5 Important Supreme Court Judgments On Arbitration [January 2024 To June 2024]

Arbitrator's Power Under Section 32(2)(c) Can Be Exercised Only If Continuation Of Proceedings Has Become Unnecessary Or Impossible: Supreme Court Case Title: Dani Wooltex Corporation & Ors. vs SheilProperties Pvt. Ltd. & Anr. Case Number: CIVIL APPEAL NO.6462 OF 2024 The Supreme Court bench of Justice Abhay S. Oka and Justice Pankaj Mithal held that the power under Section 32(2)(c) of the Arbitration and Conciliation Act, 1996 can be exercised only if, for some reason, the continuation of proceedings has become unnecessary or impossible. The bench held that the mere existence of a reason for terminating the proceedings is not sufficient. The reason must be such that the continuation of the proceedings has become unnecessary or impossible. It held that: “The abandonment of the claim by a claimant can be a ground to invoke clause c of subsection 2 of Section 32 The abandonment of the claim can be either express or implied The abandonment cannot be readily inferred There is an implied abandonment when admitted or proven facts are so clinching that the only inference that can be drawn is of the abandonment Only if the established conduct of a claimant is such that it leads only to one conclusion that the claimant has given up hisher claim can an inference of abandonment be drawn Even if it is to be implied there must be convincing circumstances on record which lead to an inevitable inference about the abandonment Only because a claimant after filing his statement of claim does not move the Arbitral Tribunal to fix a date for the hearing the failure of the claimant per se will not amount to the abandonment of the claim” Parliament Should Consider Amending Arbitration Act To Prescribe Limitation Period To File S.11 Application : Supreme Court Case Details: M/S Arif Azim Co Ltd v. M/S Aptech Ltd. Arbitration Petition No. 29 of 2023 In a recent verdict, the Supreme Court delved into the crucial question of whether the Limitation Act, 1963 is applicable to applications for the appointment of arbitrators under Section 11(6) of the Arbitration and Conciliation Act, 1996. The court highlighted the absence of a statutory prescription regarding the time limit for such applications and expressed concerns about the unduly long three-year period allowed for filing under Article 137 of the Limitation Act. While recognizing the legislative vacuum, the court urged Parliament to consider amending the Act to prescribe a specific limitation period for filing applications under Section 11(6). The decision emphasized the need for expeditious resolution of commercial disputes and addressed the potential impact of the absence of a time-bound framework. In its concluding part, the Court observed : “ 94. … this Court while dealing with similar issues in many other matters has observed that the applicability of Section 137 to applications under Section 11(6) of the Act, 1996 is a result of legislative vacuum as there is no statutory prescription regarding the time limit. We would again like to reiterate that the period of three years is an unduly long period for filing an application under Section 11 of the Act, 1996 and goes against the very spirit of the Act, 1996 which provides for expeditious resolution of commercial disputes within a time-bound manner. Various amendments to the Act, 1996 have been made over the years so as to ensure that arbitration proceedings are conducted and concluded expeditiously. We are of the considered opinion that the Parliament should consider bringing an amendment to the Act, 1996 prescribing a specific period of limitation within which a party may move the court for making an application for appointment of arbitrators under Section 11 of the Act, 1996…” Opined Justice Pardiwala. The bench comprising CJI DY Chandrachud and Justices JB Pardiwala and Manoj Misra through its decision, highlighted the need to have clarity in the limitation period for the appointment of the arbitrator, and the immediate filling of the said legislative vacuum. The present case dealt with an arbitration dispute relating to the appointment of an arbitrator under S.11(6). One of the key questions that the court was tasked to examine was - 'Whether the Limitation Act, 1963 is applicable to an application for appointment of arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996? If yes, whether the present petition is barred by limitation?' Section 11(6) of the Arbitration and Conciliation Act, 1996 pertains to the procedure for the appointment of arbitrators. This provision outlines the steps and responsibilities when a party seeks the court's assistance in appointing an arbitrator or a panel of arbitrators. Once the applicant has completed all the necessary steps and the application satisfies judicial scrutiny, the court becomes duty-bound to appoint an arbitrator and refer the matter to the arbitral...

5 Important Supreme Court Judgments On Arbitration [January 2024 To June 2024]

Rajesh Kumar

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