Delay in disposing of an application amount to defeating the very purpose of initiation of arbitration proceedings; Section 34 Of The A&C Act Application Pending For 13 Years: Madhya Pradesh High Court
The Madhya Pradesh High Court has expressed strong displeasure for keeping a petition under Section 34 of THE ARBITRATION AND CONCILIATION ACT, 1996 [A&C Act] pending for 13 years, adding that such delay in disposing of an application defeats the purpose of initiation of arbitration proceeding.
This was seen in the case of Dharamdas Tirthdas Constructions Pvt. Ltd. v. Union of India, Arbitration Appeal No. 33 of 2022, presided over by Hon’ble Shri Justice Subodh Abhyankar.
Facts of the case
The parties to the case entered into agreement that had invited a tender in respect of construction back in 2001, The agreement had contained an arbitration clause for settlement of the dispute between the parties. A dispute aroused between the parties related to payments which was referred to the arbitrator for resolution.
Aggrieved by the award, the appellant challenged it under Section 34 of the A&C Act. The lower court rejected the challenge petition filed by the appellant; however, the Court took 13 long years to decide the petition. Aggrieved thereby, the appellant filed the present appeal under Section 37 of the A&C Act.
The Arbitrator passed his final Award in 2009. The aforesaid Award was challenged by the appellant herein, under Section 34 of the Act of 1996, and has been decided only after a period of around 13 years.
Ground of challenge
Question which falls for consideration before this Court is that whether an arbitration award can be set at nullity on the ground that the appointment of the Arbitrator itself was in violation of the provisions of Section 12(5) of the Act of 1996, even though the appointment was made prior to 23.10.2015 when the Arbitration and Conciliation (Amendment) Act of 2015 (hereinafter, the Amendment Act, 2015) came into force.
Judgement of the case
In the considered opinion of this Court, that the provisions of S.12(5) would be applicable prospectively by the reason of s.26 of the Amendment Act, 2015 the present petition being devoid of merits stands dismissed {referring to case of Bharat Broadband Network Limited (supra)}
Further the court addressed the issue of delay in deciding Section 34 Application by the lower court. The Court expressed its strong displeasure for keeping an application pending for a period of around 13 years in the court. Such delay in disposing of an application literally amounts to defeating the very purpose of initiation of arbitration proceedings, which is, to expedite the final disposal of an arbitration matter. Such delay also mocks the very object for which the Arbitration and Conciliation Act, 1996 was promulgated. And thus, to avoid any such further delays in such other Application already filed or to be filed under Section 34 of the Act of 1996 before the concerned court in every District in the entire State of Madhya Pradesh, it is directed that all such applications filed under Section 34 of the Act, 1996 pending before the concerned Court shall be strictly decided as expeditiously as possible, in accordance with s.34(6) of the Act of 1996.
It is also directed that in any case where the pendency of such application spills over more than one year, the concerned Judge shall inform the Registry of this Court regarding the reasons for delay in disposing of the said case.
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JUDGEMENT REVIEWED BY VYSHNAVI KRISHNAN.