Period Of Twelve Months Under Section 29A(1) Of Arbitration Act Commences Only When Pleadings Are Complete: Karnataka HC
|The Karnataka High Court observed that a period of twelve months to make an award will commence only when pleadings are completed.
The Court reiterated that, while calculating the period, any stay on arbitral proceedings shall have to be excluded from determining the time for making the award.
The Petitioner herein, who is a Respondent in the Arbitral Proceeding, challenged the order passed by the Arbitrator and sought the declaration to declare the mandate of the Arbitral Tribunal terminated.
The Division Bench of Justice SG Pandit and Justice CM Poonacha observed, “When such surrejoinder is filed on the liberty granted by this Court, it would form part of the pleadings. Without looking into the surrejoinder when taken on record, the Arbitral Tribunal could not have proceeded further. Moreover, the copy of proceedings before the Arbitral Tribunal which are placed on record would demonstrate that from the date of filing the above stated writ petition, the petitioner for one or the other reason sought adjournment and the proceedings was adjourned at the instance of the petitioner. In the above circumstances, the Arbitral Tribunal is right in observing that in terms of Section 29A(1) of 1996 Act, period of twelve months to make award would commence from 20.05.2023 i.e., when the surrejoinder filed by the petitioner on the liberty granted by this Court in W.P.No.10091/2023, was taken on record.”
Senior Advocate S Basavara appeared for the Petitioner whereas Senior Advocate E Om Prakash appeared for the Respondents.
The Court also reiterated, “When there was stay of proceedings before the Arbitral Tribunal, the Arbitral Tribunal could not have proceeded further. It is settled position of law that for calculating period of limitation or for calculating the time granted by the Court to perform certain acts, if there is stay in any other proceedings preventing the authority or the Court proceeding further in the matter, such period shall have to be excluded. In other words, the period occupied by the order of stay made by a Court shall be excluded. In the instant case also, the period during which the proceedings before the Arbitral Tribunal was stayed shall have to be excluded for calculating or determining twelve months period for making award in terms of Section 29A(1) of 1996 Act.”
The Petitioner submitted that he filed a surrejoinder after the leave was granted by the Single Judge of the High Court. He further submitted that the Arbitral Tribunal was stayed for 77 days by the High Court’s interim order due to pending proceedings under Section 95 of the Insolvency and Bankruptcy Code before the National Company Law Tribunal.
The Court also highlighted that from the order sheet of the Arbitral proceedings, it was seen that the Petition took more than three to four adjournments to file its objection statement and also to file a counterclaim. Thereafter, took several adjournments and also sought an extension of time to file the surrejoinder.
Accordingly, for the above reasons, the Court dismissed the petition and directed the Petitioner to pay the costs of Rs. 25,000/- to the Karnataka State Legal Services Authority.
Cause Title: Buoyant Technology Constellations Pvt. Ltd. v. Manyata Infrastructure Developments Pvt. Ltd. and Anr.
Appearances:
Petitioner: Senior Advocate S Basavara and Advocate Anish Acharya.
Respondents: Senior Advocate E Om Prakash and Advocates N Vishwas and R Moneshaa