TaxTMI 
TaxTMI 
2019 (8) TMI 1308
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....ion 11 of the Arbitration and Conciliation Act, 1996(hereinafter being referred to as the "Act 1996") for appointment of an Arbitrator in A.P. No. 150 of 2003 before the High Court of Judicature at Bombay despite resistance by the present appellants that the agreement dated 28th April, 2000 was a collusive and a forged document. Initially, by an Order dated 14th November, 2003, late Shri Justice V.D. Tulzapurkar, former Judge of this Court was appointed as a sole Arbitrator without prejudice to the rights and contentions of the parties and it was clarified that the views expressed in the order dated 14th November, 2003 about the existence, validity and effect of the arbitration agreement were prima facie and it would be open to be examined by the learned Arbitrator under Section 16 of the Act, 1996. The order passed by the Single Judge of the High Court dated 14th November, 2003 was a subject matter of challenge in a writ petition filed under Article 226 of the Constitution of India which was dismissed vide judgment and order dated 20th January, 2004 with an observation that adequate remedies are available under Section 16 of raising all contentious issues relating to the existence....
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....ishing the award from time to time, with the consent of both the parties. 7.The Arbitrator shall give reasons for his award. 8.The arbitrator will follow provisions of Arbitration & Reconciliation Act, 1996. The parties here to and the parties represented by party of the first part be bound by the award that will be given by arbitrator." 5. In terms of the conditions of the agreement dated 28th April, 2000, apart from the procedure to be followed by the Arbitrator, he was under an obligation to make his award within a period of four months from the date of service of copy of agreement with a proviso that the Arbitrator would have the power to extend the period for making and publishing the award, with the consent of both the parties. 6. Indisputedly, the first preliminary meeting before the Arbitrator was held on 4th May, 2007. As per clause 5 of the terms of the agreement dated 28th April, 2000, four months period which was available at the disposal of the Arbitrator for passing of an award in the ordinary course of his business subject to extension with the consent of both the parties was to expire on 4th September, 2007. The claimant was permitte....
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.... interim application was filed for extension of time or a clarification in this Court, as a result, jurisdiction to continue with the proceedings came to an end by passage of time on 4th September, 2007 and it was observed by the learned Arbitrator to continue with the arbitral proceedings and if the issue so urged by the parties is raised in writing, it could be decided at the appropriate stage. Accordingly, learned Arbitrator fixed a meeting on 26th October, 2007 in pursuance of the communication dated 3rd October, 2007. At this stage, the appellants filed a written application before the Arbitrator stating therein that the period of four months from the date of first preliminary meeting had expired on 4th September, 2007 and the Arbitral Tribunal has become functus officio with no power to proceed with the arbitral proceedings any more. But that came to be rejected by the learned Arbitrator vide Order dated 31st December, 2007 which came to be challenged by the appellants in Arbitration Petition( L) No. 59 of 2008 before the High Court of Judicature at Bombay invoking Section 14 of the Act, 1996 seeking a declaration that the Arbitrator has become de jure unable to perform his f....
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....ticipated in the arbitration proceedings which for all practical purposes could not be concluded within a period of four months and it reveals from the proceedings that delay in furnishing written statements/counter claims were attributable to the appellants and in the given circumstances, the very participation in the arbitration proceedings with their right to claim objection for extension of time for the Arbitrator to complete the arbitral proceedings in submitting an award stands waived by their implied consent and this has been noticed by the High Court in the impugned judgment and submits that if the objection which has been raised by the appellants is taken to its logical conclusion the very object and intent of the Parliament in enacting the law to facilitate an efficacious recourse to arbitration will be in jeopardy and the High Court has rightly observed that the Arbitrator is justified in coming to the conclusion that the appellants with their conduct waived their objection to enforce a punctilious observance of the time schedule of four months under the terms of the agreement for the Arbitrator to conclude the arbitral proceedings and it needs no interference by this Co....
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....s become de jure unable as an Arbitrator in this matter which came to be rejected by the learned Arbitrator vide Order dated 31st December, 2007. 14. From the records before us, it is established that the Arbitrator was unable to complete the arbitral proceedings within four months from the date of the first preliminary meeting held on 4th May, 2007 in terms of clause (5) of the arbitration agreement and objection to extend the time was recorded by the appellants before the Arbitrator. The Arbitrator having failed to do so rejected their application by an Order dated 31st December 2007 that came to be challenged by the appellant invoking Section 14 of the Act 1996 by filing an Arbitration Petition in the High Court of Bombay with a declaration that the Arbitrator has become je jure unable to perform his functions and the mandate to act as an Arbitrator in the arbitral proceedings between the parties stood terminated which came to be dismissed by the High Court under the impugned judgment dated 14th March, 2008. 15. It is necessary to mention Section 14 and 15 of the Act, 1996 for the sake of convenience which is as under:14 "14. Failure or impossibility to act-(1) Th....
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.... that parties were not in agreement for extension to the mandate of the Arbitrator failing which the arbitral proceedings automatically stood terminated. 17. Sub-section( 2) of Section 14 clearly stipulates that if a controversy remains concerning any of the grounds referred to in clause (a) of subsection (1), the party may, unless otherwise agreed by the parties, apply to the Court to decide on the termination of the mandate and the appellants rightly applied to the Court for termination of the mandate of the Arbitrator pursuant to the provisions of this Section and the Court was within its jurisdiction to decide accordingly. 18. It is true that the object of the scheme of the Act, 1996 is to secure expeditious resolution of disputes and it is based on the fulcrum of promptitude but at the same time the Arbitrator is required to adjudicate the disputes in view of the agreed terms of contract and the procedure. Therefore, the arbitration proceedings are supposed to be governed and run by the terms as agreed by the parties. The Arbitrator, therefore, cannot go beyond the clause of the arbitration agreement. We all need to respect the legislative intent underlying the Act. The ....
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....heir consent for extension of time which was the requirement and essence of the conditions of the agreement and the Arbitrator became de jure unable to perform his functions after the expiry of four months from the date of first preliminary meeting held on 4th May, 2007 but that was declined by the High Court on the premise that after the appellants have participated in the arbitral proceedings, that waived their right to question extension of time as it was inpracticable for the Arbitrator to conclude the proceedings within a period of four months and the High Court was of the view that the Act has been legislated with an object to facilitate an efficacious recourse to arbitration failing which it will be in grave peril. 20. The essential element of waiver is that there must be a voluntary and intentional relinquishment of a right. The voluntary choice is the essence of waiver. There should exist an opportunity for choice between the relinquishment and an enforcement of the right in question. It cannot be held that there has been a waiver of valuable rights where the circumstances show that what was done was involuntary. That apart, the doctrine of "waiver" or "deemed waiver" o....