Commercial Aviation & Travel Co. ... vs Japan Airlines Ltd.
1987 Latest Caselaw 563 Del

JUDGMENT

S.N. Sapra, J.

(1) M/S Commercial Aviation and Travel Co. Insurance, is a partnership firm duly registered under the Partnership Act, 1932. having its office at New Delhi. The present petition has been filed by petitioner under Section 28 of the Arbitration Act, 1940 for extension of time for making the award.

(2) It has been alleged in the petition that petitioner was appointed by respondent in 1977 as General Sales Agent for the territories of Andhra Pradesh and Karnatka on the terms and conditions as incorporation in the Agreement dated February 1,1977. Vide letter dated April 20,1983, it is alleged by the petitioner, respondent illegally, arbitrarily and unilaterally terminated the aforesaid agreement. On account of the termination of agreement and also for withholding the dues of petitioner, disputes and differences arose between the parties. The Agreement contained arbitration clause and petitioner and respondent by exchange of letters appointed their respective arbitrators Shri N.L. Kakkar was appointed as an arbitrator by the petitioner while respondent appointed Mr. J.B. Dadachanji advocate as their arbitrator. Both the arbitrators appointed Mr. Justice P.S. Safeer (retired) as Chairman of the Arbitral Tribunal. It is alleged that after due constitution of the Arbitral Tribunal claims were lodged by the petitioner and arbitration proceedings commenced. Petitioner has given various facts as to the holding of arbitration proceedings by the Arbitral Tribunal under the Chairmanship of Mr. Justice P.S. Safeer (retd). It is alleged that the case had been lingering before the Tribunal for one reason or the other whereas petitioner has been pursuing the arbitrations diligently and had been present on all the hearings and ready with arguments and evidence. Adjournments were either sought by counsel for respondent or proceedings could not be held on some other grounds. It is alleged that ex-partner of petitioner firm filed a suit No. 324 of 1983 in Delhi High Court. In I.A. 3047/83 in Suit No. 324 of 1983 Mr. Justice Sultan Singh passed an order on 23rd September, 1983 to the following effect : "Mr. Mehra seeks adjournment for arguments on this application. .Let this application be listed on 12.10.1983. The arbitrators referred to in this application may continue with the arbitration proceedings but they are hereby restrained from giving their final award till further orders." It is alleged that respondent has taken objection before the Arbitral Tribunal that proceedings could not be continued unless extension of time is obtained.

(3) Respondent has filed reply to the petition and has contested the petition. It is alleged by respondent that respondent had participated in the said arbitration proceedings under protest and subject to the preliminary objections raised regarding to the jurisdiction and validity of the arbitration. So far only preliminary issues have been framed and the arbitration has not proceeded any further.

(4) Mr. Mahajan learned counsel for respondent, has urged that no useful purpose will be served by extending the time for making the award as under the orders of the Court in I.A.. 3047/83 in suit No. 324 of 1983 there is a restraint order to the effect that no final award could be made.

(5) Mr. S.K. Mehra, learned counsel for petitioner, contends that the restraint order is only with respect to the making of final award and the arbitration proceedings have not been stayed and even interim award can be made. Moreover, respondent is not a party to the aforesaid suit No. 324 of 1983. Mr. Mehra has invited my attention to the various dates, as mentioned in the petition. The petition is duly supported by an affidavit of one Shri H.L. Malhotra who is Managing Partner of petitioner. After going through the facts as stated in the petition and the documents filed, I am satisfied that this is a fit case where time should be extended under Section 28 of the Arbitration Act.

(6) There is restraint order dated September 23,1983 to the effect that no final award would be given. Subject to the restraint order, the time is extended and the Arbitral Tribunal can proceed with the arbitration proceedings but no final award can be given unless the aforesaid stay order is vacated. Petition is allowed. Parties shall bear their own costs.