Czech Ocean Shipping vs M.M.T.C
1998 Latest Caselaw 437 Del

ORDER

K.S. Gupta, J.

1. Petitioner filed application under Section 28 of the Arbitration Act, 1940 alleging that it is a joint stock company and, inter alia, carries on business as carriers by sea. Respondent is a limited company and carries on business as can alysing agents for import and export of minerals and metals including rock phostate. By a charter party dated 10th October, 1988 petitioner's vessel m.v. 'Mir' was let out for carriage of bulk rock phosphate of the quantity not exceeding 13,650 M.Ts and not less than 12,350 M.Ts. from 1/2 Safe Berths Aqaba to 1 to 2 Safe Berth(s) or 2 Safe Port(s) Anchorages India. Disputes having arisen between the parties regarding computation of allowable time at load port and discharge port, the matterwas referred for arbitration. Petitioner appointed K.P. Patel while the respondent appointed G.N. Saxena as the arbitrators. Arbitrators held a preliminary hearing on 14th March, 1992 in New Delhi on which date they issued directions to the parties to file the statement of claims/reply etc. Arbitrators further informed at the preliminary hearing that they have appointed H.M. Singh as the umpire. Accordingly, petitioner filed their statement of claims. Next hearing in the matter was held in Bombay on 8th September, 1992 on which dated respondent sought an adjournment on the ground that they were negotiating a settlement with the petitioner. Since the settlement was not arrived at, the arbitrators held a further hearing on 25th August, 1994 at New Delhi. Respondent's counsel in that hearing raised the objection that as four months period for making and publishing the award had already expired the arbitrators had become functus officio. It is further alleged that the respondent is yet to file their reply to the statement of claims filed by the petitioner and the respondent is trying to stall the arbitration proceedings as much as possible. It was prayed that time for making and publishing the award by the arbitrators be extended for a further period of six months.

2. In the reply respondent has not denied the referring of the disputes in regard to the computation of allowable time at the load port and dis-charge port to K.P. Patel and G.N. Saxena, arbitrators and the nature of the proceedings which took place on 14th March, 1992, 8th September, 1992 & 25th August, 1994, as alleged. However, it is stated that the petitioner after 8th September, 1992 did not even bother to attend to the matter as a result whereof for about 2 years there was absolutely no hearing in the arbitration case. It is denied that the petitioner is entitled to the extension of time as prayed for.

3. Submission advanced by the learned counsel of the petitioner was that on 8th September, 1992 instead of filing reply to the petitioner's statement of claims, adjournment was sought by the respondent on the ground of negotiating a settlement with the petitioner and on the subsequent date of hearing on 25th August, 1994 an objection was raised on respondent's behalf of the arbitrators having become functus officio for their having not made and published the award within a period of four months of their entering upon the reference. Thus the respondent by their conduct are stopped from opposing the extention of time sought for in the application. On the other hand, the argument advanced by the learned counsel of the respondent was that there is a time gap of about 14 months in between the filing of the present application and the arbitration proceedings lastly held on 25th August, 1994 and the petitioner has not furnished any reason whatsoever in regard to the late filing of the application. According to him, discretion under Section 28 of the Act has to be exercised in a judicious manner and for cogent reasons by the Court. Strong reliance was placed on J.W. Oliver Vs. Mian Dost Mohammad, AIR 1935 Lahore 191, M/s. Hindustan Steel Ltd. Vs. Amarnath Sharma, AIR 1971 Orissa 288, M/s. Mohinder Singh and Co. Vs. UOI & Ors. AIR 1972 Jammu & Kashmir 63 & M/s. Lila Kishan Kailash Kumar Vs. DDA, AIR 1985 Nos. 121 Delhi.

4. In J.W. Oliver's case (supra) it was held by a Division Bench thus:-

"The Indian Arbitration Act prescribes a procedure for the expeditious and speedy settlement of disputes by private tribunals especially those arising in commercial transactions, and the legislature has, in the schedule, fixed a period of three months for the delivery of awards in cases where no time is fixed in the reference. The Court has no doubt, a discretion to extend time under S. 12, but it will do so only if cogent reasons are forth- coming. Obviously the discretion cannot be exercised in favour of a party who himself has been negligent and has been guilty of dilatory tactics."

5. Said ratio of J.W. Oliver's case was quoted with approval in M/s. Hindustan Steel Ltd.'s case (supra) and in para No. 10 of the report it was held -

"The impugned order comes directly within the mischief of the aforesaid dictum. Though in 1966 parties were called upon to have extension of time, the opposite party filed the application under Section 28(1) of the Act about three years after. Delay and dilatory tactics have not been explained by any cogent reason as the opposite party was doing his contract work at Burla in 1968 and could have taken steps for extension of time."

6. In remaining two decisions in M/s. Mohinder Singh and Co. and M/s. Lila Kishan Kailash Kumar's case (supra), the view taken was that the power to extend time for making award being discretionary must be exercised judicially by the Court.

7. While dealing with the discretion in the matter on page 320 of Russel on the Law of Arbitration (20th edition) it has been observed:-

"The power conferred by the section is entirely discretionary and will not be exercised unless the court thinks fit in each particular case. Where there has been inexcusable case. Where there has been inexcusable delay in applying for an enlargement, the application will, as a rule, be refused."

8. Indisputably, present application was filed on 18th October, 1995 and it is absolutely silent about the reasons of late filing thereof by about 14 months beyond 25th August, 1994. In my opinion, conduct of the respondent in seeking time for negotiating with the petitioner before the arbitrators could have assumed importance only when the petitioner had disclosed cogent reasons of the late filing of the application by about 14 months. Taking note of the law laid down in the authorities referred to above, in th absence of reasons to the said effect the petitioner cannot be said to have made out a case for extension time for making and publishing the award as prayed for. Application thus deserves to be dismissed.

Dismissed. No order as to costs.