Arbitration and Conciliation Act, 1996 – Clause (c) of subsection (2) of section 32 – When can the power under clause
(c) of sub-section (2) of section 32 of the Arbitration and Conciliation Act, 1996 be exercised:
Held: The power under clause (c) of sub-section (2) of Section 32 of the Arbitration Act can be exercised only if, for some reason, the continuation of proceedings has become unnecessary or impossible – Unless the Arbitral Tribunal records its satisfaction based on the material on record that proceedings have become unnecessary or impossible, the power under clause (c) of subsection (2) of Section 32 cannot be exercised – If the said power is exercised casually, it will defeat the very object of enacting the Arbitration Act. [Para 21(a)]
Arbitration and Conciliation Act, 1996 – Is it the Arbitral Tribunal’s duty to fix a meeting for hearing:
Held: It is the Arbitral Tribunal’s duty to fix a meeting for hearing even if parties to the proceedings do not make such a request – It is the duty of the Arbitral Tribunal to adjudicate upon the dispute referred to it – If, on a date fixed for a meeting/hearing, the parties remain absent without any reasonable cause, the Arbitral Tribunal can always take recourse to the relevant provisions of the Arbitration Act, such as Section 25. [Para 21(b)]
Arbitration and Conciliation Act, 1996 – Whether the failure of the claimant to request the Arbitral Tribunal to fix a date for hearing, per se, is the ground to conclude that the proceedings have become unnecessary:
Held: The failure of the claimant to request the Arbitral Tribunal to fix a date for hearing, per se, is no ground to conclude that the proceedings have become unnecessary. [Para 21(c)] Arbitration and Conciliation Act, 1996 – Clause (c) of subsection (2) of section 32 – Whether abandonment of claim by a claimant can be a ground to invoke clause (c) of sub-section
(2) of section 32:
Held: The abandonment of the claim by a claimant can be a ground to invoke clause (c) of sub-section (2) of Section 32 – The abandonment of the claim can be either express or implied – The abandonment cannot be readily inferred – There is an implied abandonment when admitted or proved facts are so clinching that the only inference which can be drawn is of the abandonment – Only if the established conduct of a claimant is such that it leads only to one conclusion that the claimant has given up his/her claim can an inference of abandonment be drawn – Even if it is to be implied, there must be convincing circumstances on record which lead to an inevitable inference about the abandonment – Only because a claimant, after filing his statement of claim, does not move the Arbitral Tribunal to fix a date for the hearing, the failure of the claimant, per se, will not amount to the abandonment of the claim. [Para 21 (d)]
Arbitration and Conciliation Act, 1996 – Clause (c) of subsection (2) of section 32 – A part of first appellant’s (D) property was permitted to be developed by S under Development agreement – A MOU was also executed between the first appellant and M, by which first appellant agreed to sell another portion of property to M – Dispute arose – A consensus was reached between all the three parties to appoint a Arbitrator – Arbitral Tribunal had to deal with claims filed by both S and M – M’s claim culminated in an award on 06.05.2017 – However, arbitral proceedings based on claim filed by S did not proceed – First Appellant filed an application invoking the Arbitral Tribunal power under Clause (c) of sub-section
(2) of section 32 of the Arbitration Act contending that S had abandoned arbitral proceedings – Following, the Arbitral Tribunal terminated arbitral proceedings – However, the Single Judge of the High Court directed the tribunal to continue with the proceedings – Propriety:
Held: The question is whether S abandoned its claim filed before the Arbitrator – S had regularly attended meetings held to hear M’s claim – During the period during which the claim of M was heard, at no stage, the Arbitrator suggested that the claim of S could be heard simultaneously – On the contrary, from the conduct of the parties and the Arbitrator, an inference can be drawn that M’s claim was given priority – In any case, there is no express abandonment – Even if it is to be implied, there must be convincing circumstances on record which lead to an inevitable inference about the abandonment – In the facts of the case, there was no abandonment either express or implied – In a case where the claim is abandoned, the Arbitrator can take the view that it would be unnecessary to continue the proceedings based on the already abandoned claim – In this case, the inference of the abandonment has been drawn by the Arbitrator only on the grounds that S did not challenge the M award and took no steps to convene the meeting of the Arbitral Tribunal – The failure to challenge the award on M’s claim will not amount to abandonment of the claim filed by S – In the claim submitted by S, a prayer was made in the alternative for passing an award in terms of money against the first appellant – Therefore, there was absolutely no material on record to conclude that S had abandoned its claim or, at least, the claim against the first appellant. [Para 20]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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