2014 (3) TMI 1247 - SC - Indian Laws

Termination of arbitral proceedings as 'continuation impossible' u/s 32(2)(c) - tribunal mandate ceases; appeal dismissed

Whether the order terminating arbitral proceedings fell within Section 32(2)(c) of the Arbitration and Conciliation Act, 1996: the SC held the termination ... Seeking substitution of the legal representatives of the deceased appellant and the other for the condonation of delay in filing the SLP - Section 11 of the Arbitration and Conciliation Act, 1996 - HELD THAT:- On the facts of the present case, the applicability of subclauses (a) and (b) of Section 32(2) is clearly ruled out and it is opined that the order dated 29th October, 2007 by which the Tribunal terminated the arbitral proceedings could only fall within the scope of Section 32, sub-Section (2), subclause (c) i.e. the continuation of the proceedings has become impossible. By virtue of Section 32(3), on the termination of the arbitral proceedings, the mandate of the arbitral tribunal also comes to an end. Having regard to the scheme of the Act and more particularly on a cumulative reading of Section 32 and Section 14, the question whether the mandate of the arbitrator stood legally terminated or not can be examined by the court “as provided under Section 14(2)”. The apprehension of the appellant that they would be left remediless is without basis in law - The appellants are at liberty to approach the appropriate court for the determination of the legality of the termination of the mandate of the arbitral tribunal which in turn is based upon an order dated 29th October, 2007 by which the arbitral proceedings were terminated. The appeal is dismissed. Issues: Whether an application under Section 11 of the Arbitration and Conciliation Act, 1996 was maintainable seeking appointment of an arbitrator after the arbitral tribunal had issued an order terminating the arbitral proceedings; and whether the appellants were left remediless by dismissal of their Section 11 application.Analysis: The scheme of the Arbitration and Conciliation Act, 1996 distinguishes between termination of the mandate of an arbitrator (Section 14) and termination of arbitral proceedings (Section 32). Section 32(2)(c) permits the arbitral tribunal to order termination where continuation has become impossible, and Section 32(3) links termination of proceedings to termination of mandate. Section 14(2) provides that controversies concerning termination of mandate on specified grounds may be referred to a Court defined under Section 2(1)(e). The Act contemplates limited judicial remedies and does not permit routine correction of arbitral orders by High Courts under constitutional writ jurisdiction in place of the remedial scheme provided by the Act.Conclusion: Application under Section 11 was not the appropriate remedy to challenge the tribunal's order terminating proceedings; appellants are not left remediless and may approach the appropriate Court under Section 14(2) for determination of legality of termination. The appeal is dismissed. In favour of Respondent.Ratio Decidendi: Where an arbitral tribunal has terminated proceedings under Section 32(2)(c), questions as to termination of the arbitrator's mandate fall within the Act's remedial scheme and, if controversy arises under Section 14(1)(a), may be decided by the Court as defined in Section 2(1)(e); Section 11 is not the proper mode to challenge a tribunal's termination order and High Courts should not invoke writ jurisdiction to correct such arbitral orders in place of the statutory scheme.