M/s SS Steel Fabricators and Contractors v. Narsing Décor: Judiciary Empowered to Prolong Arbitral Tribunal Mandate Beyond Expiry

Petitioner: M/s SS Steel Fabricators and Contractors

Respondent: Narsing Decor

Court: Delhi High Court

Date of Judgement: 19.06.2024

Coram: Justice Manoj Jain

Citation: 2024 SCC OnLine Del 4416

Facts:

• The original claim was filed before the learned tribunal by the petitioners which was terminated by 10.05.2023. Subsequently, Narsing Décor filed a counter-claim which was proceeded ex-parte in the absence of M/s steel fabricators.
• The proceedings were completed by 15.03.2023.
• Narsing Décor contended that this process was more burdensome on them than the Petitioner since they had to bear the fees solely, which would typically be incurred by the Claimant. For this reason, the counter-claimant sought extension of the period.
• The court emphasized the diligent conduct of Narsing Décor throughout the process and stated that they are not unreasonably causing delay, it is borne in a bona-fide manner.

Issues

1. Whether the court is empowered to extend the mandate of the Arbitral Tribunal after the specified period has expired u/s 29A ?
2. Whether there has been any deliberate attempt by Narsing Decor to delay the arbitration proceedings?
3. Whether the counter-claimant has been unfairly burdened with costs that should have been shared by the claimant?

Judgement:

• Taking note of the fact that the award was likely to be pronounced on 20^th June, 2024, the court granted extension to the counter-claimant. There was no evidence indicating a deliberate attempt to delay the proceedings, rather the delay occurred due to non-cooperation by the claimant.
• Several notices were sent to the claimant but they failed to appear and the proceedings by the counter claimant had to be conducted ex-parte.
• The court opined that the proceedings should have been completed within the stipulated period of 12 months from the counter-claim. However, the court relied M/s Power Mech Projects Ltd. v. M/s Doosan Power Systems India Pvt. Ltd., and observed that the arbitration proceedings had progressed significantly, with witness examinations completed and final arguments advanced, and the award was expected soon.
• Finally, the High Court held that pursuant to Section 29A (4) of the Arbitration Act, it has the discretion to extend the Arbitral Tribunal’s mandate, whether before or after the specified period has elapsed.
• Considering the above factors along with the precedent set by Power Mech Projects Ltd v. Doosan Power Systems India Pvt Ltd., the Court extended the mandate of the Arbitral Tribunal until 30.06.2024.

Conclusion:

The judgment underscores the evolving interpretation of Section 29A of the Arbitration and Conciliation Act, 1996. It provides insight on the usage of discretionary power, which in this matter was excessed, looking at the bona-fide nature of the counter-claimant.

This decision ultimately promotes a more flexible and just arbitration process, ensuring that genuine claims are heard and resolved appropriately. It seeks to ensure justice by establishing that tribunal’s proceedings must be equitable, even in the face of practical challenges which delay of proceedings poses.