the said hearing, the only effective direction passed by the Arbitral Tribunal was for NHAI to place an amended authorization in view of change of the Project Director.
13. The pleadings were completed on 09.11.2018.
14. The Arbitral Tribunal directed the parties to narrow down the list of denied documents and furnish the same. The said exercise took some time and although the Arbitral Tribunal held hearings on 11.11.2018 and 05.12.2018, there was no significant progress in the arbitral proceedings.
15. The Arbitral Tribunal held the next hearing on 20.12.2018 and on that date, TTEL submitted its list of witnesses and also agreed to file evidence by way of affidavits of its first two witnesses by 03.01.2019 and of the third witness by 10.09.2019. Accordingly, the Arbitral Tribunal prepared a Signature Not Verified Digitally Signed By:DUSHYANT RAWAL schedule for examination and cross-examination of witnesses on behalf of TTEL and the hearings for the said purposes were scheduled on 18.01.2019, 22.01.2019 and 23.01.2019. However, the hearings so fixed were cancelled at the request of the learned counsel for NHAI.
16. The next hearing of the Arbitral Tribunal was held on 02.03.2019 and, on that date, NHAI filed additional documents. These documents were filed after TTEL's witnesses had filed their evidence by way of affidavits. TTEL has a grievance as the said additional documents were taken on record without recording the objections raised by it in that regard and without examining the relevancy or justification for filing the additional documents.
17. The cross-examination of TTEL's witness [CW-2] was concluded on
02.05.2019 and the examination of TTEL's third witness [CW-3] commenced on that date.
18. According to TTEL, the cross-examination of its witness was inordinately prolonged and continued through the hearings held on 03.05.2019, 04.05.2019, 30.05.2019, 31.05.2019, 23.06.2019 but were not completed.
19. TTEL is also aggrieved as the Arbitral Tribunal had permitted one techno-legal counsel to cross-examine it's witnesses even though the examination was conducted by NHAI's advocate. TTEL's objection in this regard was not recorded by the Arbitral Tribunal and therefore, on 11.07.2019, TTEL filed an application seeking deletion of the cross- examination conducted by the techno-legal expert.
20. The cross-examination of TTEL's witness continued further for the next three days as well. Thus, in all, NHAI had taken nine days to complete Signature Not Verified Digitally Signed By:DUSHYANT RAWAL the cross-examination of TTEL's witness.
21. TTEL states that after its evidence was concluded, NHAI filed its evidence by way of affidavit on 10.07.2019 and it also filed a supplementary affidavit dated 09.08.2019, whereby it sought to place on record additional documents running into more than 749 pages.
22. TTEL is also apprehensive regarding filing of the said documents as the reasons given by NHAI for placing on record the additional documents is stated to be pursuant to oral discussion with the Arbitral Tribunal. TTEL claims that no such oral discussion took place in the presence of its representative or during the course of hearings.
23. TTEL states that it had raised objections regarding submission of the supplementary affidavit, however, the said objections were not decided and yet, TTEL was directed to cross-examine NHAI's witness.
24. It is stated that further hearings were fixed for 16.08.2019, 17.08.2019 and 18.08.2019, however, the cross-examination of NHAI's witness [RW-1] could not be concluded and the objections raised by TTEL were also not decided. Further sitting of the Arbitral Tribunal was scheduled on 05.09.2019 but the same was adjourned as the Presiding Arbitrator was travelling overseas. Further hearings did not taken place as the mandate of the Arbitral Tribunal had expired.
25. Mr. Chaturvedi, learned counsel appearing for TTEL, contended that there is no possibility of the arbitral proceedings being concluded in a timely manner because the matter being placed before the Arbitral Tribunal is of a complex nature and as the members of the Arbitral Tribunal are not of a judicial background, they will not be able to decide the same expeditiously.
Signature Not Verified Digitally Signed By:DUSHYANT RAWAL26. Mr. Chaturvedi further contended that in the aforesaid circumstances, the Arbitral Tribunal was required to be substituted by a former Judge or by an arbitrator having judicial expertise. He submitted that this Court had, on earlier occasions, also substituted an arbitrator where it found that the arbitral proceedings may not be concluded for want of requisite expertise/competency of the arbitral tribunal to deal with the complex issues being raised.
27. Mr. Kumar, learned counsel appearing for NHAI, stoutly, contested the TTEL's claim for substitution of the Arbitral Tribunal. He assured the Court that the arbitral proceedings will be concluded within a period of six month and further, stated that the delays were not attributable to the Arbitral Tribunal.
28. This Court has examined the record placed before it. It is apparent that the arbitral proceedings have been inordinately delayed and the reasons for the same are, to a large extent, attributable to NHAI. First of all, NHAI had delayed the completion of pleadings. Resultantly, the Arbitral Tribunal could not hold any of the nine hearings that it had scheduled in the months of September and October, 2017. NHAI had sought to produce additional documents at a much belated stage. The Arbitral Tribunal is also required to examine whether the production of such additional documents at a belated stage was permissible or otherwise justified.
29. Having stated the above, this Court is of the view that it would not be apposite to change the constitution of the Arbitral Tribunal at this stage. TTEL has certain grievances regarding the Arbitral Tribunal not recording its objections and ruling on the same; however, the same does not warrant Signature Not Verified Digitally Signed By:DUSHYANT RAWAL change in the constitution of the Arbitral Tribunal at this stage. It is seen that the Arbitral Tribunal has held numerous hearings and is otherwise diligent in its endeavour to conclude the arbitral proceedings expeditiously. The grievance of TTEL regarding the manner in which its objection has been dealt with, do not warrant substitution of the Arbitral Tribunal notwithstanding the fact that some of the grievances may have merit. It is material to note that both the parties had consciously chosen to nominate Civil Engineers, who did not have judicial background, as their nominee Arbitrators. Clearly, TTEL cannot now be heard to state that the Arbitral Tribunal should be substituted as the Arbitrators have no judicial expertise/experience.
30. This Court, at this stage, is not required to examine TTEL's grievance regarding the procedure adopted by the Arbitral Tribunal. The objections, if any, are required to be considered only after the arbitral award has been rendered.
31. In view of the assurances given by Mr. Kumar, learned counsel appearing for NHAI, that the arbitral proceedings will be concluded within a period of six months, this Court considers it apposite to extend the mandate of the Arbitral Tribunal for the said period.
32. Accordingly, the time for the Arbitral Tribunal to make the award is extended for a period of six months with effect from 18.11.2021 to 17.04.2022. The period from 10.09.2019 till date is also regularized.
Signature Not Verified Digitally Signed By:DUSHYANT RAWAL33. The petition is allowed in the aforesaid terms. All pending applications are also disposed of.
VIBHU BAKHRU, J NOVEMBER 18, 2021 'gsr' Click here to check corrigendum, if any Signature Not Verified Digitally Signed By:DUSHYANT RAWAL