Bombay High Court
Sheela Chowgule Rep By Poa Yalamanchili ... vs Vijay V. Chowgule And 32 Ors on 7 August, 2024
Author: M. S. Karnik
Bench: M. S. Karnik
2024:BHC-GOA:1275-DB
2024:BHC-GOA:1275-DB
WP-88-2024.doc
IN THE HIGH COURT OF BOMBAY AT GOA
WRIT PETITION NO. 88 OF 2024
Sheela Chowgule, H. No.34, Lengkok, Gopeng,
Age 65 yrs., Tamangolf, Ipoh 31350, West
Malaysia Represented By its Poa Holder,
Yalamanchili Laxman Rao, Residing At Balaji
Nagar, Arilova, Visakhapatnam, Andhra
Pradesh 530040. ...... Petitioners
Versus
1. Vijay V. Chowgule, Chowgule House, Baina,
Vasco Da Gama, Goa-403 802.
2. Umaji V. Chowgule, Regina Mundi Road,
Airport Road, Chicalim, Vasco Da Gama-
403711.
3. Ashok V. ChowguleKanchanjunga, 5th
Floor, Peddar Road, Kemps Corner, Mumbai-
400026.
4. Padma V. Chowgule, 91, Advent 9th Floor,
Gen. JagannathraoBhosale Marg, Mumbai-
400021.
5. Daulatrao Chowgule, 60/61, Alto Mangor,
Vasco da Gama, Goa-403802.
6. Jagdeep Chowgule, "Chowgule House", H.
No. 273, Airport Road, Chicalim, Goa - 403
711.
7. Jaywant Chowgule, "Villa Chowgule",
Airport Road, Chicalim, Goa- 403 711.
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8. Vidya Vernekar, r/o H.No. 424, Ward No.
12, St. Joaquim Road, Borda, Margoa,
Goa. Presently c/o Mr. Jaywant Yeshwantrao
Chowgule, residing at "Villa Chowgule",
Airport Road, Chicalim, Goa- 403711.
9. Chowgule & Company Pvt. Ltd, Registered
Office: Chowgule House, Mormugao Harbour,
Goa
10. Chowgule & Company (Salt) Pvt. Ltd.
Registered Office: Chowgule House,
Mormugao Harbour, Goa.
11. Dolphin Extrusions Pvt Ltd, Registered
Office: Chowgule House, Mormugao Harbour
Goa.
12. Dolphin Ore Extraction Pvt Ltd,
Registered Office: Chowgule House,
Mormugao Harbour Goa.
13. Dolphin Mining Services Pvt Ltd,
Registered Office: Chowgule House,
Mormugao Harbour Goa
14. Sarita P. Shirke, Coombe Edge,
Sunninghill Road, Windleshem, Surrey Gu 20
6 PP UK
15. Rohini V. Chowgule, Chowgule House,
Baina, Vasco Da Gama, Goa-403 802
16. Sulakshana Suresh Chowgule, Flat No.
181, 8th Floor, Jolly Maker Apartments No. 3,
Cuffe Parade, Colaba, Mumbai -400 005
17. Nikhilesh Suresh Chowgule, Flat No. 181,
8th Floor, Jolly Maker Apartments No.3, Cuffe
Parade, Colaba, Mumbai-400 005
18. Akhilesh Suresh Chowgule, Flat No. 181,
8th Floor, Jolly Maker Apartments No. 3, Cuffe
Parade, Colaba, Mumbai - 400 005
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19. Ramesh L. Chowgule, 678, La Citadel
Colony, Donapaula, Goa-403711
20. Satish L. Chowgule 829, Ambu Sadan,
Vaccine Depot Road, Belgaum Tikwadi,
Hukari, Belgaum, Karnataka-590 006
21. Bharati Naik, 25/1, Hondwaddo,
Betalbatim Goa 403713
22. Mrs. Surekha Dilip Chowgule, "Shefali",
S.no 132-B, Plot no. 4, Building No. 1, Flat no.
5 ICS Colony, Pune- 411007
23. Ms. Girija Dilip Chowgule, "Shefali", S.no
132-B, Plot no. 4, Building No. 1, Flat no. 5 ICS
Colony, Pune-411007
24. Santosh L. Chowgule, "Embassy Eros",
Flat No. 007, No. 7, Ulsoor Road, Bangalore
560 042.
25. JagdishChowgule, "Chowgule House" H.
No.273 Airport Road, Chicalim, Goa-403 711.
26. Chowgule Steamship Limited Chowgule
House, Mormugao Harbour Goa- 403803.
27. Jaigad Logistics Private Limited
Plot No. C-221, MIDC, Mrijole Ratnagiri-415
639.
28. Chowgule Construction Technologies
Private Limited 503 Gabmar Apartments,
Vasco-Da Gama, Goa 403802.
29. Chowgule Construction Chemical Private
Limited, 503 Gabmar Apartments, Vasco-Da
Gama, Goa 403802.
30. Kolhapur Oxygen and Acetylene Private
Limited 503 Gabmar Apartments, Vasco-Da
Gama, Goa 403802.
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31. Chowgule Ship Building Private Limited,
503 Gabmar Apartments, Vasco-DaGama, Goa
403802.
32. Angre Port Private Limited, 4th Floor,
Bakhtawar, Nariman Point Mumbai-400 021.
33. Fibroplast Marine Private Limited, No. 2
GabmarAppts, Vasco Da Gama, Goa-403 802. ...... Respondents
-----------------------------------------
Mr. Pawan Jhabakh, Advocate with Mr. Gajendra Kanekar and
Mr. Aniket S. Kunde, Advocate for the Petitioners.
Mr. Parag Rao, Advocate with Ms. Sowmya Drago, Mr. Ajay
Menon and Mr. Akhil Parrikar, Advocate for Respondent nos. 1, 14 to
16 and 18 to 33.
Mr. Pulkit Bandodkar, Advocate with Mr Rahul Mantri and Ms
Angali Kumari, Advocate for the Respondent Nos. 2, 3, 4, 5, 7 and 8.
Mr. Shailesh Redkar, Advocate for the Respondent No. 9.
----------------------------
CORAM: M. S. KARNIK &
VALMIKI MENEZES, JJ.
RESERVED ON : 1st AUGUST 2024
PRONOUNCED ON : 7th AUGUST 2024
JUDGMENT (Per M. S. Karnik, J.)
The Reference :
1. The learned Single Judge was not in agreement with the view
taken by another learned Single Judge in Mormugao Port Trust vs.
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Ganesh Benzoplast Ltd.1 and as the same was contrary to the
decision of this Court in K.I.P.L. Vistacore Infra Projects J. V.
Municipal Corporation of the city of Ichalkaranji 2 and hence
thought it fit to refer the matter to a larger bench. The reference is
made on the following questions :
(i) In the event an Arbitral Tribunal constituted by
the High Court under Section 11(6) fails to complete
the proceedings within the stipulated period/
extended period, where an application under Section
29-A(4) would lie i.e. the High Court or the Civil Court
having original jurisdiction in case of a domestic
arbitration ?
(ii) In the event an Arbitral Tribunal consisting of
three Arbitrators is constituted as per Section 11(2)
i.e. with agreement and consent of the parties, fails to
complete the proceedings within the stipulated
period/extended period, where an application under
Section 29-A(4) would lie i.e. before the High Court
or the Civil Court having original jurisdiction in the
case of domestic arbitration ?
2. Shri Parag Rao, learned Counsel for the respondents submitted
that it may now not be necessary to answer the reference in view of the
decision of the Supreme Court in Chief Engineer (NH) PWD
1 Writ Petition No.3/2020 decided on 15.01.2020
2 2024 SCC Online Bom 327
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(Roads) vs. M/s. BSC & C and C JV3. It is submitted that after the
decision in Chief Engineer (NH) PWD (Roads) (supra) was
brought to the notice of the learned Judge who had made the
reference, the learned Judge in Marcelina Fernandes & Ors. vs.
Green Valley Realtors4 held that in view of the observations of the
Supreme Court, the Principal Civil Court of original jurisdiction in the
district is the Court of Principal District Judge, South Goa, Margao.
Shri Rao, therefore submitted that the issued is now well settled.
3. On a reading of the decision of the Supreme Court in Chief
Engineer (NH) PWD (Roads) (supra), we did carry an impression
that the reference could be answered in terms of the Supreme Court's
order as it seems squarely covered by such decision. We find it
apposite to reproduce the order in Chief Engineer (NH) PWD
(Roads) (supra), which reads thus :
"Heard the learned senior counsel appearing for the
petitioner. Section 29A of the Arbitration and
Conciliation Act, 1996 (for short, "the Arbitration
Act") reads thus:
"29A. Time limit for arbitral award. - (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.
3 2024 SCC OnLine SC 1801
4 2024 SCC Online Bom 2028
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Provided that the award in the matter of
international commercial arbitration may be
made as expeditiously as possible and
endeavour may be made to dispose off 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:
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.
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(6) While extending the period referred to in
subsection (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."
(underlines supplied)
The power under sub-Section (4) of Section 29A
of the Arbitration Act vests in the Court as defined in
Section 2(1)(e) of the Arbitration Act. It is the
principal Civil Court of original jurisdiction in a
district which includes a High Court provided the
High Court has ordinary original civil jurisdiction.
In this case, the High Court does not have the
ordinary original civil jurisdiction. The power under
sub-Section (6) of Section 29A is only a consequential
power vesting in the Court which is empowered to
extend the time. If the Court finds that the cause of
delay is one or all of the arbitrators, while extending
the time, the Court has power to replace and
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substitute the Arbitrator(s). The said power has to be
exercised by the Court which is empowered to extend
the time as provided in sub-Section (4) of Section 29A
of the Arbitration Act."
4. Section 29-A of the Arbitration Act is extracted in the aforesaid
decision. The Supreme Court in no uncertain terms observed that the
power under sub-section (4) of Section 29-A of the Arbitration and
Conciliation Act, 1996, vests in the Court as defined in Section 2(1)(e)
of the Arbitration Act. Their Lordships held that it is the Principal
Civil Court of original jurisdiction in the district which includes a High
Court provided the High Court has ordinary original civil jurisdiction.
In the case before the Supreme Court, the High Court did not have the
ordinary original civil jurisdiction. It is material to note that Their
Lordships observed that the power under sub-section (6) of Section
29-A is only a consequential power vesting in the Court which is
empowered to extend the time. If the Court finds that the cause of
delay is one or all of the arbitrators, while extending the time, the
Court has power to replace and substitute the Arbitrator(s). It is thus
held that the said power has to be exercised by the Court which is
empowered to extend the time as provided under sub-section (4) of
Section 29-A of the Arbitration Act. In view of the law laid down by
the Supreme Court, we thought our task is now simple and the
reference should be answered in terms of what is held by the Supreme
Court.
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5. Shri Pawan Jhabakh, learned Counsel for the petitioners,
insisted that the facts in Chief Engineer (NH) PWD (Roads)
(supra) be carefully looked into before forming any opinion. Our
attention was invited to the order passed by the learned Single Judge
of the High Court of Meghalaya at Shillong in Chief Engineer (NH)
PWD (Roads) vs. M/s. BSC & C & C JV 5 , which decision was
challenged bef0re the Supreme Court in Chief Engineer (NH)
PWD (Roads) (supra). Reference to paragraphs 19 and 20 of the
decision of High Court of Meghalaya in Chief Engineer (NH) PWD
(Roads) (supra) is necessary to understand the facts. In the case
before the Meghalaya High Court, the Arbitrators were not appointed
under Section 11 by the High Court. In that context, the learned Judge
observed that a distinction can be drawn to hold that, if the
appointment of the arbitrator is not by the High Court under Section
11, the Principal Civil Court of original jurisdiction, which is the
Commercial Court at Shillong, East Khasi Hills, will have the power to
entertain an application under Section 29-A for extension of the
terms, as no anomalous situation would arise therefrom. The learned
Judge held that as such, by making use of the expression of Section 2
of the Act, "unless the context otherwise requires" the textual
interpretation will be in tune with the contextual one. It was then held
by the learned Judge that keeping in mind the fact that the High Court
5 2024 SCC OnLine Megh 284
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of Meghalaya does not possess original Civil Jurisdiction, coupled with
the fact that Section 11 nor Section 29-A(6) do not come into play in
the present case, as the arbitrators were not appointed by the High
Court, the Commercial Court, East Khasi Hills, Shillong being the
Principal Court or original jurisdiction will have the jurisdiction to
extend the mandate as prescribed under Section 29-A of the Act.
6. We thus find that it was in a different factual context than the
one arising in the present case that the Meghalaya High Court held
that the Principal Civil Court of original jurisdiction will have the
jurisdiction to extend the mandate as prescribed under Section 29-A
of the Act and not the High Court. The Supreme Court having upheld
the judgment and order of the Meghalaya High Court, the question is
whether the decision rendered by the Supreme Court will bind us
having regard to the fact situation in the present case.
7. Faced with a dilemma, therefore, it became necessary for us to
seek guidance from the principles laid down by the Supreme Court as
to what is a ratio decidendi emanating from a decision and as to the
principles of binding precedent. The Supreme Court in
Secunderabad Club vs. Commissioner of Income-Tax 6 has
elaborately discussed the concept of ratio decidendi. It would be
useful to extensively refer to the observations made by the Supreme
6 (2023) 457 ITR 263 (SC)
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Court. Dealing with the concept of ratio decidendi, it is held to be
settled position of law that only the ratio decidendi of a judgment is
binding as a precedent. In B. Shama Rao vs. Union Territory of
Pondicherry7, it has been observed that a decision is binding not
because of its conclusion but with regard to its ratio and the principle
laid down therein. In Quinn vs. Leathem8, wherein it was observed
that every judgment must be read as applicable to the particular facts
proved, or assumed to be proved, since the generality of the
expressions which may be found there are not intended to be
expositions of the whole law, but governed and qualified by the
particular facts of the case in which such expressions are found. In
other words, a case is only an authority for what it actually decides.
According to the well settled theory of precedents, every decision
contains three basic ingredients -(i) findings of material facts, direct
and inferential. An inferential finding of fact is the inference which
the Judge draws from the direct or perceptible facts; (ii) statements of
the principles of law applicable to the legal problems disclosed by the
facts; and (iii) judgment based on the combined effect of (i) and (ii)
above. For the purposes of the parties themselves and their privies,
ingredient (iii) is the material element in the decision, for, it
determines finally their rights and liabilities in relation to the subject-
matter of the action. It is the judgment that estops the parties from
7 AIR 1967 SC 1480
8 1901 AC 495 (HL)
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reopening the dispute. However, for the purpose of the doctrine of
precedent, ingredient (ii) is the vital element in the decision. This is
the ratio decidendi. It is not everything said by a Judge when giving a
judgment that constitutes a precedent. The only thing in a Judge's
decision binding a party is the principle upon which the case is
decided and for this reason it is important to analyse a decision and
isolate from it the ratio decidendi.
8. Their Lordships further observed that in the leading case
Qualcast (Wolverhampton) Ltd. vs. Haynes9, it was laid down that the
ratio decidendi may be defined as a statement of law applied to the
legal problems raised by the facts as found, upon which the decision is
based. The other two elements in the decision are not precedents. A
judgment is not binding (except directly on the parties to the lis
themselves), nor are the findings of fact. This means that even where
the direct facts of an earlier case appear to be identical to those of the
case before the Court, the Judge is not bound to draw the same
inference as drawn in the earlier case. The legal principles guiding the
decision in a case is the basis for a binding precedent for a subsequent
case, apart from being a decision which binds the parties to the case.
Thus, the principle underlying the decision would be binding as a
precedent for a subsequent case. Therefore, while applying a decision
to a later case, the Court dealing with it has to carefully ascertain the
9 (1959) AC 743
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principle laid down in the previous decision. A decision in a case takes
its flavour from the facts of the case and the question of law involved
and decided.
9. Article 141 of the Constitution states that the law declared by the
Supreme Court shall be binding on all the Courts within the territory
of India. All Courts in India, therefore, are bound to follow the
decisions of Supreme Court. This principle is an aspect of judicial
discipline. The Supreme Court further observed that the doctrine of
binding precedent helps in promoting certainty and consistency in
judicial decisions and enables an organic development of the law
besides providing assurance to individuals as to the consequences of
transactions forming part of daily affairs. Thus, what is binding in
terms of Article 141 of the Constitution is the ratio of the judgment and
as already noted, the ratio decidendi of a judgment is the reason
assigned in support of the conclusion. The reasoning of a judgment
can be discerned only upon reading of a judgment in its entirety and
the same has to be culled out thereafter. The ratio of the case has to be
deduced from the facts involved in the case and the particular
provision(s) of law which the court has applied or interpreted and the
decision has to be read in the context of the particular statutory
provisions involved in the matter. What is binding, therefore, is the
principle underlying a decision which must be discerned in the context
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of the question(s) involved in that case from which the decision takes
its colour. In a subsequent case, a decision cannot be relied upon in
support of a proposition that it did not decide. Therefore, the context
or the question, while considering which, a judgment has been
rendered assumes significance.
10. As against the ratio decidendi judgment, an obiter dictum is an
observation by a Court on a legal question which may not be necessary
for the decision pronounced by the Court. However, the obiter dictum
of the Supreme Court is binding under Article 141 to the extent of the
observations on points raised and decided by the Court in a case.
Thus, we need to bear in mind that what is of essence in a decision is
its ratio and not every observation found therein, nor what logically
follows from the various observations made therein.
11. Keeping the aforesaid principles relating to ratio decidendi and
law of binding precedents in mind, we are of the considered opinion
that though there is a discernible ratio decidendi in Chief Engineer
(NH) PWD (Roads) vs. M/s. BSC & C and C JV (supra),
however, the decision is applicable in the facts of that case and cannot
be treated as binding precedent for the present case. While carefully
reading the order of the Supreme Court in Chief Engineer (NH)
PWD (Roads) vs. M/s. BSC & C and C JV (supra), in the light of
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the facts that have been narrated in the judgment of the Meghalaya
High Court which we have already referred to herein before, we are of
the humble view that the decision of the Supreme Court cannot be
treated as a binding precedent in the facts of the present case as the
Arbitrator was appointed by the High Court under Section 11(6) of the
Arbitration Act.
12. Let us now deal with the questions referred that fall for our
consideration. First we deal with the second question referred to us.
The answer to this question need not detain us much. The Arbitral
Tribunal constituted under Section 11(2), i.e. with agreement and
consent of parties fails to complete the proceedings within the
stipulated period/extended period, the application under Section 29-
A(4) would lie before the Principal Civil Court of original jurisdiction
in a district which includes a High Court provided the High Court has
ordinary original civil jurisdiction. The power under sub-section (6) of
Section 29-A is only a consequential power vesting in the Court which
is empowered to extend the time under Section 29-A(4). The answer
to the second question in this reference is squarely covered by the
decision of the Hon'ble Supreme Court in Chief Engineer (NH)
PWD (Roads) (supra).
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13. In answer to the first question posed for our consideration, some
basic facts of the present case need to be noticed. Initially, the arbitral
tribunal comprising of three Arbitrators came to be constituted. After
some time, the Presiding Arbitrator recused from the matter on
23.08.2022 resulting in the two Arbitrators appointing Presiding
Arbitrator, who accepted such appointment on 15.09.2022. The
extended period for passing of the award would have expired on
28.03.2023. The respondent no.1, therefore, applied for extension of
time for making of the award by the Arbitral Tribunal by a period of
six months. During the pendency of such application, the Presiding
Arbitrator resigned and as the two Arbitrators could not agree upon a
Presiding Arbitrator, an application for Appointment of Arbitrator
came to be filed before this Court by the respondent no.1. This Court
appointed a Presiding Officer vide order dated 31.10.2023. The
Arbitral Tribunal was thus reconstituted and arbitral proceedings
recommenced. By an order dated 02.07.2024, the Commercial Court
extended the period for passing of the award by the Arbitral Tribunal.
The order dated 02.07.2024 was challenged by the petitioners in this
petition.
14. This Court in Cabra Instalaciones Y. Servicios, S.A. vs.
Maharashtra State Electricity Distribution Company
Limited10 and more recently on K.I.P.L. Vistacore Infra Projects
10 2019 SCC OnLine Bom 1437
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J. V. vs. Municipal Corporation of the City of Ichalkarnji
(supra) had, inter alia, taken the view that once the Arbitrator(s) is
appointed by the High Court, the word 'Court' as mentioned in Section
29-A would have to be read as the High Court.
15. Then in Mormugao Port Trust (supra), the learned Single
Judge after referring to the scheme of the Arbitration Act and upon a
detailed analysis thereof, had taken a view that a "Court" for the
purpose of Section 29-A would be the very same Court i.e. defined
under Section 2(1)(e) i.e. either the District Court or the High Court
whenever the High Court exercises ordinary original civil jurisdiction.
16. Learned Counsel for the petitioners submitted that Section 2(1)
(e) of the Arbitration Act cannot be read in isolation but only in
consonance and in conjunction with Section 2(1) of the Act. It is
submitted that an isolated textual interpretation cannot be provided to
Section 2(1)(e) of the Arbitration Act. According to him, Section 2(1)
of the Act indicates the definition should be understood in accordance
with the surrounding context or specific circumstances rather than
strictly adhering to a textual interpretation. It is submitted that for
the purpose of Section 29-A(4), "Court" has to be the High Court as
the appointment of the Arbitrator(s) was made under Section 11(6) of
the Arbitration Act. Reliance is placed on the decisions in Chief
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Engineer (NH) PWD (Roads) vs. M/s. BSC & C & C JV (supra)
rendered by the Meghalaya High Court, Chief Engineer (NH) PWD
(Roads) vs. M/s. BSC & C & C JV order dated 16.02.2024 in
Commercial Misc. Case no. 1/2024 of Commercial Court, East Khasi
Hills, Shillong, M/s. Linear Enterprises vs. M/s. Maha Active
Engineering Pvt. Ltd. order dated 26.07.2024 in Arbitration
Application No. 14/2024, Shapoorji Pallonji & Co. vs. Lily Realty
Private Limited) Order passed in I.A. Nos. 1 and 2/2023 in CMP
No. 357/2018 of Karnataka High Court, Lots Shipping Company
Ltd. vs. Cochin Port Trust11, Nilesh Ramanbhai Patel vs.
Bhanubhai Ramanbhai Patel12 DDA vs. Tara Chand Sumit
Construction Co.13, Indian Farmers Fertilizers Coop Ltd. vs.
Manish Engineering Enterprises14 and Jaypee Infratech Ltd.
vs. EHBH Services (P) Ltd.15, in support of his submissions.
17. Shri Parag Rao, Learned Counsel for the respondents submitted
that this reference has to be answered in terms of the law declared by
the Supreme Court in Chief Engineer (NH) PWD (Roads)
(supra). It is submitted that when the reference was made, this Court
did not have the benefit of the Hon'ble Supreme Court's decision
which has now settled the controversy. The Hon'ble Supreme Court
11 2020 SCC OnLine Ker 21443
12 2018 SCC OnLine Guj 5017
13 2020 SCC OnLine Del 2501
14 2022 SCC OnLine All 150
15 2024 SCC OnLine All 444
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has emphasized and taken note of the fact that the Meghalaya High
Court did not have the ordinary original civil jurisdiction which,
according to the learned Counsel, is the only determining factor to
decide whether a "Court" under Section 29-A would be the High Court
or the Principal Civil Court of original jurisdiction in a district. The
appointment of Arbitrator(s) by the High Court under Section 11(6) is
of no consequence while deciding whether the "Court" under Section
2(1)(e) would also be the "Court" under Section 29-A of the
Arbitration Act. It is submitted that merely because the High Court
has appointed Arbitrator(s), the expression "Court" used in Section
29-A cannot be construed to mean the High Court unless such High
Court exercises ordinary original civil jurisdiction.
18. Relying on the decision in Kunhayammed and Ors. vs.
State of Kerala16, it is submitted that the declaration of law by the
Supreme Court under Article 141 of the Constitution of India, is
binding on this Court. To express any opinion in conflict with or in
departure from the view taken by the Supreme Court is not proper
because permitting to do so would be subversive of judicial discipline
and an affront to the order of the Supreme Court. It is submitted that
generally the definition clause which defines a term when used
elsewhere in the statute, should and would carry the same meaning as
given in the definition clause. The object of such definition is to avoid
16 (2000) 6 SCC 359
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frequent repetitions in describing all the subject-matter to which the
word or expression so defined is intended to apply. It is submitted
that the definition "Court" under Section 2(1)(e) is an exhaustive
definition as it uses the expression "means and includes" and it
envisages only two Courts i.e. either a principal Civil Court of original
jurisdiction in a district or a High Court in exercise of its ordinary
original civil jurisdiction. It is further submitted that contextual
interpretation is not to be invoked unless it leads to absurdity. It is
further submitted that the power of appointment under Section 11(6)
is the power given to the High Court only to put the arbitration
proceedings in play or in motion whenever the parties fail to agree on
appointment of an Arbitrator. It is the submission that the Arbitrator
once is appointed, the High Court is not in seisin of the arbitration
proceedings or the Arbitrator and does not retain any jurisdiction on
the Arbitrator as it becomes functus officio. Learned Counsel relied on
the decision in Nimet Resources Inc. & anr. vs. Essar Steels
Limited17, in support of his submissions. Learned Counsel was at
pains to point out that the power of appointment under Section 11 is
independent and distinct power of substitution under Section 29-A.
It is further submitted that there are other provisions in the
Arbitration Act which indicate conceding of powers to parties and
Court to terminate mandate of Arbitrator(s) appointed by Supreme
17 (2009) 17 SCC 313
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Court/High Court. It is therefore urged that the Commercial Court is
the correct Court for exercising powers under Section 29-A.
19. Reliance is placed on the decisions in Mormugao Port Trust
vs. Benzoplast Ltd., (supra), Chief Engineer (NH) PWD
(Roads) vs. M/s. BSC & C and C JV (supra), Kunhayammed &
Ors. vs. State of Kerala & anr. (supra), Marcelina Fernandes &
Ors. vs. Green Valley Realtors (supra), Nahalchand
Laloochand Private Ltd. vs. Panchali Cooperative Housing
Society Ltd.18, State of West Bengal & Ors. vs. Associated
Contractors19 and Nimet Resources INC & anr. vs. Essar
Steels Limited20, by Shri Parag Rao, in support of his submissions.
20. Let us consider some of the provisions of the Arbitration Act.
Section 2(1)(a) of the Arbitration Act defines - 'arbitration' means any
arbitration whether or not administered by permanent arbitral
institution; Section 2(b) defines 'arbitration agreement' means an
agreement referred to in section 7; Section 2(d) defines 'arbitral
tribunal' means a sole arbitrator or a panel of arbitrators relevant in
the context of the present case. Section 2(e)(i) of the Act defines
'Court' means (i) in the case of an arbitration, the Principal Civil Court
of original jurisdiction in a district and includes the High Court in
18 (2010) 9 SCC 536
19 (2015) 1 SCC 32
20 (2009) 17 SCC 313
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exercise of its ordinary original civil jurisdiction, having jurisdiction to
decide the questions forming the subject matter of the arbitration if
the same had been the subject matter of a suit. We have not referred
to that part of the definition which deals with the international
commercial arbitration.
21. Chapter III of the Arbitration Act contains provisions relating to
composition of Arbitral Tribunal. Section 11 therein provides for
appointment of arbitrators. Sub-section (2) of Section 11 of the
Arbitration Act provides that subject to sub-section (6), the parties are
free to agree on a procedure for appointing the arbitrator or
arbitrators. Sub-section (3) deals with the situation where failing any
agreement referred to in sub-section (2), in an arbitration with three
arbitrators, each party shall appoint one arbitrator and the two
appointed arbitrators shall appoint the third arbitrator who shall act
as the Presiding Arbitrator. Sub-section (4) says that if the
appointment procedure in sub-section (3) applies and, (a) a party fails
to appoint an arbitrator within thirty days from the receipt of a request
to do so from the other party; or (b) the two appointed arbitrators fail
to agree on the third arbitrator within thirty days from the date of
their appointment, the appointment shall be made on an application
of the party, by the High Court, in case of arbitrations other than the
international commercial arbitration, that is for domestic arbitrations.
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Sub-section (5) provides that failing any agreement referred to in sub-
section (2), in an arbitration with a sole arbitrator, if the parties fail to
agree on the arbitrator within thirty days from receipt of a request by
one party from the other party to so agree, the appointment shall be
made on an application of the party in accordance with the provisions
contained in sub-section(4). It is now significant to notice sub-section
(6) of Section 11 of the Arbitration Act, which provides that where,
under an appointment procedure agreed upon by the parties,- (a) a
party fails to act as required under that procedure; or (b) the parties,
or the two appointed arbitrators, fail to reach an agreement expected
of them under that procedure; or (c) a person, including an institution,
fails to perform any function entrusted to him or it under that
procedure, the appointment shall be made, on an application of the
party, by the High Court, in case the arbitrations other than
international commercial arbitration to take the necessary measure,
unless the agreement on the appointment procedure provides other
means for securing the appointment.
22. Chapter VI of the Arbitration Act, deals with making of arbitral
award and termination of proceedings. Significant in the context of
the present case is Section 29-A which provides for time-limit for
arbitral award. Sub-section (4) of Section 29-A stipulates that if the
award is not made within the period specified in sub-section (1) or the
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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. It is
also pertinent to note that sub-section (6) of Section 29-A stipulates
that 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.
23. If the strictly textual interpretation of Section 2(e)(i) is applied,
there would be no difficulty for us to hold that the Court for the
purpose of Section 29-A(4) and sub-section (6) of the Arbitration Act,
would be the principal Civil Court of original jurisdiction in a district
which includes a High Court in exercise of its ordinary original civil
jurisdiction even when the Arbitrator is appointed under Section 11(6)
of the Act. However, we have to consider whether the "Court" means
District Court or the High Court which would mean the principal Civil
Court of original jurisdiction or the High Court in the context of the
appointment of an Arbitrator made by the High Court under Section
11(6) of the Arbitration Act. Section 2(1)(e) of the Arbitration Act
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defines "Court". However, having regard to the purport of Section 2(1)
which provides that in this part, unless the context requires, the same
will have to be read in a contextual sense.
24. Let us now examine the basic facts in Mormugao Port Trust
(supra), which view of the learned Single Judge was a trigger for this
reference. The Mormugao Port Trust and the company between
whom there was a supplementary agreement signed, jointly appointed
a retired learned Judge of the Delhi High Court as the sole Arbitrator.
Having entered the arbitration on 19.06.2018, the sole Arbitrator
could not complete the arbitral proceedings in one year as stipulated
under Section 29-A of the Arbitration Act. With both parties' consent,
the period stood extended by six more months. As the extended
period was to end on 18.12.2019, two days prior, both parties jointly
applied to the Principal District Judge for further extension of time.
Both the parties wanted the time extended by one more year. By an
Order dated 17.12.2019, the Principal District Judge rejected the
parties' joint application. The Principal District Judge held that
jurisdiction under Section 29-A of the Arbitration Act to extend the
arbitral period lies with the High Court.
25. In our considered opinion, the learned Single Judge in
Mormugao Port Trust (supra) rightly came to the conclusion that
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the power to extend the arbitral period would be with the District
Judge who will have jurisdiction to entertain the application under
Section 29-A(4) of the Arbitration Act and not the High Court. In
Mormugao Port Trust (supra) the arbitral proceedings was not
commenced under Section 11(6) by the High Court but the same was
with the consent of the parties.
26. Thus, the issue in Mormugao Port Trust (supra) was not in
the context of the appointment of the Arbitrator under Section 11(6) of
the Arbitration Act. We may hasten to add that we agree with the
conclusion in Mormugao Port Trust (supra) as the same is in
conformity with what is recently held by the Supreme Court in Chief
Engineer (NH) PWD (Roads) (supra). In Mormugao Port
Trust (supra), though the learned Single Judge has referred to Section
11(6) of the Arbitration Act, we find that the issue of Section 11(6) was
not arising for consideration. The observations in the context of
Section 11(6) of the Arbitration Act, will therefore have to be regarded
as passing remarks and not as a binding ratio.
27. The Arbitration Act proceeds on two fundamental principles.
One is party autonomy and the other is minimal Court intervention.
Section 5, as held by the Hon'ble Supreme Court, brings out clearly the
object of the new Act, namely, that of encouraging resolution of
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disputes expeditiously and less expensively and when there is an
arbitration agreement, the Court's intervention should be minimal.
The provisions of the Act reveal that the party autonomy extends to
parties being free to determine the appointment procedure, the parties
are free to agree on a procedure for challenging an arbitrator; at
several places in the Act, consequences are provided only when the
parties do not agree on a given issue/procedure. So much for the party
autonomy and minimal Court intervention. The parties thus can decide
virtually everything as regards the procedure barring some exceptions
made by the Act.
28. Section 29-A was inserted in the Act w.e.f. 23.10.2015.
Provisions were thereby made prescribing time limit for arbitral award.
The object obviously was to ensure that the arbitration proceedings are
decided expeditiously and within the time frame prescribed. Sub-
section (2) of Section 29A provides for an incentive if the award is
made within the time prescribed. The proviso to sub-section (4) of
Section 29A says that while extending the period under this sub-
section, if the Court finds that the proceedings are delayed for reasons
attributed to the arbitral tribunal, then it may order reduction of fees.
Sub-section (4) will have to be read together with sub-section (5) and
sub-section (6). As per sub-section (5), the extension under Section
29-A(4) can be granted by the Court on an application by one of the
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parties and may be granted only for sufficient cause and on such terms
and conditions as may be imposed by the Court.
29. In the context of sub-section (6) Their Lordships held that the
power under sub-section (6) of Section 29A is only a consequential
power vested in the Court which is empowered to extend the time. If
the Court finds that the cause of delay is one or all of the arbitrators,
while extending the time, the Court has power to replace and substitute
the Arbitrator(s). The said power obvi0usly has to be exercised by the
Court which is empowered to extend the time. At this juncture, it is
significant to notice Section 11(2) which provides that subject to sub-
section (6), the parties are free to agree on a procedure for appointing
the arbitrator(s). As a result, under sub-section (6) of Section 11, the
appointment shall be made, on an application of the parties, by the
High Court, in case of arbitrations other than international commercial
arbitrations. Even in sub-section (6) it is significant to note that
parties' autonomy is seen, in that the appointment of arbitrator shall
be made by the High Court to take necessary measure, unless the
agreement on the appointment procedure provides other means for
securing the appointment. We need to bear in mind that the parties are
permitted to raise objections/defences before appointment of an
arbitrator under Section 11(6) and upon considering all relevant
factors, the High Court appoints an Arbitrator(s) under Section 11(6) of
the Act. Now in this context if sub-sections (4), (5) & (6) of Section 29A
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are read, it would be clear that extension of period is not just an empty
formality. Even when application for extension of period is made,
several consequences may flow while considering the application as it
shall even be open to the Court to substitute one or all of the
arbitrators. When the Act provides for a procedure in Section 11(6) as
to how appointment of an Arbitrator shall be made and as sub-section
(2) of Section 11 provides that parties are free to agree on a procedure
for appointing the arbitrator/s, we find it difficult to comprehend as
how the power to substitute an arbitrator would lie with any Court
other than the one empowered to appoint arbitrator/s under
Section11(6). It is for this reason that the definition of 'Court' cannot be
taken strictly in the textual sense but as the provisions of Section 2
ordain, the definition of 'Court' will have to be seen in a contextual
sense. Thus the Court empowered under Section 11(6) for an
appointment of an arbitrator is the High Court, we find it
inconceivable that for the purpose of sub-section (4) of Section 29A,
when the appointment of the Arbitrator is made by the High Court, the
Court would be any other Court than the one empowered under
Section 11 (6) of the Arbitration Act.
30. Having put a mechanism in place by providing a timeline for
arbitral award in the form of Section 29-A, there are several factors to
be considered by the Court before extending the period under sub-
section (4) of Section 29A which fall within the realm of discretionary
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power of the Court. For one, the extension of the period may be
granted only for sufficient cause and second, on such terms and
conditions as may be imposed by the Court. Then again it shall be open
for the Court to substitute an arbitrator and as the sub-section (6) says
that the arbitrator appointed under this Section shall be deemed to
have received the said evidence and material for the purpose of
continuation of the arbitral proceedings from the stage already
reached. The extension of time is therefore not a mere ritual or an
empty formality. Considering the nature of application of mind and
the extent of the discretionary powers conferred on the Court, we have
no hesitation in forming an opinion that it can only be the Court
empowered under Section 11(6) which will be the Court for the purpose
of sub-section (4) of Section 29-A in the present case.
31. No doubt that once the arbitrator is appointed under Section
11(6), the Court appointing the Arbitrator becomes functus officio for
the purpose of arbitration proceedings before the arbitrator. However,
that can never take away the empowerment of the Court which
appointed the Arbitrator under Section 11(6) when the question of
extension of period arises in the context of sub-section (4) of Section
29-A.
32. The decision of the Hon'ble Supreme Court in Nimet
Resources Inc. & anr. vs. Essar Steels Limited (supra), which
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was relied upon by learned Counsel for the respondents, was rendered
prior to the insertion of Section 29-A in the Arbitration Act. We have
carefully gone through the various decisions relied upon by the learned
Counsel. We do not propose to multiply the decisions, suffice it to say
that we are in respectful agreement with the view taken by the High
Court of Gujarat in Nilesh Ramanbhai Patel vs. Bhanubhai
Ramanbhai Patel (supra). Paragraphs 7, 8 and 9 of the said decision
reads thus :
"7. In order to judge the objections of Shri Mehta to
the jurisdiction of this Court to entertain the
application, few provisions of the said Act would have
to be noted. Section 2(1)(e) of the Act defines the
term 'Court' as under:--
"2. Definitions
(1) In this Part, unless the context otherwise requires.
.........
(e) "Court" means--
(i) in the case of an arbitration other than
international commercial arbitration, the
principal Civil Court of original jurisdiction in a
district, and includes the High Court in exercise of
its ordinary original civil jurisdiction, having
jurisdiction to decide the questions forming the
subject-matter of the arbitration if the same had
been the subject matter of a suit, but does not
include any Civil Court of a grade inferior to such
principal Civil Court, or any Court of Small
Causes;
(ii) in the case of international commercial
arbitration, the High Court in exercise of its
ordinary original civil jurisdiction, having
jurisdiction to decide the questions forming the
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subject-matter of the arbitration if the same had
been the subject-matter of a suit, and in other
cases, a High Court having jurisdiction to hear
appeals from decrees of courts subordinate to that
High Court."
8. As per this definition thus a Court in case of an
arbitration other than international commercial
arbitration is the Principal Civil Court of original
jurisdiction in a district and where the High Court
exercises its ordinary original civil jurisdiction, would
include the High Court also. If the reference is to an
international commercial arbitration, the Court
would mean the High Court, if it exercises ordinary
original jurisdiction or the High Court having
jurisdiction to hear appeals of Courts subordinate to
that High Court. This definition in Section 2,
however, like most other definition provisions starts
with a caveat when it provides that in this part unless
the context otherwise requires. We may note that this
definition was substituted by the Act 3 of 2016 with
effect from 23.10.2015. The definition contained
prior to such amendment did not contain two clauses
as in the present case. Clause (i) in the present form
was the full definition without presence of Clause (ii).
Effectively so far as our case is concerned, this
change in the definition is inconsequential.
9. Section 11 of the Act, as is well-known, pertains
to appointment of arbitrators and makes detailed
provision for appointment of arbitrators by the High
Court or the Supreme Court. In terms of sub-sections
(4), (5) or (6) of Section 11, the High Court would
make an appointment in case of an arbitration other
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than international commercial arbitration. In case of
international commercial arbitration such
appointments would be made by the Supreme Court.
33. Paragraph 10 of Nilesh Ramanbhai Patel vs. Bhanubhai
Ramanbhai Patel (supra) extracts Section 29-A, which was inserted
in the said Act by virtue of the Amending Act 3 w.e.f. 23.10.2015.
Then in paragraph 11 to 16, it is observed thus :
"11. Perusal of this section would show that time
limits have been introduced for completion of
arbitral proceedings. Sub-section (1) of Section 29A
provides that the award shall be made within a
period of twelve months from the date the Arbitral
Tribunal enters upon the reference. This expression
"to have entered upon the reference" is also
explained through the explanation below sub-section
(1). Sub-section (2) is in the nature of incentive for
completing the arbitral proceedings expeditiously.
Sub-section (3) of Section 29A provides for
extension of such period as specified in sub-section
(1) by consent of the parties for a period not
exceeding six months. Sub-section (4) of Section 29A
provides that if the award is not made within the
period specified in subsection (1) or the extended
period specified in sub-section (3), the arbitrator's
mandate shall terminate, unless the Court has, either
prior to or after expiry of the period, extended the
period. Sub-section (5) of Section 29A provides that
the extension under sub-section (4) would be
granted on an application of any of the parties only
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for sufficient cause and on such terms and
conditions as may be imposed by the Court. Sub-
section (6) of Section 29A which is of considerable
importance, provides that while extending the
period referred under subsection (4), it would be
open for the Court to substitute one or all of the
arbitrators and if such substitution is made, the
arbitral proceedings shall continue from the stage
already reached and on the basis of evidence or
material already collected. As per sub-section (7) the
re-constituted Tribunal shall be deemed to be in
continuation of the previously appointed arbitral
Tribunal. Under sub-section (8) the Court is given
power to impose actual or exemplary cost on any of
the parties. This section makes detailed provisions
providing time period for completion of arbitration,
for extension of time such time, who can extend such
time and under what circumstances and subject to
what conditions the time may be extended. It also
provides that if the award is not passed within the
initial period or extended period, the mandate of the
arbitrator would terminate. Section 29A of the Act is
thus a complete Code by itself.
12. In case of State of West Bengal v. Associated
Contractors, (2015) 1 SCC 32, the Supreme Court
interpreted the term 'Court' as defined under Section
2(1)(e) of the Act as to mean only the Principal Civil
Court of original jurisdiction in a district or High
Court having civil jurisdiction in the State. No other
Court, including the Supreme Court, is contemplated
under Section 2(1)(e) of the Act. In case of State of
Jharkhand v. Hindustan Construction Company
Ltd., (2018) 2 SCC 602, this was further elaborated
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by a Constitutional Bench of the Supreme Court
holding that the definition of term 'Court' contained
in Section 2(1)((e) of the Act was materially different
from its predecessor section contained in Section
2(c) of the Arbitration Act, 1940 and that Supreme
Court cannot be considered to be a Court within the
meaning of Section 2(1)(a) even if it retains seisin
over the arbitral proceedings. The decision in case of
Associated Contractor was affirmed.
13. Ordinarily therefore I would have accepted the
contention of learned advocate Shri Mehta that the
term 'Court' defined in Section 2(1)(e) in the context
of the power to extend the mandate of the arbitrator
under sub-section (4) of Section 29A would be with
the principal Civil Court. However, this plain
application of the definition of term 'Court' to
Section 29A of the Act poses certain challenges. In
this context one may recall that the definition clause
of subsection (1) of Section 2 begins with the
expression "in this part, unless the context otherwise
requires". Despite the definition of term 'Court'
contained in Section 2(1)(e) as explained by the
Supreme Court in above noted judgments, if the
context otherwise requires that the said term should
be understood differently, so much joint in the play
by the statute is not taken away.
14. As is well-known, the arbitration proceedings
by appointment of an arbitrator can be triggered in
number of ways. It could be an agreed arbitrator
appointed by the parties outside the Court, it could
be a case of reference to the arbitration by Civil
Court in terms of agreement between the parties, it
may even be the case of appointment of an arbitrator
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by the High Court or the Supreme Court in terms of
subsection (4), (5) and (6) of Section 11 of the Act.
The provisions of Section 29A and in particular sub-
section (1) thereof would apply to arbitral
proceedings of all kinds, without any distinction.
Thus the mandate of an arbitrator irrespective of the
nature of his appointment and the manner in which
the arbitral Tribunal is constituted, would come to
an end within twelve months from the date of
Tribunal enters upon the reference, unless such
period is extended by consent of the parties in term
of sub-section (3) of Section 29A which could be for
a period not exceeding six months. Sub-section (4)
of Section 29A, as noted, specifically provides that, if
the award is not made within such period, as
mentioned in sub-section (1) or within the extended
period, if so done, under subsection (3) the mandate
of the arbitrator shall terminate. This is however
with the caveat that unless such period either before
or after the expiry has been extended by the Court.
In terms of sub-section (6) while doing so it would
be open for the Court to substitute one or all the
arbitrators who would carry on the proceedings from
the stage they had reached previously.
15. This provision thus make a few things clear.
Firstly, the power to extend the mandate of an
arbitrator under sub-section (4) of Section 29A
beyond the period of twelve months or such further
period it may have been extended in terms of sub-
section (3) of Section 29A rests with the Court.
Neither the arbitrator nor parties even by joint
consent can extend such period. The Court on the
other hand has vast powers for extension of the
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period even after such period is over. While doing so
the Court could also choose to substitute one or all of
the arbitrators and this is where the definition of
term 'Court' contained in Section 2(1)(e) does not fit.
It is inconceivable that the legislature would vest the
power in the Principal Civil Judge to substitute an
arbitrator who may have been appointed by the High
Court or Supreme Court. Even otherwise, it would be
wholly impermissible since the powers for
appointment of an arbitrator when the situation so
arises, vest in the High Court or the Supreme Court
as the case may be in terms of sub-section (4), (5)
and (6) of Section 11 of the Act. If therefore there is a
case for extension of the term of an arbitrator who
has been appointed by the High Court or Supreme
Court and if the contention of Shri Mehta that such
an application would lie only before the Principal
Civil Court is upheld, powers under sub-section (6)
of Section 29A would be non-operatable. In such a
situation sub-section (6) of Section 29A would be
rendered otiose. The powers under sub-section (6) of
Section 29A are of considerable significance. The
powers for extending the mandate of an arbitrator
are coupled with the power to substitute an
arbitrator. These powers of substitution of an
arbitrator are thus concomitant to the principal
powers for granting an extension. If for valid reasons
the Court finds that it is a fit case for extending the
mandate of the arbitrator but that by itself may not
be sufficient to bring about an early end to the
arbitral proceedings, the Court may also consider
substituting the existing arbitrator. It would be
wholly incumbent to hold that under sub-section (6)
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of Section 29A the legislature has vested powers in
the Civil Court to make appointment of arbitrators
by substituting an arbitrator or the whole panel of
arbitrators appointed by the High Court under
Section 11 of the Act. If we therefore accept this
contention of Shri Mehta, it would lead to
irreconcilable conflict between the power of the
superior Courts to appoint arbitrators under section
11 of the Act and those of the Civil Court to substitute
such arbitrators under Section 29A(6). This conflict
can be avoided only by understanding the term
"court" for the purpose of Section 29A as the Court
which appointed the arbitrator in case of Court
constituted arbitral Tribunal.
16. Very similar situation would arise in case of an
international commercial arbitration, where the
power to make an appointment of an arbitrator in
terms of Section 11 vests exclusively with the
Supreme Court. In terms of Section 2(1)(e) the
Court in such a case would be the High Court either
exercising original jurisdiction or appellate
jurisdiction. Even in such a case if the High Court
were to exercise power of substitution of an
arbitrator, it would be transgressing its jurisdiction
since the power to appoint an arbitrator in an
international commercial arbitrator rests exclusively
with the Supreme Court.
34. We, therefore, have no hesitation in holding that the term
"Court" for the purpose of Section 29-A(4) would be the "Court" which
appointed the Arbitrator(s) under Section 11(6) of the Arbitration Act
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i.e. the High Court in the present case and therefore, answer the
reference thus :
(i) - In the event an Arbitral Tribunal constituted
by the High Court under Section 11(6) fails to
complete the proceedings within the stipulated
period/extended period, then an application
under Section 29-A(4) would lie to the High Court
in case of a domestic arbitration.
(ii) In answer to the second question, we opine
that in the event an Arbitral Tribunal consisting of
three Arbitrators is constituted as per Section
11(2) i.e. with agreement and consent of the
parties, fails to complete the proceedings within
the stipulated period/extended period, the
application under Section 29-A(4) would lie to the
principal Civil Court of original jurisdiction in a
district and includes the High Court in exercise of
its ordinary original jurisdiction.
35. In view of the above, the Writ Petition be placed before the
learned Single Judge for further consideration.
VALMIKI MENEZES, J. M. S. KARNIK, J.
7th August 2024
