Usha Alloys & Steels Ltd. vs Union Of India (Uoi)
2003 Latest Caselaw 337 Del

JUDGMENT

J.D. Kapoor, J.

1. In response to an invitation of the respondent/ Union of India for tender, the petitioner submitted tender which was accepted by the respondents by their advance acceptance of tender which was followed by a formal A/T bearing No. MW-5/201/584/10-12-79/45/CAGD/369 dated 15.10.80 for supply of 1250 metric tonnes of CTD bars size 8mm @ 4,550/- per M/T. However, during the performance of the contract, disputes and differences arose between the parties due to risk purchase claim of the respondents alleged to be made in October, 1981. It is alleged that no arbitrator was appointed by the respondents for a period of three years. The first arbitrator was appointed on 29.11.1984. There was a spate of resignations by the arbitrators one after the other. Lastly, one Sh. Ram Bahadur who was the sixth arbitrator took over the proceedings on 13.11.1992. He too resigned in the midstream and resigned and in his place one Mr. K. D. Singh was appointed as arbitrator. Bad omen did not stop here. Mr. Singh also resigned and mantle again fell on Ram Bahadur.

2. The grievance of the petitioner is that due to the conduct of the respondent, the Award has not been made till date and therefore the arbitration agreement be declared to have come to an end or in the alternative the arbitration reference be declared to having been superseded. Perusal of the proceedings shows that parties appeared before Sh. Ram Bahadur. It is alleged that the proceedings were adjourned by Sh. Shiv Prakash, the arbitrator who was the fifth arbitrator from time to time either on the request of respondents or due to absence of respondents and the last such adjournment taken was on 26th June, 1990 which forced the petitioner to file the present petition.

3. The instant petition was filed in the year 1990. During the pendency of this petition, Sh. Ram Bahadur was appointed as the next arbitrator on 13.11.1992. Though the parties appeared before the said arbitrator and participated in the proceedings and on some dates of hearing counsel for the respondent was not present and on some dates counsel for the petitioner was not available, yet the petitioner did not agree for enlargement of time for making the Award on the plea that the petitioner has filed the instant petition in Delhi High Court and as such they were not in a position to give consent to enlarge the time beyond 30th April, 1993. Upon this representation, no effective proceedings were taken up by the arbitrator and adjournments after adjournments were given. It is pertinent to mention that Mr. Ram Bahadur was first appointed on 13.11.92 and on his resignation another arbitrator Sh. K.D. Singh also resigned. Sh. K. D. Singh also resigned. Again the mantle fell on Sh. Ram Bahadur. By this reckoning, Sh. Ram Bahadur was the eighth arbitrator. It is the contention of the petitioner that in view of such long delay by the respondents, the arbitration agreement be declared as having come to an end. As is apparent from the aforesaid conspectus of facts the petitioner instead of participating in the arbitration proceedings and facilitating Sh. Ram Bahadur in returning the award, procrastinated it by forestalling the proceeding by way of withholding his consent to enlarge the time merely because of the pendency of this petition. There is no doubt that with the series of resignations of as many as six Arbitrators petitioner had left hope in getting the dispute adjudicated by the Arbitrator yet the fact remained that immediate action was taken in appointing another Arbitrator after the resignation of the Arbitrator. In such situation party should always approach the Court seeking direction to the Arbitrator for expediting the proceedings instead of asking the Court to declare the arbitration clause infructuous.

4. It is unfortunate that the statute meant for deciding the disputes between the parties by way of arbitration has become counter productive as is demonstrated by the facts of this case. The object was to get the disputes between the parties adjudicated amicably, expeditiously and inexpensively but the proceedings in the instant case dragged on practically for eight long years when the petitioner put its foot down and declined for the enlargement of time for making the Award. It appears arbitration proceedings could not make any breakthrough and moved at ambling pace on account of series of resignations by the arbitrators. The record of the arbitration proceedings shows that apart from the conduct of the respondent the petitioner also has a share of blame as the petitioner also sought large number of adjournments. After having submitted to the arbitrator for two long years subsequent to the filing of the instant petition, the petitioner did not agree for enlargement of time for making of the Award. Had he agreed, award might have seen light of the day.

5. The instant case obviously does not augur well for the so called effective and less expensive and expeditious remedy of deciding the disputes by mechanism of alternative disputes resolution and has left bad taste in the mouth of everybody. In spite of all these, the proceedings before the Arbitrator cannot be allowed to be scuttled merely because of pendency of the instant petition particularly in view of the conduct of the petitioner that he had already submitted before the arbitrator for two long years. At the same time the proceedings cannot be allowed to be prolonged indefinitely by the arbitrator. In order to save the arbitration proceedings from the onslaught of recalcitrant and non- chalant parties, the better course would be to direct the arbitrator to decide the disputes and make the Award within three months by taking the proceedings on day to day basis and coming with heavy hand on any defaulting or delinquent party so as to send message to them that none of the parties submitting itself for deciding the disputes through the forum of arbitrator and choosing the arbitrator of their own choice can take the system for a ride.

6. The petition is dismissed with the aforesaid observations.

7. The petition shall revive before the Arbitrator Mr. Ram Bahadur who shall return the Award positively within three months by surmounting the obstacles put up by any of the parties in the smooth functioning by taking recourse to the legal provisions. In case Sh. Ram Bahadur, arbitrator is not available and ready to take up the proceedings, the respondent shall appoint another arbitrator within one week.