Andhra Pradesh High Court - Amravati
M/S.K.V.Ramana Reddy vs Manish on 4 January, 2023
IN THE HIGH COURT OF ANDHRA PRADESH AT
AMARAVATI
***
I.A.No.2 of 2022
IN
ARBITRATION APPLICATION No.50 of 2018
Between:
M/s.K.V.Ramana Reddy,
A Partnership Firm registered
under the provisions of the Indian Partnership Act, 1932
having its registered office at D.No.31-19-3/2,
Kurmannapalem Post, Visakhapatnam
Represented by its Managing Partner
Mr.K.V.Ramana Reddy.
... Petitioner/Claimant
And
$ 1. Rasthriya Ispat Nigam Limited,
Visakhapatnam Steel Plant, Visakhapatnam,
A Public Sector Undertaking,
Having its registered office at Main Administrative Building,
Visakhapatnam Steel Plant, Visakhapatnam
Rep.by its Chairman &
Managing Director. ... Respondent/Respondent
2. Hon'ble Mr.Justice M.Jagannadha Rao,
Former Judge, Hon'ble Supreme Court of India,
H.No.3.6.281/B, Second Floor, Above State Bank of India,
Old MLA Quarters Branch, Hyderguda,
Himayat Nagar,
Hyderabad-500029 ...Respondent/Presiding Arbitrator
3. Hon'ble Mr.Justice Anil R.Dave,
Former Judge, Hon'ble Supreme Court of India,
K 118, Huaz Khas Enclave,
New Delhi-110016. ...Respondent/Arbitrator
2
4. Hon'ble Mr.S.V.S.Prasada Rao, Advocate,
Sai Nilayam, Flat No.01,
Prince Apartment Complex-14,
Chinna Waltair,
Visakhapatnam-530017. ...Respondent/Arbitrator
Date of Judgment pronounced on : 04-01-2023
HON'BLE SRI JUSTICE R. RAGHUNANDAN RAO
1. Whether Reporters of Local newspapers : Yes/No
May be allowed to see the judgments?
2. Whether the copies of judgment may be marked: Yes/No
to Law Reporters/Journals:
3. Whether the Lordship wishes to see the fair copy: Yes/No
Of the Judgment?
3
*IN THE HIGH COURT OF ANDHRA PRADESH AT
AMARAVATI
* HON'BLE SRI JUSTICE R. RAGHUNANDAN RAO
+ I.A.No.2 of 2022
IN
ARBITRATION APPLICATION No.50 of 2018
% Dated: 04-01-2023
M/s.K.V.Ramana Reddy,
A Partnership Firm registered
under the provisions of the Indian Partnership Act, 1932
having its registered office at D.No.31-19-3/2,
Kurmannapalem Post, Visakhapatnam
Represented by its Managing Partner
Mr.K.V.Ramana Reddy.
... Petitioner/Claimant
And
$ 1. Rasthriya Ispat Nigam Limited,
Visakhapatnam Steel Plant, Visakhapatnam,
A Public Sector Undertaking,
Having its registered office at Main Administrative Building,
Visakhapatnam Steel Plant, Visakhapatnam
Rep.by its Chairman &
Managing Director. ... Respondent/Respondent
2. Hon'ble Mr.Justice M.Jagannadha Rao,
Former Judge, Hon'ble Supreme Court of India,
H.No.3.6.281/B, Second Floor, Above State Bank of India,
Old MLA Quarters Branch, Hyderguda,
Himayat Nagar,
Hyderabad-500029 ...Respondent/Presiding Arbitrator
3. Hon'ble Mr.Justice Anil R.Dave,
Former Judge, Hon'ble Supreme Court of India,
K 118, Huaz Khas Enclave,
New Delhi-110016. ...Respondent/Arbitrator
4
4. Hon'ble Mr.S.V.S.Prasada Rao, Advocate,
Sai Nilayam, Flat No.01, Prince Apartment Complex-14,
Chinna Waltair,
Visakhapatnam-530017. ...Respondent/Arbitrator
! Counsel for Petitioner : Sri C.Sumon
^Counsel for Respondents : --
<GIST :
>HEAD NOTE:
? Cases referred:
1
2022 SCC Online ALL 150
2
2019 SCC Online Bom 1437
3
2020 (269) DLT 373
4
2021 SCC Online Ori 928
5
2018(1) Ker LJ 55
6
2019(2) GLR 1537
7
2014(0) Supreme (SC) page 180
8
2015(1)SCC page 32
9
2018(2)SCC page 602
5
THE HON'BLE SRI JUSTICE R.RAGHUNANDAN RAO
I.A.No.2 of 2022
IN
ARBITRATION APPLICATION No.50 of 2018
ORDER:
By an order dated 20.09.2018, directions for
appointment of arbitrators were passed in ARB. APPL.
No.50 of 2018. An Arbitral Tribunal was constituted on the
basis of the said directions and the Arbitral Tribunal
entered reference on 27.10.2018. Thereafter, the Tribunal
commenced hearings in the matter. As the proceedings
could not be completed within a period of one year, parties
to the arbitration extended the period of arbitration by six
months. As further time was required for completion of the
arbitral proceedings, CAOP.No.6 of 2020 was filed before
the Special Judge for Trial and Disposal of Commercial
Disputes, Visakhapatnam, under Section 29A of the
Arbitration and Conciliation Act, 1996, (hereinafter referred
to as the Act) for extension of time. The application was
allowed, on 27.11.2020, extending the mandate of the
Arbitral Tribunal for a period of six months. Thereafter
CAOP. No. 5 of 2021 was filed for further extension of time.
It must be noted that respondent No.1 herein had raised an
objection, before the Commercial Court that an application
under Section 29(A) of the Act, for extension of time can
only be filed before the High Court and such an application
would not be maintainable before the Commercial Court.
After hearing both sides on this issue, the Commercial
Court had taken the view that the application would be
maintainable before the Commercial Court and extended
the mandate of the Arbitral Tribunal.
2. The petitioner, in Arbitration Application No.50 of
2018, has now moved this Court for extension of the
mandate of the Arbitral Tribunal from 01.03.2022 to
28.02.2023 under Section 29(A)(5) of the Act.
3. On a perusal of the grounds set out in the
application, for extension of time of the mandate of the
Arbitral Tribunal, this Court is of the opinion that extension
of the mandate of the Arbitral Tribunal is required. The
impact of the intervening Covid pandemic; the
hospitalization of one of the Hon'ble Arbitrators on account
of a brain stroke and consequential surgery and the large
amount of material and pleadings placed before the Arbitral
tribunal are sufficient reasons for extension of the mandate
of the Arbitral Tribunal.
4. However, the question of whether the application
under Section 29(A) of the Arbitration and Conciliation Act
is to be filed before the High Court or before the
Commercial Court would still remain.
5. The Hon'ble High Court of Allahabad in Indian
Farmers Fertilizers Cooperative Ltd., vs. Manish
Engineering Enterprises1, the Hon'ble High Court of
Bombay in Cabra Instalaciones Y. Servicios vs.
Maharashtra State Electricity Distribution Company
Limited2, Hon'ble High Court of Delhi in DDA vs. M/s Tara
Chand Sumit Construction Co.,3 the Hon'ble High Court
of Orissa at Cuttak in Liladitya Deb vs. Tara Ranjan
Pattanaiak and Another4, the Hon'ble High Court of Kerala
in URC Construction (Private) Ltd vs. BEML Ltd 5and the
Hon'ble High Court of Gujarat in Nilesh Ramanabhai Patel
vs. Bhanubhai Ramanbhai Patel6 have held that an
application under Section 29(A) of Arbitration and
2022 SCC Online ALL 150
2019 SCC Online Bom 1437
2020 (269) DLT 373
2021 SCC Online Ori 928
2018(1) Ker LJ 55
2019(2) GLR 1537
Conciliation Act can only be moved before the Court which
would have authority, under Section 11 of the Arbitration
and Conciliation Act, to appoint an arbitrator in the case
and consequently it would only be either the High Court or
the Hon'ble Supreme Court, as the case may be, before
whom such applications can be moved.
6. The Commercial Court while dealing with this
issue in CAOP.No.5 of 2021 had taken into account, the
Judgments of the Hon'ble Supreme Court in Lalit Kumar
V.Sanghavi (D) Th.LRs Neeta lalit Kumar Sanghavi and
Another vs. Dharmdas V.Sanghavi and Others7, State of
West Bengal vs. Associated Contractors8and State of
Jharkhand vs. Hindustan Construction Company Ltd.,9
wherein the Hon'ble Supreme Court had taken the view that
the expression "Court" as defined in Section 2(1)(a) of the
Arbitration and Conciliation Act can only mean the
Principal Civil Court of original jurisdiction in a District or a
High Court having civil jurisdiction in the State.
7. Section 29 A, reads as follows:
29A.Time limit for arbitral award:
2014(0) Supreme (SC) page 180
2015(1)SCC page 32
2018(2)SCC page 602
(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 endeavor 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.
(2) If the award is made within a period of six
months from the date the arbitral tribunal enters
upon the reference, the arbitral tribunal shall be
entitled to receive such amount of additional fees as
the parties may agree.
(3) The parties may, by consent, extend the period
specified in sub-section (1) for making award for a
further period not exceeding six months.
(4) If the award is not made within the period
specified in sub-section (1) or the extended period
specified under sub-section (3), the mandate of the
arbitrator(s) shall terminate unless the Court has,
either prior to or after the expiry of the period so
specified, extended the period: Provided that while
extending the period under this sub-section, if the
Court finds that the proceedings have been delayed
for the reasons attributable to the arbitral tribunal,
then, it may order reduction of fees of arbitrator(s) by
not exceeding five per cent for each month of such
delay. 3 [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 fees is
reduced.
(5) The extension of period referred to in sub-section
(4) may be on the application of any of the parties
and may be granted only for sufficient cause and on
such terms and conditions as may be imposed by
the Court.
[
(6) While extending the period referred to in sub-
section (4), it shall be open to the Court to substitute
one or all of the arbitrators and if one or all of the
arbitrators are substituted, the arbitral proceedings
shall continue from the stage already reached and
on the basis of the evidence and material already on
record, and the arbitrator(s) appointed under this
section shall be deemed to have received the said
evidence and material.
(7) In the event of arbitrator(s) being appointed
under this section, the arbitral tribunal thus
reconstituted shall be deemed to be in continuation
of the previously appointed arbitral tribunal.
(8) It shall be open to the Court to impose actual or
exemplary costs upon any of the parties under this
section.
(9) An application filed under sub-section (5) shall be
disposed of by the Court as expeditiously as possible
and endeavour shall be made to dispose of the
matter within a period of sixty days from the date of
service of notice on the opposite party.
8. Section 29 A (6) provides for substitution of the
one or all the Arbitrators. This would effectively mean
appointment of Arbitrator(s). Such power, under Section 11 of
the Act, is vested in the High Courts or the Supreme Court
alone. This would require that an application for extension of
time for the Arbitral tribunal can only be filed before the High
Court or the Supreme Court, as the case may be.
9. All the High Courts, in the Judgments mentioned
above, had taken the same view that the Court, before whom
an application for extension of time is filed, would also have,
in view of section 29 A (6) of the Act, the power to replace the
existing arbitral by appointing a new arbitrator. In view of this
provision, the principle laid down in all the Judgments was
that an application under Section 29(A) can be moved only by
the Court having authority under Section 11 of the Arbitration
and Conciliation Act, to appoint arbitrators and consequently
it can only be the High Court or the Hon'ble Supreme Court,
as the case may be, before whom an application for extension
of time can be moved under section 29 A of the Act.
10. The Judgments relied upon by the Commercial
Court Judge, are cases in which the Hon'ble Supreme Court
was considering the definition of "Court" as set out in Section
2(1)(a). The effect of Section 29(A) of the Arbitration and
Conciliation Act was not before the Hon'ble Supreme Court in
these cases. In the light of the above discussion, it must be
held that it is only this Court which would have jurisdiction
and authority to extend the period of the mandate of the
Arbitral Tribunal and the same cannot be undertaken by the
Commercial Court.
11. Accordingly, this application is allowed, extending
the mandate of the Arbitral Tribunal, from 01.03.2022 to
28.02.2023. There shall be no order as to costs.
Miscellaneous petitions, pending if any, shall stand
closed.
___________________________________
JUSTICE R.RAGHUNANDAN RAO
Date :04.01.2023
RJS
THE HON'BLE SRI JUSTICE R.RAGHUNANDAN RAO
I.A.No.2 of 2022
in
ARBITRATION APPLICATION No.50 of 2018
Date : 04.01.2023
RJS
