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TMI Blog2019 (8) TMI 1308X X X X Extracts X X X X X X X X Extracts X X X X ..... a right. The voluntary choice is the essence of waiver. There should exist an opportunity for choice between the relinquishment and an enforcement of the right in question. It cannot be held that there has been a waiver of valuable rights where the circumstances show that what was done was involuntary. That apart, the doctrine of waiver or deemed waiver or estoppel is always based on facts and circumstances of each case, conduct of the parties in each case and as per the agreement entered into between the parties and this exposition has been affirmed by this Court in NBCC Ltd.(2010 (1) TMI 1140 - SUPREME COURT) regarding adherence to the imposition of time limit for the conclusion of the arbitral proceedings. The parties have to stand by the terms of contract including the Arbitrator. There is no provision under the arbitration agreement to condone the delay when agreement between the parties binds them to see that the arbitration proceedings should be concluded within the time prescribed. This time restriction is well within the scope and purport of the Act, 1996 at national and international arbitrations. The time fixed for the arbitration and/or schedule of time li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and it would be open to be examined by the learned Arbitrator under Section 16 of the Act, 1996. The order passed by the Single Judge of the High Court dated 14th November, 2003 was a subject matter of challenge in a writ petition filed under Article 226 of the Constitution of India which was dismissed vide judgment and order dated 20th January, 2004 with an observation that adequate remedies are available under Section 16 of raising all contentious issues relating to the existence of the arbitration agreement and constitution of the Arbitral Tribunal, before the Tribunal. 3. The order of the Division Bench of the High Court dated 20th January, 2004 came to be challenged in a Special Leave Petition (Civil) No. 3919 of 2004 before this Court. This Court issued notice on 8th March, 2004 and stayed proceedings before the learned Arbitrator until further orders. Unfortunately, the sole Arbitrator appointed pursuant to Order dated 14th November, 2003 died in October, 2004. The said special leave petition was dismissed on 24th April, 2007 with the following observation as under:- Heard. In the facts and circumstances of the present case, we are no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... months from the date of service of copy of agreement with a proviso that the Arbitrator would have the power to extend the period for making and publishing the award, with the consent of both the parties. 6. Indisputedly, the first preliminary meeting before the Arbitrator was held on 4th May, 2007. As per clause 5 of the terms of the agreement dated 28th April, 2000, four months period which was available at the disposal of the Arbitrator for passing of an award in the ordinary course of his business subject to extension with the consent of both the parties was to expire on 4th September, 2007. The claimant was permitted to file its statement of claims and a compilation of documents and the defendants to the arbitral proceedings(appellants) were to file written statement and counter claims on or before 6th July, 2007 and thereafter a discovery and inspection was to be completed by 27th July, 2007 and the parties were directed to make their statements of admission and/or denials by 10th August, 2007, in respect of the documents disclosed. A preliminary meeting was to be held on 13th August, 2007. The fact which came on record is that the appellants alleged that they ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the appellants filed a written application before the Arbitrator stating therein that the period of four months from the date of first preliminary meeting had expired on 4th September, 2007 and the Arbitral Tribunal has become functus officio with no power to proceed with the arbitral proceedings any more. But that came to be rejected by the learned Arbitrator vide Order dated 31st December, 2007 which came to be challenged by the appellants in Arbitration Petition( L) No. 59 of 2008 before the High Court of Judicature at Bombay invoking Section 14 of the Act, 1996 seeking a declaration that the Arbitrator has become de jure unable to perform his functions and the mandate to act as an Arbitrator in the arbitral proceedings between the parties has terminated. The arbitration petition filed at the instance of the present appellants came to be dismissed by the High Court under its Order dated 14th March, 2008 holding that the appellants by their conduct have waived their defence to enforce a punctilious observance of the time schedule of four months; and sustaining objection would frustrate the object and purpose of the arbitral proceedings and will bring the whole machinery provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d this has been noticed by the High Court in the impugned judgment and submits that if the objection which has been raised by the appellants is taken to its logical conclusion the very object and intent of the Parliament in enacting the law to facilitate an efficacious recourse to arbitration will be in jeopardy and the High Court has rightly observed that the Arbitrator is justified in coming to the conclusion that the appellants with their conduct waived their objection to enforce a punctilious observance of the time schedule of four months under the terms of the agreement for the Arbitrator to conclude the arbitral proceedings and it needs no interference by this Court. 11. We have heard learned counsel for the parties and with their assistance perused the material available on record. 12. As noted herein earlier, an application was filed by the appellants under Section 14 of the Act, 1996 before the High Court of Bombay with a declaration that the Arbitrator has become de jure unable to perform his functions and the mandate of the Arbitrator to act as an Arbitrator in the arbitral proceedings between the parties stood terminated. As already mentioned, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rator. The Arbitrator having failed to do so rejected their application by an Order dated 31st December 2007 that came to be challenged by the appellant invoking Section 14 of the Act 1996 by filing an Arbitration Petition in the High Court of Bombay with a declaration that the Arbitrator has become je jure unable to perform his functions and the mandate to act as an Arbitrator in the arbitral proceedings between the parties stood terminated which came to be dismissed by the High Court under the impugned judgment dated 14th March, 2008. 15. It is necessary to mention Section 14 and 15 of the Act, 1996 for the sake of convenience which is as under:14 14. Failure or impossibility to act-(1) The mandate of an arbitrator shall terminate and he shall be substituted by another arbitrator, if- (a) he becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay; and (b) he withdraws from his office or the parties agree to the termination of his mandate. (2) If a controversy remains concerning any of the grounds referred to in clause (a) of subsection (1), a party may, unless otherwise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ination of the mandate and the appellants rightly applied to the Court for termination of the mandate of the Arbitrator pursuant to the provisions of this Section and the Court was within its jurisdiction to decide accordingly. 18. It is true that the object of the scheme of the Act, 1996 is to secure expeditious resolution of disputes and it is based on the fulcrum of promptitude but at the same time the Arbitrator is required to adjudicate the disputes in view of the agreed terms of contract and the procedure. Therefore, the arbitration proceedings are supposed to be governed and run by the terms as agreed by the parties. The Arbitrator, therefore, cannot go beyond the clause of the arbitration agreement. We all need to respect the legislative intent underlying the Act. The speedy and alternative resolution to the dispute thus cannot be overlooked but at the same time, proceedings have to be governed and run by the terms agreed between the parties in concluding the arbitral proceedings failing which it will frustrate the mandate of the object of the Act with which it has been legislated by the Parliament to act upon on agreed terms and conditions of the agreement in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral proceedings, that waived their right to question extension of time as it was inpracticable for the Arbitrator to conclude the proceedings within a period of four months and the High Court was of the view that the Act has been legislated with an object to facilitate an efficacious recourse to arbitration failing which it will be in grave peril. 20. The essential element of waiver is that there must be a voluntary and intentional relinquishment of a right. The voluntary choice is the essence of waiver. There should exist an opportunity for choice between the relinquishment and an enforcement of the right in question. It cannot be held that there has been a waiver of valuable rights where the circumstances show that what was done was involuntary. That apart, the doctrine of waiver or deemed waiver or estoppel is always based on facts and circumstances of each case, conduct of the parties in each case and as per the agreement entered into between the parties and this exposition has been affirmed by this Court in NBCC Ltd.(supra) regarding adherence to the imposition of time limit for the conclusion of the arbitral proceedings. The parties have to stand by the term ..... X X X X Extracts X X X X X X X X Extracts X X X X
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