Case Note & Summary
The High Court of Bombay heard two commercial arbitration applications filed by Applicants seeking appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996. The disputes arose from Dealership Agreements with Ghosh Brothers Automobiles and others, involving outstanding payments. A previous arbitrator had been appointed by BCCI but withdrew due to ill health in 2021. The applicants initially filed petitions for extension of mandate and substitution, which were disposed of with liberty to file under Section 11. The respondents opposed, arguing that the arbitration mandate had expired. The Court held that the termination of the arbitrator's mandate under Section 14 does not end the arbitral proceedings under Section 32, and no limitation period applies for substitution in such composite applications. Consequently, the Court appointed a sole arbitrator to resume proceedings from where they were left off.
Headnote
The High Court of Judicature at Bombay, in Commercial Arbitration Applications, dealt with applications filed by Applicants under Section 11 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) for appointment of an arbitrator -- The applications arose from Dealership Agreements dated 26 December 2012 and 9 July 2013, where disputes involved outstanding payments of Rs. 20,80,73,491.61 -- The previous arbitrator, appointed by Bombay Chamber of Commerce & Industry (BCCI), withdrew on 18 March 2021 due to ill health after proceedings from 4 July 2018 to 29 April 2020 -- The Court held that termination of the arbitrator's mandate under Section 14 of the Arbitration and Conciliation Act, 1996 does not automatically terminate arbitral proceedings under Section 32, relying on judgments in Kifayatullah Haji Gulam Rasool and Ors. vs. Bilkish Ismail Mehsania and Ors. and Dani Wooltex Corporation and others vs. Sheil Properties Private Limited and Anr -- It further held that no period of limitation applies for seeking substitution of arbitrator in a composite application under Section 11 read with Sections 14 and 15 of the Arbitration and Conciliation Act, 1996 -- The Court appointed a sole arbitrator to adjudicate the disputes, directing the arbitrator to proceed from the stage where the previous arbitrator left off
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Issue of Consideration: The Issue of whether the present application under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of a substituted arbitrator is maintainable after the previous arbitrator withdrew due to ill health and whether any limitation period applies
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Final Decision
The Court allowed the applications and appointed a sole arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996, directing the arbitrator to proceed from the stage where the previous arbitrator left off
