DELHI HIGH COURT - 2019 AMENDMENT TO SECTION 29A OF ARBITRATION AND CONCILIATION ACT, 1996, IS PROCEDURAL IN NATURE AND APPLIES TO ALL PENDING ARBITRATIONS.
In the case of Harkirat Singh v. Oram Foods Pvt Ltd & Ors. [O.M.P. (MISC). (COMM.) 186 of 2021], parties entered into a lease deed dated 05.07.2016 by which the subject premises were leased out to the Respondent. A dispute arose when certain defaults were committed by the Respondent in payments of rental amounts, as a consequence of which the petitioner issued a termination notice, however a settlement agreement. Despite the settlement agreement, the Respondent continued to in default of payments, subsequent to which a second termination notice was issued qua which the Respondent was directed to hand back the possession of the subject premises. However, on the failure to do so, the subject premises were sealed by Municipal Corporation of Delhi.
The Petitioner invoked the arbitration clause on 14.12.2018 and requested DIAC to initiate arbitration. Both the parties filed their statements before the tribunal after an arbitrator was appointed. However, the arbitrator passed away, as a consequence of which a substitute arbitrator was appointed. The pleadings in the case were completed on 29.08.2019, however before an award could be passed the second arbitrator also passed away on 23.04.2021. Amidst this, with the amendment to section 29A of the Arbitration and Conciliation Act, 1996 (“Act”), the time limit of 12 months for rendering an award was to be calculated from the date of completion of proceedings. Also, the SupremeCourt excluded time from 15.03.2020 till 28.02.2022 from the purview of limitation. After the demise of the second arbitrator, DIAC appointed a third arbitrator who recused himself from continuing with the proceedings. Finally, a fourth arbitrator was appointed, and the petitioner approached the court on 21.12.2021, to extend the time for renderingan award. The award was passed on 30.09.2022, however, Respondent failed to pay the arbitration fees as a consequence of which the award was not delivered.
The Court examined the issue of application of the 2019 amendment to section 29A of the Act. The Court relied upon the judgements of its co-ordinate benches in the cases of ONGC Petro Additions Limited v. Ferns Constructions Co. Inc. (OMP(Misc.) (Comm) 256/2019) and Shapoorji Pallonji and Co. Pvt. Ltd. v. Jindal India Thermal Power Limited (OMP(Misc.) (Comm) 512/2019) to observe that the amendment is procedural in nature, therefore it was to apply retrospectively to all pending arbitration proceedings. With respect to the instant case, it was noted that the pleadings have been completed, and arbitration, with respect to 2019 amendment, was to deliver the award within 12 months from the date of completion of proceedings, however, owing to the covid 19 pandemic, the Supreme Court excluded time from 15.03.2020 till 28.02.2022 from the purview of limitation, therefore the period of limitation expired on 16.08.2022.
The marginal delay of 14 days in rendering an award which was delivered on 30.08.2022 was on account of certain exceptional circumstances in the form of the unfortunate death of two arbitrators and recusal of the third arbitrator. The Court allowed the petition and extended the period of limitation till the date on which the award was passed and directed the Respondents to pay the balance of arbitration fees.