Supreme Court of India was dealing with the petition where the respective High Courts have sent the statements regarding pending applications under Section 11(6) of the Arbitration and Conciliation Act, pending in the respective High Courts.
SC stated that it is seen that numbers of applications under Sections 11(5) and 11(6) of the Arbitration Act are pending since more than one year. In many High Courts, applications for appointment of the arbitrator(s) are pending for more than four to five years. Some of the defective applications are pending since 2016 onwards.
SC further stated that pendency of large number of applications under Section 11(5) and 11(6) of the Arbitration Act, shows a very sorry state of affairs. If the Commercial disputes are not resolved at the earliest, not only it would affect the commercial relations between the parties but it would also affect economy of the country. It may affect the ease of doing business in the country.
SC stated that if the applications under Sections 11(5) and 11(6) of the Arbitration Act for appointment of arbitrators are kept pending for a number of years, it would defeat the object and purpose of the enactment of the Arbitration and Conciliation Act as well as the Commercial Courts Act. The litigant may lose the faith in the justice delivery system, which may ultimately affect not only rule of law but commerce and business in the country. Therefore, the applications under Sections 11(5) and 11(6) of the Arbitration Act and other applications, either for substitution and/or change of the Arbitrator have to be decided and disposed of at the earliest.
SC Held:
After evaluating submissions made by both the parties the SC held that “In that view of the matter, we request all the Chief Justices of the respective High Courts to ensure that all pending applications under Sections 11(5) and 11(6) of the Arbitration Act and/or any other applications either for substitution of arbitrator and/or change of arbitrator, which are pending for more than one year from the date of filing, must be decided within six months from today. The Registrar General(s) of the respective High Courts are directed to submit the compliance report on completion of six months from today.”
Case Title: M/s Shree Vishnu Constructions v. The Engineer in Chief, Military Engineering Service & Ors.
Bench: J. M.R. Shah and J. B.V. Nagarathna
Citation: SPECIAL LEAVE PETITION (C) NO. 5306 OF 2022
Decided on: 19th May, 2022
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