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Showing contexts for: arbitration act section 12 in Harpeet Singh Chhabra vs Mrs Suneet Kaur Sahney on 7 September, 2018Matching Fragments
16) Coming to the facts in issue. As stated by us earlier, the present C.R.P. came to be filed questioning the order of the Commercial Court terminating the mandate of the Arbitrator on the ground that arbitration proceedings were not completed within the time fixed by the High Court in the review petition.
17) For the sake of convenience the parties will hereinafter referred to as arrayed in C.O.P.No.81 of 2017.
18) An application under Section 14 (2) and Section 15 of the Arbitration Act, came to be filed by the petitioners therein and respondents herein seeking to terminate the mandate of the 6th respondent therein (8th respondent herein) on the ground that he has become de jure and de facto, unable to perform his functions and failed to act without un-due delay. Petitioners 6 and 7 are companies registered under the Companies Act, 1956, organized and controlled by the family of petitioner Nos.1 to 3. Petitioner No.5 is a partnership entity. Petitioner No.1 is the wife of petitioner No.3 and mother of petitioner No.4 and petitioner No.2 is the mother of petitioner No.3. During the years 2007-2010, the petitioners lent a sum of Rs.20.00 crores to the respondents. As the said amount was not returned, the petitioners filed suits for recovery of money and also a complaint under Section 138 of the Negotiable instrument Act. It is said that as a counter blast, the respondents got registered a Criminal Case vide Cr.No.59 of 2012, against the petitioners. In the said case, petitioners 3 and 4 were arrested by the Central Crime Station, Hyderabad and while in custody they were forced to agree to pay a sum of Rs.9.00 crores to the respondent. Under duress and force, the petitioners are alleged to have signed the settlement deed dated 30.04.2012, letter of guarantee dated 30.04.2012 and ratification deed dated 03.05.2012. It is said that the petitioners were not allowed to read the contents of the documents, which they signed and they were not aware about the contents, including the appointment of the arbitrator. It is said that only after their release on bail, they were able to read the contents of the documents signed by them, were shocked to learn about the appointment of an arbitrator. As such, an application under Section 11 (5) and (6) of the Arbitration Act, came to be filed questioning the appointment of arbitrator, which was dismissed by this Court on 15.03.2013. A Review application came to be filed, which was also dismissed on 13.09.2013. The learned arbitrator issued notices dated 25.07.2012 and passed orders on 15.03.2013 and 13.09.2013 initiating arbitration proceedings. On 23.02.2014, an application under Section 12 of the Arbitration Act came to be filed before the sole Arbitrator, to direct the Arbitrator to withdraw himself from the proceedings with immediate effect on the ground of "bias". Pending application under Section 12 of the Arbitration Act, the petitioners filed S.L.P. (Civil) Nos, 14146 and 14147 of 2014 before the Hon'ble Supreme Court against the orders passed in Arbitration Application No.54 of 2012 and Review Application No.493 of 2013.
24) It is further pleaded that in the S.L.P., filed before the Hon'ble Supreme Court, assailing the order passed in Review Application and in Arbitration Application No.54 of 2012, the petitioners have specifically pleaded in ground No.'S', that the Hon'ble High Court was not correct in directing the arbitrator to conclude the proceedings within a period of five months, as the issue is complicated and that the Arbitrator would require more time to adjudicate the dispute. That being so, whether it is permissible for the respondents herein now to contend that the proceedings before the Arbitrator stand terminated, as he failed to complete the proceedings within the time fixed. It is further urged that in the petition filed under Section 12 of the Arbitration Act, the petitioners never raised any objection with regard to undue delay. Their main plea before the Arbitrator was of 'bias'. It is further urged that though Section 14 (1) of the Arbitration Act provides for termination of the mandate of the arbitrator in the event the arbitrator unable to act without undue delay but not in a case where the delay was at the instance of a party to the proceedings. In support of the said plea taken, learned counsel for the petitioners relies upon the following citations.
coupled with the judgment of the Apex Court in B.C.C.I. (14 supra) the counsel would contend that since C.O.P.No.81 of 2017 was filed under Section 14 (1) of the Arbitration Act on 11.04.2016, after coming into effect of the Arbitration and Conciliation Act, 2015, the amended Act shall apply to the present case as well and in view of Section 12 (5) of the Arbitration Act read with 7th schedule of the Amended Act, the Arbitrator is de jure disqualified.
28) Having regard to the arguments advanced by both the counsel, it would be necessary to go into the events which took place prior to the order passed in Arbitration Application No.54 of 2012. By an order dated 15.03.2013, this Hon'ble High Court in Arbitration Application No.54 of 2012 passed the following order:
33) It is also to be observed here that this plea was not raised in the application filed under Section 12 of the Arbitration Act and also in the amendment sought to Section 12 application.
34) The narration of events, which are undisputed till now, go to show that though the period of five months elapsed, but the party, who is raising the objection now, participated in the said proceedings without raising their finger on this aspect. The proceedings referred to till now, more particularly the order in Arbitration Application No.54 of 2012 and Review Application No.494 of 2013, makes it very clear that both the parties have consented for appointment of Sri Ravinder Singh Sarma, as an arbitrator and the parties also did not dispute the contents of arbitration agreement, or in words their plea with regard to appointment of an arbitrator has become final long back.