Case Note & Summary
The petitioners, Ramavtar B. Jajodia and Santosh Ramavtar Jajodia, filed a petition under Section 14(2) of the Arbitration and Conciliation Act, 1996, seeking termination of the mandate of the sole arbitrator, Hon'ble Mr. Shyam Lilani (respondent no.1), on the ground of alleged failure to act without undue delay in the arbitral proceedings commenced on 2nd July 2012 between the petitioners and respondent nos.2 to 6. The petitioners contended that the arbitrator had not conducted the proceedings expeditiously, causing delay. The respondents (respondent nos.2 to 5) opposed the petition, arguing that Section 14(2) applies only to de jure inability to act, such as death, resignation, or incapacity, and not to mere delay. The court, presided over by Justice R.D. Dhanuka, analyzed the scope of Section 14(2) and held that the provision is intended for situations where an arbitrator becomes de jure unable to perform his functions, not for allegations of delay. The court noted that the remedy for delay in arbitration proceedings lies under Section 15 of the Act, which allows for substitution of an arbitrator. The court dismissed the petition, finding no merit in the petitioners' claim that the arbitrator had failed to act without undue delay. The decision reinforces the principle that termination of an arbitrator's mandate under Section 14(2) requires a legal incapacity, not merely procedural delays.
Headnote
A) Arbitration - Termination of Mandate - Section 14(2) Arbitration and Conciliation Act, 1996 - De jure inability to act - The court held that termination of mandate under Section 14(2) requires de jure inability to act, such as death, resignation, or incapacity, and not mere delay or failure to act without undue delay. The remedy for delay lies under Section 15 for substitution of arbitrator. (Paras 1-10) B) Arbitration - Delay in Proceedings - Section 14(2) Arbitration and Conciliation Act, 1996 - The court held that delay alone does not constitute failure to act without undue delay under Section 14(2). The petitioners' allegations of delay were not sufficient to terminate the arbitrator's mandate. (Paras 11-15)
Issue of Consideration
Whether the mandate of the sole arbitrator can be terminated under Section 14(2) of the Arbitration and Conciliation Act, 1996 on the ground of alleged failure to act without undue delay in the arbitral proceedings.
Final Decision
The petition is dismissed. The court held that Section 14(2) of the Arbitration and Conciliation Act, 1996 does not apply to allegations of delay; it requires de jure inability to act. The remedy for delay lies under Section 15 for substitution of arbitrator.
Law Points
- Termination of mandate of arbitrator under Section 14(2) of Arbitration and Conciliation Act
- 1996 requires de jure inability to act
- not mere delay
- delay alone does not constitute failure to act without undue delay
- party must seek remedy under Section 15 for substitution of arbitrator
- petition under Section 14(2) not maintainable for delay.
