Arbitrator Under The National Highways Act Has To Give An Award Within 1 Year, Failure Can Result In Termination Of The Mandate: HP High Court

The bench of Justice Sushil Kukreja held that in terms of Section 29(A) of the A&C Act, the arbitrator is mandated to deliver an award within 1 year from the date of entering reference and non-compliance with this provision will result in the termination of the mandate of the arbitrator. The Court held that the same provision also applies to a statutory arbitration governed by the A&C Act, thus, the mandate of the arbitrator under National Highways Act will stand terminated if the award is not delivered within the stipulated time-period.

Facts

The lands of the petitioners were acquired by NHAI for construction of a national highway under the provisions of the National Highways Act, 1956. Feeling aggrieved by the amount of compensation, the petitioners preferred reference to arbitration for enhancement of the amount of compensation under Section 3G of the said Act.

Accordingly, the parties were referred to arbitration before the statutory arbitrator exercising powers of an arbitrator under Section 3 of the National Highways Act i.e., Divisional Commissioner, District Mandi.

The pleadings in the arbitral proceedings were completed, however, the arbitrator failed to pass an award within the stipulated time as provided under Section 29A of the A&C Act. Accordingly, the parties approached the Court for the extension of the time to allow the arbitrator to pass an award.

Court’s Decision

The Court held that arbitration proceedings under the National Highways Act, 1956 are governed by the Arbitration and Conciliation Act, 1996, thus, the arbitrator so appointed by the Central Government under Section 3G(a) of the National Highways Act is bound to follow the provisions of the A&C Act.

The Court held that in terms of Section 29(A) of the A&C Act, the arbitrator is mandated to deliver an award within 1 year from the date of entering reference and non-compliance with this provision will result in the termination of the mandate of the arbitrator. The Court held that the same provision also applies to a statutory arbitration governed by the A&C Act, thus, the mandate of the arbitrator under National Highways Act will stand terminated if the award is not delivered within the stipulated time-period.

Keeping in mind the stage of arbitration proceedings, the Court restrained itself from terminating the mandate of the arbitrator and directed it to conclude the arbitration proceedings within 6 months from the date of the order.

Case Title: Ganga Ram v. Special Land Acquisition Officer, Arb Case No. 36 of 2023

Citation: 2023 LiveLaw (HP) 21

Date: 22.03.2023

Counsel for the Petitioners: Mr. Vikas Rathore, Advocate.

Counsel for the Respondent(s): Mr. B.N. Sharma, Addl. AG, Mr. R.P. Singh and Ms. Avni Kochhar, Dy. AGs, for respondent No. 1/State and Mr. K.D. Shreedhar, Senior Advocate and Ms. Shreya Chauhan, Advocate for NHAI.

Click Here To Read/Download Order