M/S. Jitf Water Infrastructure ... vs M/S. Aquafil Polymers Company ...
2021 Latest Caselaw 1739 Guj

                C/IAAP/8/2021                            ORDER




               IN THEHIGHCOURTOF GUJARATAT AHMEDABAD
                R/PETN.UNDERARBITRATIONACTNO. 8 of 2021
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                   M/S. JITF WATERINFRASTRUCTURELIMITED
                                    Versus
              M/S. AQUAFILPOLYMERSCOMPANYPRIVATELIMITED
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Appearance:
KISHANY DAVE(8293)for the Petitioner(s)No. 1
MR. R.S.SANJANWALA,SENIORADVOCATEWITHMRRASESHH PARIKH,ADVOCATE
WITHMR. VIJAYSINGH,ADVOCATE for the Petitioner(s)No. 1
MR.HEMANGH PARIKH(2628)for the Petitioner(s)No. 1
for the Respondent(s)No. 1
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 CORAM: HONOURABLE MR. JUSTICE BIREN VAISHNAV

                                Date: 05/02/2021
                                 ORALORDER

1 Heard Mr.R.S.Sanjanwala, learned Senior Counsel with

Mr.Vijay Singh, learned advocate with Mr.Rasesh Parikh, learned

advocate for the petitioner.

2 This petition is filed under Section 14 and 32 of the

Arbitration and Conciliation Act, 1996, for the prayer to terminate

the mandate of the sole arbitrator from the arbitration between the

petitioner and the respondent being Reference No.GCCI­ADRC No.

A­042/2018.

3 The facts as submitted by Mr.R.S.Sanjanwala, learned Senior

Counsel, is that the arbitration proceedings which are sought to be

terminated by an appropriate proceeding under Section 14 of the

Arbitration & Conciliation Act, 1996, have been initiated pursuant

C/IAAP/8/2021 ORDER

to the appointment of the arbitrator under Section 18 of the MSME

Act.

3.1 Mr.Sanjanwala, learned Senior Counsel, would draw the

attention of this Court to Section 14 of the Arbitration Act and

submit that the mandate of arbitrator shall be terminated under

two circumstances and in the present case, he would submit that

since the arbitration has become de jure or de facto unable to

perform his functions, an appropriate direction for termination of

the mandate is sought.

3.2 Relying on sub­section 2 of Section 14, the learned Senior

Counsel Mr.Sanjanwala, would submit that an application has to be

made to a Court to decide on the termination of the mandate.

Reading sub­section 2(e)(i) of the Act together with the decision in

the case of Lalitkumar V. Sanghavi vs. Dharamdas V. Sanghavi

& Ors., in Civil Appeal No. 3148 of 2014, the learned Senior

Counsel would rely on paragraphs 11 to 14 thereof and submit that

having regard to the scheme of the Act and on cumulative reading

of Sections 32 and 14, the question whether the mandate of the

arbitrator stood terminated or not can be examined by the Court as

provided under Section 14 (2) of the Act. The said paras 11 to 14

of the judgment read as under:

C/IAAP/8/2021 ORDER

"11 Section14(2) provides that if there is any controversy regarding the termination of the mandate of the arbitrator on any of the grounds referred to in the clause (a) then an application may be made to the Court ­ "to decide on the termination of the mandate".

12 Section 32 of the Act on the other hand deals with the termination of arbitral proceedings.

13 From the language of Section 32, it can be seen that arbitral proceedings get terminated either in the making of the final arbitral award or by an order of the arbitral tribunal under Sub­section 2. Sub­section (2) provides that the arbitral tribunal shall issue an order for the termination of the arbitral proceedings in the three contingencies mentioned in Sub­clauses

(a) to (c) thereof.

14 On the facts of the present case, the applicability of Sub­ clauses (a) and (b) of Section 32(2) is clearly ruled out and we are of the opinion that the order dated 29th October, 2007 by which the Tribunal terminated the arbitral proceedings could only fall within the scope of Section 32, Sub­section (2), Sub­ clause (c) i.e. the continuation of the proceedings has become impossible. By virtue of Section 32(3), on the termination of the arbitral proceedings, the mandate of the arbitral tribunal also comes to an end. Having regard to the scheme of the Act and more particularly on a cumulative reading of Section 32 and Section 14, the question whether the mandate of the arbitrator stood legally terminated or not can be examined by the court "as provided under Section 14(2)".

3.3 He would also rely on a decision in the case of Nimet

Resources Inc & Anr vs. Essar Steels Ltd. Para 8 of the decision

would read as under:

"8 Application in terms of sub­section (2) of Section 14, thus, lies before a 'Court' within the meaning of the 1996 Act."

                 C/IAAP/8/2021                           ORDER



3.4        Section 2(e)(i) of the Arbitration Act, would indicate that

in the case of arbitration other than international commercial

arbitration, the Principal Civil Court of original jurisdiction in a

district, which includes the High Court, in exercise of its ordinary

original civil jurisdiction can decide the questions forming the

subject matter of th arbitration. Section 2(e)(1) of the Arbitration

Act, read as under:

"2(e)....

(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."

4 In view of the fact that the High Court of Gujarat is not

exercising any original civil jurisdiction, an appropriate application

for the prayers under Section 14 will have to be made to the

appropriate principal Civil Court.

In view of the aforesaid observation, the present arbitration

petition No. 8 of 2021 is disposed of with a view to file an

appropriate application before the appropriate Civil Court.

(BIRENVAISHNAV,J) BIMAL