The Supreme Court has directed all the High Courts to submit details of applications pending before them under Section 11(6) of Arbitration and Conciliation Act after taking note of long pendency in these matters.
The Division Bench of Justice MR Shah and Justice BV Nagarathna while dealling with an SLP observed that if the applications under Section 11(6) of the Arbitration Act are not decided at the earliest and within reasonable time, more particularly within one year from the date of filing, the object and purpose of the Arbitration Act shall be frustrated.
The Court took note of the the report filed by the Registrar General of the High Court for the State of Telangana at Hyderabad along with the statement of arbitration applications pending before the High Court.
The Court was shocked to find that even the petition filed in the year 2006 is still reported to be pending and couldn't think of a possible reason for justification. It also emerges from the statement that many applications under Section 11(6) of the Arbitration Act are pending since more than one year, the Court stated.
As per Court, the statement showed that in many cases, the applications are pending “for orders” or “for judgment” or “for disposal”.
"In the present case itself, the application under Section 11(6) of the Arbitration Act was filed in the year 2016 and it took four years for the High Court to decide the application under Section 11(6) of the Arbitration Act and after a period of four years now the application has been dismissed. "
The Court stressed that purpose of the Act should be considered and hounoured and directed that all endeavors shall be made by the courts to decide and dispose of the applications for appointment of arbitrator within a period of six months.
"Even otherwise under the Commercial Courts Act, the commercial disputes are required to be disposed of within a period of one year. Even under the Arbitration (Amendment) Act, 2015, the arbitrator is required to dispose of the arbitral proceedings within a period of one year. Therefore, if the applications under Section 11(6) of the Arbitration Act are not Even otherwise under the Commercial Courts Act, the commercial disputes are required to be disposed of within a period of one year. Even under the Arbitration (Amendment) Act, 2015, the arbitrator is required to dispose of the arbitral proceedings within a period of one year. Therefore, if the applications under Section 11(6) of the Arbitration Act are not."
The Court anticipated that similar sitaution must have been faced by other High Courts as well. Therefore, before issuing instructions, it sought details.
The question of law posed for the consideration of Court in the matter was whether the Arbitration & Conciliation (Amendment Act), 2015 viz. a viz. Section 11(6) of the Arbitration & Conciliation Act, 1996 shall be made applicable, in relation to the arbitral proceedings commenced before the Court or the issuance of the notice or in a case where the notice invoking the arbitration is issued prior to the Amendment Act, 2015 the Old Act shall be applicable or the New Act?
The Court noted that there are divergent views on the issue and cited Board of Control for Cricket in India Vs. Kochi Cricket Pvt. Ltd. and Etc, 2018 Latest Caselaw 183 SC, ‘Union of India Versus Parmar Construction Company’, UNION OF INDIA vs. PRADEEP VINOD CONSTRUCTION CO., 2019 Latest Caselaw 1107 SC.
It pointed out that in the case of Parmar Construction Company (supra) the earlier decision in the case of BCCI (supra) was not noticed and even it was not brought to the notice of this Court. In the case of Pradeep Vinod Construction Company (supra) a three Judge Bench of this Court had considered the decision in Parmar Construction Company (supra) only and again the contrary decision of this Court in the case of BCCI(supra) was not noticed and/or again not brought to the notice of the Court.
Keeping in view, this chronology of events, the Court observed that the matter needs detailed considerations.
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