Proceedings carried on by the erstwhile Arbitrator after the expiry of its mandate, shall be disregarded by the substitute Arbitrator – Bombay HC
Case Title: Mahaveer Realities & Ors. vs Shirish J. Shah, Dated: 21.07.2023
Facts:
The petitioner, Mahaveer Realities, in its application seeking extension of the time limit for passing of the award, claimed that after the six-month extension period had expired, the proceedings were continued by the Arbitrator and a preliminary award was passed on 15.09.2022 in its favour. The same was challenged by the respondent before the District Judge who rejected its application for stay of the preliminary award.
In view of the same, the petitioner contended that since the parties knowingly proceeded before the Arbitrator even after the expiry of its mandate, the parties would be deemed to have waived their right to object to the continuation of the proceedings after expiry of the mandate.
Sequitur by the court:
👉Referring to the provisions of Section 29A of the A&C Act, the court remarked that the award is required to be made by the Arbitrator within a period of 12 months from the date of completion of pleadings. Though the parties may by consent extend the period by a further period not exceeding six months, there can be no further extension of the mandate of the arbitrator beyond that, the court said.
👉 “Further, this provision is not derogable and hence Section 4 of the Arbitration Act has no application,” it added.
👉Taking note that the mandate of the Arbitrator came to an end in May, 2022, the court said that further extension of mandate can only be from June, 2022.
👉The court thus appointed a substitute arbitrator by further extending the mandate of arbitration.
👉“The time limit for final arguments and passing of the arbitral award as provided in Section 29 A (1), (2) read with the Section 29A (4) and (5) of the Arbitration Act is extended by a period of six months from the date of this Order,” the court said.
It added: “It is clarified that the proceedings will continue from the expiry of mandate of the erstwhile Arbitrator i.e. from June, 2022. The proceedings carried on by the erstwhile Arbitrator after the expiry of the mandate shall be disregarded by the Arbitrator appointed by this Order.”
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