Case Note & Summary
The petitioners, Neeta Lalit Sanghavi and Hemanshu Lalit Sanghavi, are the legal heirs of the deceased partner, Lalitkumar Vanmalidas Sanghavi. They filed a petition under Sections 9 and 14 of the Arbitration and Conciliation Act, 1996, seeking condonation of delay in filing the petition, setting aside the termination of arbitral proceedings by the arbitral tribunal vide award dated 29th October, 2007, and constitution of a new arbitral tribunal as per the arbitration agreement contained in the Deed of Partnership dated 20th October, 1962. The dispute arose out of a partnership firm involving the petitioners' father and the respondents. Earlier, an arbitrator was appointed, but the proceedings were terminated on the ground that the arbitrator's mandate had ended due to his death. The petitioners contended that they were not aware of the termination order and were pursuing remedies before other forums. The respondents opposed the petition, arguing that the delay was inordinate and the termination was valid. The court, after hearing the parties, held that the delay was sufficiently explained and condoned the same. It further held that the termination of arbitral proceedings was not in accordance with law as the arbitration agreement provided for appointment of a substitute arbitrator. Consequently, the court set aside the termination and directed the appointment of a new arbitrator in accordance with the arbitration agreement. The court also continued the earlier order appointing a Court Receiver over the partnership assets.
Headnote
A) Arbitration - Condonation of Delay - Section 9 and 14 of Arbitration and Conciliation Act, 1996 - Petition filed by legal heirs of deceased partner seeking condonation of delay in filing petition to set aside termination of arbitral proceedings - Court held that delay was sufficiently explained as petitioners were pursuing remedies before other forums and were not aware of the termination order - Delay condoned (Paras 1-10). B) Arbitration - Termination of Arbitral Proceedings - Section 14 of Arbitration and Conciliation Act, 1996 - Arbitral tribunal terminated proceedings on ground that mandate had terminated due to death of arbitrator - Court held that termination was not in accordance with law as the arbitration agreement provided for appointment of substitute arbitrator - Termination set aside (Paras 11-20). C) Arbitration - Appointment of Substitute Arbitrator - Section 15 of Arbitration and Conciliation Act, 1996 - Partnership deed dated 20th October, 1962 contained arbitration clause for appointment of arbitrator by consent or by Court - Court directed appointment of new arbitrator in accordance with the arbitration agreement (Paras 21-25).
Issue of Consideration
Whether the delay in filing the petition under Sections 9 and 14 of the Arbitration and Conciliation Act, 1996 should be condoned and whether the termination of arbitral proceedings by the arbitral tribunal should be set aside, and a new arbitrator appointed.
Final Decision
The court allowed the petition, condoned the delay, set aside the termination of arbitral proceedings dated 29th October, 2007, and directed appointment of a new arbitrator in accordance with the arbitration agreement contained in the Deed of Partnership dated 20th October, 1962. The order appointing the Court Receiver was continued.
Law Points
- Condonation of delay
- Termination of arbitral proceedings
- Appointment of substitute arbitrator
- Section 9
- Section 14
- Section 15
- Arbitration and Conciliation Act
- 1996
- Partnership deed
- Legal representatives
- Sufficient cause
