When Termination Of Arbitral Proceedings For Non-Appearance Of Parties, Remain Unchallenged, Application Filed Again For Appointment Of Arbitrator Not Maintainable: Rajasthan High Court

The Single Bench of Justice Pankaj Bhandari held that the legal maxim 'Vigilantibus Non-Dormientibus Jura Subveniunt' which means that 'the law assists only those who are vigilant and not those who sleep over their rights' would squarely apply to a situation where the petitioner slept over its right to challenge the order of termination but filed a second application for appointment of arbitrator.

Facts

The petitioner had earlier filed an application for the appointment of the arbitrator which was allowed and the Court appointed a sole arbitrator.

None of the parties appeared before the arbitrator, consequently, the arbitrator terminated the arbitral proceedings under Section 32(2)(c) of the A&C Act.

Aggrieved, by the decision of the arbitrator, the petitioner filed a second application for the appointment of the arbitrator on the ground that no notice was served before the termination of the proceedings.

The Contention Of The Parties

The petitioner sought the appointment of arbitrator on the following grounds:

• No notice was served on the petitioner by the arbitrator before the termination of the arbitral proceedings.
• On termination of the mandate of an arbitrator a substitute arbitrator can be appointed under Section 11 of the A&C Act.
• The issue of limitation cannot be decided under Section 11 of the A&C Act.

The respondent objected to the maintainability of the application on the following grounds:

• Second arbitration application is not maintainable as the petitioner has the option of challenging the award.
• The disputes relate to the year 2009, therefore, are hopelessly barred by limitation.
• The present application is also barred by limitation as the order of termination was passed more than 4 years ago.

Analysis By The Court

The Court held that second arbitration application would be non-maintainable when the order of the arbitrator terminating arbitral proceedings under Section 32(2)(c) was not challenged under Section 14(2) of the A&C Act.

The Court also observed that the legal maxim 'Vigilantibus Non Dormientibus Jura Subveniunt' which means that 'the law assists only those who are vigilant and not those who sleep over their rights' would squarely apply to a situation where the petitioner slept over its right to challenge the order of termination but filed second application for appointment of arbitrator.

The Court observed that the correct recourse for the applicant was to challenge the order of termination under Section 14(2) of the A&C Act.

The Court further observed that the order was passed on 29.11.2016 and the present application was passed after a lapse of 3 years and 7 months, therefore, barred by limitation.

The Court also observed that the dictum of Uttarkhand Purv Sainik Kalyan Nigam Ltd. Versus Northern Coal Field Ltd.: (2020) 2 SCC 455 wherein the SC observed that issue of limitation should be decided by the arbitrator would not apply to a second arbitration application.

Accordingly, the Court dismissed the application.

Case Title: Vimlesh Bansal v. Ashok Kumar, S.B. Arbitration Application No. 51 of 2022

Date: 26.05.2022

Counsel for the Applicant: Mr. Jatin Agarwal

Counsel for the Respondent: Mr. Abhi Goyal

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