Allahabad High Court Has No Ordinary Original Civil Jurisdiction, Cannot Extend Arbitrator's Mandate U/S 29A A&C Act

The Allahabad High Court has held that it lacks jurisdiction to extend the mandate of an arbitrator under Section 29A of the Arbitration and Conciliation Act, 1996, on the ground that it does not exercise ordinary original civil jurisdiction and therefore does not fall within the definition of “Court” under Section 2(1)(e)(i) of the Act. Consequently, the High Court ruled that it cannot entertain writ petitions seeking time-bound or expeditious disposal of arbitral proceedings when a specific statutory remedy lies before the competent civil court.The bench of Justice Mahesh Chandra Tripathi and Justice Kunal Ravi Singh held“The High Court of Judicature at Allahabad does not exercise ordinary original civil jurisdiction and therefore does not fall within the definition of "Court" under Section 2(1)(e)(i) of the Arbitration Act, 1996. Consequently, this Court cannot exercise jurisdiction under Section 29A of the Arbitration Act, 1996.”The Court held that writ petition before the High Court for expeditious disposal of an arbitration was barred in lieu of the alternate remedy under Section 29A(4) to approach the Civil Court. Section 29A of the 1996 Act provides for timeline for passing arbitral award which is 12 months from the date of completion of pleadings. Sub-section (4) provides that if the arbitral proceedings have not been completed in accordance with sub-section (1) or have not been extended by the consent of the parties, then the mandate of the arbitrator shall end unless extension is granted by the Court.Section 2(1)(e)(i) of the Arbitration and Conciliation Act, 1996 defined Court as the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit. Petitioner was owner of various plots parts of which were acquired for road widening by the National Highway Authorities of India (NHAI). Since the compensation was low and arbitrary and the basis for arriving at such compensation was not informed to the petitioner, he filed a claim petition under Section 3G(5) of the NHAI Act, 1956 before the Arbitrator/District Magistrate, Gorakhpur. Since the case had not been decided for 2 years, the petitioner approached the High Court for expeditious decision on the claim petition. The question before the Court was whether such a writ petition for timebound disposal of arbitration under Section 3G(5) of the NHAI Act was maintainable and applicability of Section 29A to such proceedings. The Court held that by virtue of Section 3G(6) of the NHAI Act arbitration proceedings under Section 3G(5) of the NHAI Act are governed by the provisions of the Act of 1996, however, they were subject to the provisions of the NHAI Act. Perusing Section 29A and the definition of Court and referring to Chief Engineer (NH) PWD (Roads) vs. M/s BSC & C&C JV, it was held that “The legislative intent is clear and unambiguous. The Parliament, while enacting Section 29A of the Arbitration Act, 1996, has specifically designated the "Court" as defined in Section 2(1)(e)(i) as the competent authority to entertain applications for extension of the mandate of the arbitrator beyond the stipulated period. The definition of "Court" is exhaustive and does not include High Courts that do not exercise ordinary original civil jurisdiction. The High Court of Judicature at Allahabad admittedly does not exercise ordinary original civil jurisdiction. Therefore, this Court cannot take over or exercise the powers that the law has specifically given to the proper civil court.”Further, the Court held that since more than 12 months had passed and there was no consent amongst the parties to increase the mandate of the arbitrator, the same had already expired and arbitrator became functus officio. It was held that writ of mandamus could not be issued against such an arbitrator unless his mandate was restored by a 'Court' under Section 2(1)(e)(i) of the 1996 Act. The Court differentiated the judgment of the Allahabad High Court in Kotak Mahindra Bank Ltd. Vs. State of U.P. & 5 Others, where it had exercised writ jurisdiction to extend the mandate of the arbitrator on grounds that 18 months had not elapsed and the writ jurisdiction could be exercised. The bench headed by Justice Tripathi held that though the writ jurisdiction was exercised in the aforesaid case, it ought not to have been exercised ordinarily as legislature has designated a specific forum for entertaining applications for extension of mandate. “The existence of a specific statutory remedy under Section 29A(4) before the competent civil court bars the maintainability of writ petitions seeking mandamus for expeditious disposal of arbitration proceedings, especially when the statutory period has expired.”Accordingly, the Court held that the writ petitions were not maintainable before ...

Allahabad High Court Has No Ordinary Original Civil Jurisdiction, Cannot Extend Arbitrator's Mandate U/S 29A A&C Act

Upasna Agrawal

Tags