Home Income tax Corporate Income tax Despite an Unjustifiable 8Yr Delay in Proceeding, Allahabad HC Terminates Arbitrator’s Mandate

Despite an Unjustifiable 8Yr Delay in Proceeding, Allahabad HC Terminates Arbitrator’s Mandate

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Despite an Unjustifiable 8Yr Delay in Proceeding, Allahabad HC Terminates Arbitrator’s Mandate
Allahabad High Court's Order for Amit Agarwal

The Allahabad Excessive Court docket has affirmed the termination of the Arbitrator’s function resulting from an unexplained delay of eight years within the proceedings.

Justice Rohit Ranjan Agarwal’s bench famous that the arbitrator presided over the case for an prolonged interval with out advancing it, and swiftly issued the award after a removing request was filed. Consequently, the Allahabad Excessive Court docket dominated that the arbitrator violated Part 14 and terminated their mandate underneath this provision.

Case Details for Amit Agarwal

Beneath Article 227 two writ petitions have been filed difficult the judgment of Industrial Court docket No.1, Meerut, allowing the applying underneath Part 14(2) of the Arbitration & Conciliation Act, 1996 (the “Act”).

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The dispute emerged in 2006 between the applicant (Amit Agrawal) and respondent No.1. The case was referred to the only arbitrator, Pradeep Sharma, on 25.01.2007. An interim award was challenged by respondent No.1 underneath Part 34 of the IT Act, and the applying was allowed in 2018.

Respondent No.1 contested three different circumstances underneath Part 9 of the Act, which have been dismissed in 2007. The one arbitrator, on 03.10.2014, issued an order underneath Part 17 of the Act. Respondent No.1, on 13.10.2014, knowledgeable the arbitrator that, as per Part 14(1)(a) of the Act, the mandate had completed.

The arbitrator held the case pending till 13.08.2015, and on 13.08.2015, respondent No.1 obtained a discover setting 30.08.2015 for the ultimate award. Respondent No.1 filed an utility underneath Part 14(2) on 20.08.2015 earlier than the District Choose, Meerut, which was numbered Arbitration Case No.72 of 2015.

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The arbitrator offered the ultimate award on 24.09.2015. Respondent No.1 filed one other utility underneath Part 14(2) on 31.05.2016, numbered as Arbitration Case No.22 of 2016, later renumbered as Arbitration Case No.142 of 2022. The Ld. District Choose allowed each functions underneath Part 14 of the A&C Act and terminated the mandate of the arbitrator. Aggrieved thereby, the petitioner filed two writ petitions underneath Article 227 difficult the judgment of Industrial Court docket No.1, Meerut, allowing the applying underneath Part 14(2) of the Arbitration & Conciliation Act, 1996 (the “Act”).

Submissions of the Events

Petitioner’s Submissions

  • Part 14(2) of the Act permits a celebration to use to the court docket for termination of the arbitrator’s mandate.
  • The appliance was moved on 20.08.2015, earlier than the 2016 modification to Part 14(1). Due to this fact, the amended act wouldn’t apply.
  • The delay have to be “undue” to justify termination; mere delay just isn’t sufficient.
  • The petitioner contested the interim award of 2007, and the matter continues to be pending in court docket.
  • The seat of arbitration was at Pune or Mumbai, not Meerut.

Submissions of Respondent

  • The arbitral seat was Meerut, as approved through correspondence and selections like BGS SGS Soma JV vs. NHPC Restricted.
  • Beneath Part 14(2) the applying was maintainable due to the arbitrator’s extreme delay.
  • The delay between 2007 and 2014, with no development, explains termination.
  • The arbitrator moved swiftly after the applying underneath Part 14(2) was filed.

Allahabad Excessive Court docket Evaluation and Observations

The court docket addressed two main considerations: the placement of the arbitration and the validity of the Part 14(2) utility. It confirmed Meerut because the arbitration location based mostly on correspondence and authorized precedent.

Relating to the Part 14(2) utility, the court docket deemed it legitimate because of the arbitrator’s extended inactivity. The arbitrator’s lack of progress from 2007 to 2014, failure to schedule dates, and sudden rush after the Part 14(2) utility all contributed to establishing an unjustifiable delay.

Grounded within the idea of ‘undue delay,’ the court docket upheld the termination of the arbitrator’s function. It emphasised that ‘undue delay’ isn’t simply any delay however requires a displaying of extreme, unjustifiable, or pointless delay. The arbitrator’s sluggish response, together with a selected reference within the ultimate award pending the Part 14(2) determination, justified ending the mandate.

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