TaxTMI 
TaxTMI 
2025 (12) TMI 872
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....iod of four months. FACTS 3. The appellants who are husband and wife, along with respondent nos. 2 to 4 executed a partnership deed dated 18.05.1992 which contained an arbitration clause. M/s. Bharat Textiles namely, respondent no.1, was registered on 05.01.2007 as a partnership firm. Upon disputes having arisen, the High Court by a common order dated 13.03.2020, passed in two arbitration petitions filed by the appellants, appointed Mr. Anjum Javed, Advocate as a sole arbitrator. The High Court directed that a sole arbitrator shall be entitled to fee as per the Fourth Schedule to the Act. 4. The sole arbitrator entered the reference on 20.05.2020. He thereafter issued various directions on 03.06.2020, 21.10.2020, 09.01.2021 and on ....
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....hedule and administrative expenses only on actuals with disclosure to the parties. The substitution of the sole arbitrator was declined and time was extended to conclude the arbitral proceeding within a period of four months. The petitions were partly allowed. In the aforesaid factual background, these appeals arise for our consideration. SUBMISSIONS 7. Learned counsel for the appellant submitted that the sole arbitrator acted in contravention of the initial order of appointment dated 13.03.2020 and charged the fee and expenses in excess of Fourth Schedule. It is further submitted that the sole arbitrator also violated the directions issued in the order dated 28.01.2022 passed by the High Court. It is contended that the High Cou....
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....bunal within a period of twelve months from the date of completion of pleadings under subsection (4) of section 23. Explanation.-For the purpose of this sub-section, an arbitral tribunal shall be deemed to have entered upon the reference on the date on which the arbitrator or all the arbitrators, as the case may be, have received notice, in writing, of their appointment. Provided that the award in the matter of international commercial arbitration may be made as expeditiously as possible and endeavour may be made to dispose of the matter within a period of twelve months on the date of completion of pleadings under sub-section (4) of Section 23. (2) If the award is made within a period of six months from the ....
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.... (4), it shall be open to the Court to substitute one or all of the arbitrators and if one or all of the arbitrators are substituted, the arbitral proceedings shall continue from the stage already reached and on the basis of the evidence and material already on record, and the arbitrator(s) appointed under this section shall be deemed to have received the said evidence and material. (7) In the event of arbitrator(s) being appointed under this section, the arbitral tribunal thus reconstituted shall be deemed to be in continuation of the previously appointed arbitral tribunal. (8) It shall be open to the Court to impose actual or exemplary costs upon any of the parties under this section. (9) An application filed un....
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....ies to file the statements of claim and defence. The period of six months prescribed under Section 23(4) of the Act, for completion of pleadings expired on 19.11.2020. The period from 15.03.2020 till 28.02.2022 deserves to be excluded on account of pandemic caused by Covid-19 virus [COGNIZANCE FOR EXTENSION OF LIMITATION, IN RE (2022) 3 SCC 117]. In view of mandate contained in Section 29A(1) of the Act, the sole Arbitrator was under an obligation to pass an award within a period of one year from 01.03.2022, i.e. on or before 28.02.2023. However, the sole Arbitrator failed to do so. The parties did not apply for extension of period to pass an award. The sole arbitrator, in view of mandate contained in Section 29A(4) became functus officio. ....
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....2.2023. When mandate of arbitrator has expired, his continuation is impermissible. Section 29A(6) empowers and obligates the Court to substitute the Arbitrator. In so far as submission of the respondents, that, since the petition filed under Sections 14 and 15 of the Act was rejected on 24.01.2022 by the High Court is concerned, suffice it to say that the Act provides separate remedies in the circumstances mentioned in Sections 14, 15 and 29A of the Act. In any case, on 24.01.2022, the mandate of the sole arbitrator was not terminated. Therefore, the order dated 24.01.2022 does not have any impact on the decision of the petition under Section 29A of the Act filed by the appellants. The substitution of a sole arbitrator is warranted, when hi....