Allegations Against Arbitral Tribunal Without Any Basis Is Contrary To Letter And Spirit Of Arbitral Process: Delhi High Court

Brief Facts:

The matter pertained to an Engineering, Procurement, and Construction agreement (EPC) made between the NHAI and M/S Kcc Buildcon Pvt. Ltd. (“Respondent”). Dispute arose between parties and an Arbitral Tribunal was constituted on 23rd December 2021, with a six-month extension subsequently agreed upon by both parties. The delays ensued during the arbitral proceedings due to the Respondent's requests for amendments to the written statement and statement of claims in September 2022. Furthermore, the Respondent submitted an affidavit of evidence along with 6000 pages of additional documents on 31st March 2023, leading to extensive deliberations on its admissibility.

As the matter reached the stage of the Respondent's cross-examination, the Respondent opted to nominate a new arbitrator, stating concerns over the impartiality and independence of the previous Arbitral Tribunal. Additionally, the Respondent initiated a separate petition under Section 11 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”), seeking the appointment of a new arbitrator and a fresh constitution of the arbitral tribunal. Thereafter, the Petitioner approached the Delhi High Court (“High Court”) and filed an application under Section 29A of the Arbitration Act seeking an extension of the mandate of the arbitral tribunal.

Observations by the High Court:

The High Court held that allegations made by the Respondent against the Arbitral Tribunal lacked any substantial basis and were contrary to the principles governing the arbitral process. Specifically, the High Court held that such unfounded allegations not only go against the letter and spirit of arbitration but also contribute to unnecessary delays in the proceedings. Further, the High Court held that the delays in the presentation of evidence were primarily due to actions taken by the Respondent. Consequently, the High Court held that the allegations raised by the Respondent against the Arbitral Tribunal were baseless and lacked merit.

The High Court emphasized that the petition filed by the NHAI seeking an extension of the Arbitral Tribunal's mandate should not be exploited as a means to replace an arbitrator or tribunal by levying unjustified accusations against them. It held that such actions undermine the integrity of the arbitration process and contravene the purpose of seeking an extension.

Therefore, the High Court extended the mandate of the Arbitral Tribunal until 31st December 2024.

Case Title: National Highways Authority Of India Vs M/S Kcc Buildcon Pvt. Ltd.

Citation: 2024 LiveLaw (Del) 540

Case Number: O.M.P.(MISC.)(COMM.) 327/2024

Advocate for the Petitioner: Mr. Ankur Mittal, Mr. Abhay Gupta, Ms. Ikshita Parihar & Ms. Shalini Singhal, Advs.

Advocate for the Respondent: Mr. Naresh Markanda, Senior Advocate with Mr. Rohan Markanda, Advocate

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