Case Note & Summary
The petitioner, Wanbury Ltd., filed a petition under sections 14(1)(a), 14(2), and 32(2)(c) of the Arbitration and Conciliation Act, 1996, seeking a declaration that the mandate of the arbitral tribunal constituted by an order dated 8th October 2013 in Arbitration Petition No.46 of 2012 is terminated. The petitioner also sought to set aside the tribunal's order dated 30th September 2014 which condoned the delay in filing the statement of claim by the respondent, Candid Drug Distributors. The background involves a C&F agency agreement dated 13th January 2003, terminated on 6th April 2006. The respondent filed a suit in Guwahati which was dismissed for lack of territorial jurisdiction, upheld by the High Court on 10th February 2011. Subsequently, the respondent filed an arbitration petition under section 11(6) of the Act, and an arbitral tribunal was appointed on 8th October 2013, confirmed by the Supreme Court on 31st January 2014. On 11th February 2014, the tribunal directed the respondent to file the statement of claim. The respondent failed to do so for over 7 months, filing an application for condonation of delay on 30th September 2014, which the tribunal allowed. The petitioner argued that the delay was unreasonable and the tribunal had no power to condone such delay. The court held that the respondent's failure to file the claim for 7 months without sufficient cause constituted an unreasonable delay, and the tribunal's order condoning the delay was invalid. Consequently, the court declared the mandate of the arbitral tribunal terminated and set aside the order dated 30th September 2014.
Headnote
A) Arbitration - Termination of Mandate - Sections 14(1)(a), 14(2), 32(2)(c) Arbitration and Conciliation Act, 1996 - Unreasonable Delay - Claimant failed to file statement of claim for 7 months after direction - Tribunal condoned delay without sufficient cause - Held that the mandate of the arbitral tribunal is terminated and the order condoning delay is set aside (Paras 2-10).
Issue of Consideration
Whether the mandate of the arbitral tribunal stands terminated due to the claimant's failure to file the statement of claim within the time prescribed and whether the tribunal's order condoning the delay is valid.
Final Decision
The court allowed the petition, declared that the mandate of the arbitral tribunal is terminated, and set aside the order dated 30th September 2014 passed by the arbitral tribunal condoning the delay.
Law Points
- Termination of mandate of arbitral tribunal
- Unreasonable delay in filing statement of claim
- Condonation of delay
- Section 14 and 32 of Arbitration and Conciliation Act
- 1996
Case Details
2015 LawText (BOM) (07) 82
Arbitration Petition No. 1461 of 2014
Mr. P.K. Samdhani, Senior Advocate, a/w. Mr. Vishal Talsania, Mr. Mahesh Londhe, Mr. Akshay Udeshi, i/b. M/s. Sanjay Udeshi & Co. for the Petitioner. Mr. Dushyant Purekar for the Respondents.
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Petition under sections 14(1)(a), 14(2), and 32(2)(c) of the Arbitration and Conciliation Act, 1996 for termination of mandate of arbitral tribunal and setting aside order condoning delay.
Remedy Sought
Declaration that the mandate of the arbitral tribunal is terminated and setting aside the order dated 30th September 2014 condoning delay.
Filing Reason
The respondent failed to file statement of claim within the time directed by the tribunal, and the tribunal condoned the delay without sufficient cause.
Previous Decisions
Suit dismissed for want of territorial jurisdiction on 19th May 2008, upheld by Guwahati High Court on 10th February 2011. Arbitral tribunal appointed on 8th October 2013, confirmed by Supreme Court on 31st January 2014.
Issues
Whether the mandate of the arbitral tribunal stands terminated due to the claimant's failure to file the statement of claim within the time prescribed.
Whether the tribunal's order condoning the delay in filing the statement of claim is valid.
Submissions/Arguments
Petitioner argued that the respondent's delay of 7 months in filing the statement of claim was unreasonable and the tribunal had no power to condone such delay.
Respondent argued that the delay was not intentional and the tribunal had discretion to condone the delay.
Ratio Decidendi
The mandate of an arbitral tribunal can be terminated under section 14(1)(a) of the Arbitration and Conciliation Act, 1996 if the claimant fails to file the statement of claim within the time prescribed without sufficient cause, rendering the tribunal unable to proceed. The tribunal's order condoning such delay without proper justification is invalid.
Judgment Excerpts
By this petition filed under section 14(1) (a), 14(2) and 32(2) (c) of the Arbitration and Conciliation Act, 1996, the petitioner seeks a declaration that the mandate of the arbitral tribunal constituted by an order dated 8th October, 2013 in Arbitration Petition No.46 of 2012 is terminated.
The respondent herein (original claimant) was directed to file statement of claim togetherwith all the documents.
Procedural History
Suit filed on 30th March 2007 dismissed for want of territorial jurisdiction on 19th May 2008, upheld on 10th February 2011. Arbitration petition under section 11(6) filed on 20th January 2011, tribunal appointed on 8th October 2013, confirmed by Supreme Court on 31st January 2014. Tribunal directed filing of claim on 11th February 2014. Respondent filed condonation application on 30th September 2014, allowed by tribunal. Petitioner filed present petition on 2014.
Acts & Sections
- Arbitration and Conciliation Act, 1996: 14(1)(a), 14(2), 32(2)(c)
