Limitation For Filing Application U/S 14 Arbitration Act For Substitution Of Arbitrator Is 3 Years: Delhi HC

The present Petition under Section 14 read with Sections 15 and 11 of the Arbitration and Conciliation Act, 1996 was filed for appointment of a substitute Arbitrator.

The bench of Justice Neena Bansal Krishna mentioned the decision in Tarun Kr. Jain, Sole Proprietor vs. M.C.D., 2011 SCS OnLine Del 1789 and observed, “The limitation for filing the Application under Section 14 of the Act, 1996 for substitution of Arbitrator is three years.”

Brief Facts-

The Petitioner, North East Centre Of Technology Application And Reach (NECTAR) and the Respondent, Divine Bamboo Mat Manufacturing Pvt. Ltd. & Anr. entered into the Original Agreement for Technology Development Assistance in lieu of setting up and developing the project for manufacturing of Bamboo Mat Composites. Later a Hypothecation Deed was executed between the parties in New Delhi about the certain present and future moveable assets of the respondent.

Respondent defaulted on its repayment obligations in terms of the Original Agreement and the Supplementary Agreements.

Hence, a notice of invocation served after proposals for settlement failed. The petitioner appointed the sole Arbitrator to adjudicate the disputes between the parties. Upon commencement of arbitral proceedings, the petitioner filed the Statement of Claim before the Arbitrator and the respondent filed an updated Statement of Defence. Thereafter, the respondent filed an Application under Sections 12 and 13 of the Act, 1996 challenging the appointment of an Arbitrator and since then, no proceedings have taken place.

The Court noted that in the present case, the time limit for the mandate of the Arbitrator expired, as per Section 29A of the Act, 1996, after excluding the COVID-19 Pandemic period.

As per the Court, therefore, the present petition was filed for appointment of a substitute Arbitrator to adjudicate the disputes between the parties.

The Court noted that Respondent did not oppose or contest that no proceedings were undertaken by the Arbitrator since 2019 when the Application under Section 12 of the Act, 1996 was made, hence, according to the Court, it is quite evident that the Arbitrator had abandoned the Arbitration proceedings and also has withdrawn from his Office.

Finally, the Court allowed the Petition.

Cause Title: North East Centre Of Technology Application And Reach (NECTAR) v. Divine Bamboo Mat Manufacturing Pvt. Ltd. & Anr. (Neutral Citation: 2024:DHC:2906)

Appearance:

Appellant: Adv. Raghvendra Mohan Bajaj

Respondent: Adv. Durga Dutt, Adv. Pradeep Yadav, Adv. Ratan Singh, Adv. Devendra Rao Madhav

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