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TMI Blog2008 (3) TMI 742X X X X Extracts X X X X X X X X Extracts X X X X ..... Judge of the Supreme Court. The petitioners are party respondents to the arbitral proceedings. The third respondent to the present proceedings is the Court Receiver who has been appointed as Receiver of the properties and assets of the partnership. 3. Placing reliance on a document of 28th April, 2000 as constituting an arbitration agreement between the first respondent and the partnership, the first respondent invoked arbitration in April, 2003. The first respondent instituted an application under Section 11 of the Act. By an order dated 14th November, 2003, a learned Single Judge of this Court appointed Mr. Justice V.D. Tulzapurkar, former Judge of the Supreme Court as sole arbitrator, recording that without prejudice to their rights and contentions, learned Counsel for the parties had unanimously agreed to the appointment. While disposing of the application under Section 11, the learned Single Judge held that the second and third respondents before the Court in those proceedings would be entitled to challenge the jurisdiction of the Arbitrator and the validity and effect of the arbitration agreement. A Writ Petition under Article 226 of the Constitution filed by the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have received the statement of claim on 6th June, 2007. By a letter dated 11th June, 2007, the petitioners' Advocate sought an extension of time for a period of six weeks after receipt of a compilation of documents, in order to file a reply. The compilation of the documents is stated to have been received on 15th June, 2007. On 18th June, 2007, the learned Arbitrator, in a letter addressed to the petitioners' Advocate, observed that the stage of discovery and inspection would come after the parties filed their pleadings and there was no justification for the petitioners herein in not filing their written statement and counter claim on the pretext that the claimants had not filed their compilation of documents. Since, however, the claimants forwarded their compilation of documents albeit, with a delay of two weeks, the learned Arbitrator granted an extension of time until 20th July, 2007 for the filing of the written statement and counter claim, if any, and a compilation of the documents. Correspondingly, all other dates were to stand extended by two weeks. A preliminary meeting was fixed on 27th August, 2007. 6. By a letter dated 19th June, 2007, the Advocate for the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... des that the contention now taken up by respondent Nos. 2 and 3 should have been urged on 4th May, 2007. He apologises that on that day he had not read the papers and had not taken proper instructions from his clients. He states that now he has been categorically instructed by his clients not to consent to any extension of time. The learned Arbitrator observed that had this point been urged on 4th May, 2007, a shorter time frame could have been fixed and dates would have been allotted and proceedings completed within time. The learned Arbitrator recorded that it was not now possible to complete the proceedings and pass an award even if the date of the receipt of the agreement is taken as 4th June, 2007. The learned Arbitrator observed that it would be more appropriate if the claimants obtained an extension of time or a clarification from the Supreme Court that the time could be extended by the Tribunal even without the consent of respondent Nos. 2 and 3 to the arbitral proceedings. The next date of hearing was to be fixed after parties obtained an extension of time or a clarification from the Supreme Court. 8. The first respondent thereafter, by its Advocate's letter date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor's appointment. Since the petitioner agreed to the appointment of the present Arbitrator by the Supreme Court, the petitioners have been held to have waived, in effect, their objection relating to the mandate of the Arbitrator terminating on the expiry of the time stipulated in the arbitration agreement. According to the petitioners, the learned Arbitrator has failed to distinguish between the mandate of the Arbitrator having come to end and the arbitral proceedings being terminated. The contention of the petitioners is that the earlier Arbitrator expired on 1st October, 2004 upon which his mandate came to an end and a fresh period is, therefore, required to be computed from the date when a copy of the agreement was sent to the new Arbitrator. The petitioners claim that they have raised an objection before the expiry of the time stipulated in the arbitration agreement and in the absence of their consent, it is not open to the Arbitrator to proceed with the arbitral proceedings. In support of his case, Counsel appearing on behalf of the petitioners has relied upon the judgment of a learned Single Judge of the Delhi High Court in Shyam Telecom Ltd. v. ARM Ltd. 2004(3) R.A.J. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e withdraws from his office; or (ii) By or pursuant to the agreement of parties. The termination of the mandate of an Arbitrator does not result in the termination of the arbitral proceedings because where the mandate of the Arbitrator has terminated, a substitute arbitrator can be appointed under Sub-section (2) of Section 15, according to the rules that were applicable to the appointment of the Arbitrator being replaced. In such a case, the appointment of a substitute Arbitrator is law a continuation of the existing arbitral proceedings. Sub-section (3) of Section 15 provides that unless otherwise agreed by the parties, any hearings previously held may be repeated at the discretion of the Tribunal. Moreover, under Sub-section (4) unless otherwise agreed, an order or ruling of the Arbitral Tribunal made prior to the replacement of an Arbitrator shall not be invalid solely because there is a change in the composition of the Arbitral Tribunal. The termination of the mandate of an Arbitrator followed by the appointment of a substitute Arbitrator only results in a change in the composition of the Arbitral Tribunal. The arbitral proceedings are not terminated. The termination of the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings indicates that on 4th May, 2007, parties stated before the Arbitrator that the statement of claim had been filed before the earlier Arbitrator, but since those papers were not available, the claimant was to file a statement of claim before 1st June, 2007. The respondents to the arbitral proceedings were granted time until 6th July, 2007 to file the written statement. On 22nd May, 2007, the petitioners' Advocate forwarded a copy of the statement of claim which had been filed before the earlier Arbitrator. On 4th June, 2007, the Advocate for the claimant forwarded a copy of the fresh statement of claim. On 6th June, 2007, the learned Arbitrator addressed a communication to the Advocate for the petitioners enquiring as to whether the petitioners had any objection to the fresh statement of claim being filed. The petitioners had objections. On 11th June, 2007, the petitioners sought an extension of time to file their reply. The learned Arbitrator correctly came to the conclusion in his communication dated 18th June, 2007 that there was no justification for not filing the written statement under the pretext that the claimants had not filed a compilation of documents. Be tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated before the learned Arbitrator on 27th August, 2007 that the contention which was sought to be taken up ought to have been urged on 4th May, 2007, but at that stage he had not read his papers. The petitioners' Advocate unfortunately sought to controvert the correctness of what was recorded by the learned Arbitrator in his order dated 27th August, 2007. The Arbitrator, as the record would show, was constrained to set the record straight by a communication dated 27th September, 2007. The learned Arbitrator is justified in coming to the conclusion that the petitioners have by their conduct waived their objection to enforce a punctilious observance of the time schedule of four months. To adopt any other construction would frustrate the object and purpose of arbitral proceedings and bring the whole machinery provided by the Act to facilitate an efficacious recourse to arbitration into grave peril. Speaking for myself, I would decline to accept a construction which would lead to that result. 14. The Court is duty bound to effectuate the object and intent of Parliament in enacting the law and the view which I have taken is one which will protect the object which Parliament ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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