Section 34 Of The A&C Act Application Pending For 13 Years, MP HC Directs District Courts To Decide All Petitions Within 1 Year
The Madhya Pradesh High Court has expressed strong displeasure for keeping a petition under Section 34 of A&C Act pending for 13 years .The bench of Justice Subodh Abhaynkar remarked that delay in deciding arbitration applications mocks at and frustrates the very object for which the Act was promulgated. The Court directed the all the district Court to decide all the petitions...
The Madhya Pradesh High Court has expressed strong displeasure for keeping a petition under Section 34 of A&C Act pending for 13 years .The bench of Justice Subodh Abhaynkar remarked that delay in deciding arbitration applications mocks at and frustrates the very object for which the Act was promulgated. The Court directed the all the district Court to decide all the petitions under Section 34 of the Act as expeditiously as possible in accordance with Section 34(6) that provides for a maximum of one year period to dispose of the application.
The Court also reiterated that a party cannot challenge the appointment of the arbitrator or an award taking aid of Section 12(5) of the Act if the appointment was made prior to the 2015 Amendment vide which Section 12(5) was inserted.
Facts
The parties entered into an agreement dated 10.08.2001 whereby the appellant was to carry out certain construction works for the Respondent. A dispute arose between the parties related to payments which was referred to the arbitrator for resolution. The arbitrator partly allowed the claims of the appellant.
Aggrieved by the award, the appellant challenged it under Section 34 of the A&C Act. The lower court rejected the challenge petition filed by the appellant, however, the Court took 13 long years to decide the petition. Aggrieved thereby, the appellant filed the present appeal under Section 37 of the A&C Act.
Grounds of Challenge
The appellant challenged the award only on the following ground:
- The arbitrator was unilaterally appointed by the respondent, therefore, his appointment is void ab initio and the award is non-est in law.
Analysis by the Court
The Court observed that the arbitrator was appointed in the year 2007 and the impugned award was passed in the year 2009. It held that Section 12(5) of the A&C Act on the basis of which the award is challenged was inserted into the Act vide the 2015 Amendment to the Act and Section 26 of the 2015 Amendment Act provides that the Act is to have a prospective application only, therefore, the appellant cannot rely on Section 12(5) to challenge the award as the same provision was not present in the act at the time of the appointment of the arbitrator, thus, the appointment was valid and the consequent award is also valid in law.
However, the Court observed that the challenge petition was filed in the year 2009 and the impugned order by the lower Court has been passed only in the year 2022. The Court observed that there was a delay of around 13 years in deciding the application under Section 34 of the Act and the same was attributable to the Presiding Officer of the Lower Court.
The Court expressed serious displeasure over such long pendency of arbitration matters. The Court remarked that delay in deciding arbitration applications mocks at and frustrates the very object for which the Act was promulgated.
The Court directed the all the district Court to decide all the petitions under Section 34 of the Act as expeditiously as possible in accordance with Section 34(6) that provides for a maximum of one year period to dispose of the application.
The Court rejected the application with the above directions.
Case Title: Dharamdas Tirthdas Constructions Pvt. Ltd. v. Union of India, Arbitration Appeal No. 33 of 2022
Case citation: 2022 LiveLaw (MP) 244
Counsel for the Appellant: Mr. Vijay Asudani Advocate
Counsel for the Respondent: Mr. Himanshu Joshi Advocate