Arbitration Act : Supreme Court Asks High Courts To Submit Particulars of All Pending Section 11(6) Applications

A Bench comprising Justices M.R. Shah and B.V. Nagarathna was hearing a plea assailing the order dated 30.06.20202 passed by the Telangana High Court, which had decided to dismiss an application filed under Section 11(6) of the Arbitration Act for appointment of Arbitrator after 4 years.

On a previous occasion, the Bench had expressed concern that it took 4 years for the High Court to dispose of an application seeking appointment of Arbitrator, which is in the teeth of the purpose and object of arbitration. In view of the same, the Bench directed the Registrar General of the High Court to submit a statement pertaining to all the Section 11(6) applications pending before the Court. On perusal of the same, on Thursday, the Bench was perturbed to note that several applications were pending for more than a year. It was anxious that some of the applications filed in the year 2006 are pending till date. In many cases the applications are pending 'for order' or 'for judgment' or 'for disposal'.

The Bench was of the view that the inordinate delay frustrates the very purpose of the Arbitration Act. It noted -

"If the applications under Section 11(6) of the Arbitration Act, 1996 are kept pending for a long period and even the appointment of arbitrators are not made at the earliest, it will defeat the object and purpose of the Arbitration Act. Even as per the proposed amendment in the year 2019, of course, it has not come into force."

It directed -

"All endeavors shall be made by the courts to decide and dispose of the applications for appointment of arbitrator within a period of six months."

Referring to the Commercial Courts Act, the Bench observed that commercial disputes are required to be decided within a period of year. Similarly, the Arbitration & Conciliation (Amendment Act), 2015 envisages the arbitral proceedings to be decided within a year's time.

The Bench added -

"Therefore, if the applications under Section 11(6) of the Arbitration Act are not decided at the earliest and within reasonable time, more particularly within one year from the date of filing, the object and purpose of the Arbitration Act shall be frustrated."

In view of the same the Bench opined that the situation might be the same across the country and therefore sought report regarding the pendency of Section 11(6) applications from all the High Courts.

Case Title: M/s Shree Vishnu Constructions v. The Engineer in Chief Military Engineering Service Service And Ors. SLP (C) No. 5306 of 2022

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