The Supreme Court recently comprising of a division bench of Justices MR Shah and BV Nagarathna while expressing displeasure over the time taken by the Telangana High Court to dispose of an arbitration application u.s 11 of the Arbitration and Conciliation Act of 1996 remarked, "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 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 directed the Registrar General of Telangana HC to file details regarding the Section 11 application pending before it and the same should be submitted by April 19.
Facts of the case
An appeal was filed before the Supreme Court against a Telangana HC order for appointing an arbitrator. The High Court had further said that these directions should be placed before the Telangana HC Chief Justice.
Pursuant to the courts earlier order dated 01.04.2022, the Registrar General of the High Court for the State of Telangana at Hyderabad has submitted a report along with the statement of arbitration applications pending before the High Court.
Issue before the Court
Whether the Arbitration & Conciliation (Amendment Act), 2015 viz. a viz. Section 11(6) of the Arbitration & Conciliation Act, 1996 (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.
Courts Observation and Judgment
The bench taking note of the delay noted that if the Section 11 application is not decided within a year, the purpose of the arbitration would be frustrated.
The bench taking note of the same remarked, "Therefore, before any direction is issued by this Court to the High Courts, we direct the Registry to call the statement/particulars with respect to the pending applications under Section 11(6) of the Arbitration Act from all the High Courts so as to reach this Court on or before 6th May, 2022. We direct the Registry of all the High Courts to send the statement to the Registry of this Court on or before 6th May, 2022."
The bench listed the matter for further hearing on 9th May, 2022.
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