ARBITRATION PETITION NO. 56 OF 2013

Arbitration Petition under Section 14 of Arbitration and Conciliation Act, 1996 seeking declaration of termination of arbitrator's mandate and entitlement to approach Facilitation Council under MSMED Act.

Declaration that the mandate of arbitrator stood terminated and that the petitioner is entitled to approach the Micro and Small Scale Enterprises Facilitation Council.

Alleged inordinate delay in arbitration proceedings, expiry of contractual time for award, and registration of petitioner as Micro Enterprise under MSMED Act.

Earlier court orders: Section 9 petition dismissed; Section 11 application dismissed; appeal against Section 11 dismissal dismissed; Section 12 challenge rejected; various applications before arbitrators rejected; no final award made.

Whether under Section 14 of the Arbitration and Conciliation Act, 1996, the mandate of the arbitrator terminated due to failure to make award within the contractual time limit and delay. Whether Section 24 of the Micro, Small and Medium Enterprises Development Act, 2006 overrides the Arbitration Act and entitles the petitioner to approach the Facilitation Council instead of continuing with arbitration.

Petitioner argued that under clause 22(g) of the contract, the arbitrator was required to make award within two years from entering upon reference, extendable by one year only with parties' agreement; since more than three years had elapsed, the mandate terminated automatically under Section 14(1). Petitioner contended that as a Micro Enterprise registered under the MSMED Act, the provisions of that Act, specifically Section 24, have overriding effect over the Arbitration Act, and thus the Council alone has jurisdiction.

By this petition filed under section 14 of the Arbitration and Conciliation Act, 1996 (for short 'Arbitration Act 1996), the petitioner seeks declaration that the mandate of the learned Arbitrator, respondent no.1 herein stood terminated under section 14 of the Arbitration Act 1996, and the petitioner is entitled to approach the Micro and Small Scale Scale Enterprises Facilitation Council constituted under the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 The mandate of an arbitrator shall terminate if he becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay. It is submitted that after the expiry of two years of the arbitrator entering upon the reference, extension could not and cannot be granted beyond further period of one year and that also only if both parties agree for grant of such extension in writing.

1. Two supply contracts entered on 12.4.1999 and 4.5.2000. 2. Dispute arose over deductions; petitioner filed Section 9 petition, dismissed by Single Judge on 2.4.2001; appeal dismissed by Division Bench on 11.6.2002. 3. Petitioner called for appointment of independent arbitrator on 21.1.2003; filed Section 11(6) application on 10.4.2003. 4. Respondent no.2 appointed Mr. A.M. Jagdale as sole arbitrator, accepted on 22.6.2003. Section 11 application dismissed on 17.9.2003; appeal dismissed. 5. Petitioner challenged appointment under Section 12 on 9.1.2004; rejected on 18.6.2004. 6. Statement of claim filed on 28.7.2004; written statement on 27.1.2005; rejoinder on 25.2.2005. 7. Application under Sections 18 and 24 filed on 25.2.2005; rejected on 26.8.2005. 8. Arbitrator made awards in 11 similar matters on 29.11.2005 but not in this matter; retired on 30.11.2005. 9. Respondent proposed Mr. C.P. Joshi, objected; appointed Mr. A.C. Das on 29.11.2007; petitioner objected and filed applications under Sections 13,14,16 on 8.2.2008. 10. Petitioner registered as Micro Enterprise on 8.2.2008 under MSMED Act. 11. Mr. R. Suresh appointed as sole arbitrator on 12.3.2008, accepted on 14.5.2008. 12. Petitioner filed application on 31.5.2008 under Sections 13,14,16 before him. 13. Various correspondences and hearings, no progress. 14. On 24.8.2012, petitioner raised plea that mandate ceased and sought to approach Council. 15. Petitioner filed this Arb. Petition No. 56 of 2013 on 10.9.2012.

• Arbitration and Conciliation Act, 1996: Section 9, Section 11(6), Section 12, Section 13, Section 14, Section 16, Section 18, Section 24
• Micro, Small and Medium Enterprises Development Act, 2006: Section 24