Himachal Pradesh High Court Criticizes Arbitrator's Delay In Completing Arbitral Proceedings

Himachal Pradesh High Court Criticizes Arbitrator's Delay In Completing Arbitral Proceedings

Justice Bipin Chander Negi of the Himachal Pradesh High Court emphasized that the arbitrator bears the responsibility to fulfil their assigned tasks within the specified timeframes outlined in Section 29A of the Arbitration and Conciliation Act, 1996.

The court criticized an arbitrator appointed by the Central Government under the National Highways Act for displaying a negligent approach. It was observed that the arbitrator undertook the responsibility of adjudicating the arbitration proceedings despite being aware that failing to complete them within the stipulated timeframe would result in the termination of their mandate unless extended by a court of law.

The arbitral dispute arose from the acquisition of Kamla Devi's land in Bilaspur for the construction, widening, or four-laning, and subsequent maintenance, management, and operation of National Highway-21, conducted under the provisions of the National Highways Act of 1956.

The arbitrator issued notices on October 11, 2019, with a deadline for responses by December 31, 2021. Approximately five years ago, the petitioner filed a reference petition challenging the award. In an order dated December 26, 2022, the expiration of the arbitrator's mandate led to the suspension of proceedings. The petitioner then approached the High Court, seeking an extension of the arbitrator's mandate.

The High Court referred to Section 29-A and noted the mandatory timelines for completing pleadings and issuing awards. It was observed that these statutory requirements were disregarded by the arbitrator, who frequently adjourned proceedings.

Emphasizing the importance of statutory obligations under Section 29-A, which mandates that an award must be rendered by the arbitral tribunal within twelve months from the completion of pleadings, the High Court stressed the necessity for strict adherence to these timelines. It underscored that any delays must be substantiated with genuine and justifiable reasons.

The High Court expressed significant concern regarding the arbitrator's repeated adjournments.

The High Court held that:

“This Court fails to understand as to how the arbitrator can, with such a callous attitude, take upon the task of deciding the arbitration proceedings, knowing fully well that if the proceedings are not completed within the time schedule mentioned in the Act, then unless the same is extended by a Court of Law, the mandate of the arbitrator shall stand terminated.”

The High Court emphasized that any future neglect of duties by the arbitrator could result in the termination of the mandate under Section 29(A)(6) of the Arbitration Act, despite the arbitrator's appointment by the Central Government.

Acknowledging the rights of the petitioner, whose land was acquired and who is entitled to fair compensation, the High Court highlighted the potential undue prejudice if the arbitrator's failure to adhere to statutory deadlines led to the termination of proceedings. Therefore, the Court granted the petitions and instructed the arbitrator to conclude the arbitration proceedings by January 8, 2025.