In a recent development, the arbitration dispute between Extramarks Education India Pvt. Ltd. and Saraswati Shishu Mandir has taken a new turn. The appointment of a new arbitrator signals a progression in the case, bringing hope for resolution. Stay informed as the proceedings continue to unfold.
Facts
- The ld. Sole Arbitrator was appointed in the present petitions by the Petitioner-Extramarks Education India Private Limited.
- The time period till 28th February, 2022 was excluded from the proceedings based on the decision of the ld. Supreme Court in Suo Moto Writ Petition (C) No 3/2020.
- The disputes in the present petitions stem from agreements dated 20th May, 2013 and 4th February, 2014 for sale, installation, and services related to Smart Learn Classes.
- The Petitioner sent an email on 28th December, 2022 to the ld. Arbitrator to re-enter the reference.
- Notices invoking arbitration under Section 21 of the Act were sent by the Petitioner to Saraswati Shishu Mandir on various dates, eventually leading to legal actions due to non-responsiveness.
- Efforts to resume arbitration proceedings were made but faced obstacles.
- After the termination of agreements, outstanding dues were left unresolved, leading to repeated attempts by the Petitioner to recover the amounts.
- The ld. Arbitrator informed about the first procedural hearing to be conducted on 14th November, 2018.
Analysis
- Section 15 of the Act covers Termination of mandate and substitution of Arbitrator.
- The mandate of an Arbitrator terminates if they are unable to perform functions, withdraw from office, or if parties agree to termination.
- Provisions aim to ensure efficiency in arbitration process by replacing incapable arbitrators.
- These provisions do not apply when the mandate ends solely due to the expiry of the award-making period specified under Section 29A.
- Substitution of Arbitrator allows continuation of proceedings from where the original arbitrator left off.
- Section 14 of the Act applies in instances where an Arbitrator is unable to perform their duties
- It also applies if the Arbitrator fails to act without undue delay
- The section is triggered if the Arbitrator withdraws from office
- It is applicable when the parties agree to terminate the Arbitrator’s mandate
- In the case of termination of arbitral proceedings, the proceedings do not survive and no substitute Arbitrator can be appointed.
- However, in the case of termination of the mandate of the Arbitrator, the proceedings survive, allowing for the appointment of a substitute Arbitrator.
- The Arbitrator in this case was appointed on 26th October, 2018, and the Statement of Defence was filed on 26th September, 2019.
- Section 14 of the Arbitration and Conciliation Act, 1996 outlines circumstances of failure or impossibility of the Arbitrator to act.
- If the Arbitral Tribunal fails to issue an award within a fixed period determined by the parties, the mandate of the Arbitral Tribunal ends, but the arbitration proceedings continue.
- In such cases, a substitute Arbitrator, if appointed, carries on with the arbitration proceedings from where they were left by the previous Arbitrator.
- The termination of arbitral proceedings is distinguished from the termination of the mandate of the Arbitrator.
- The mandate of the Arbitrator can end based on the facts and circumstances of the case, but the arbitral proceedings may still continue.
Decision
- Arbitration proceedings initially began under the Delhi International Arbitration Centre (DIAC) but were discontinued due to the COVID-19 pandemic.
- Petitioner attempted to contact the arbitrator multiple times after the exclusion period but received no response.
- The current circumstances warrant the appointment of a substitute arbitrator as the original arbitrator is non-responsive.
- Stamping of the arbitration agreement was deemed unnecessary for invoking arbitration as per a recent Seven Judges’ Bench decision.
- The matter has been referred back to DIAC for continuation of arbitral proceedings.
- Ms. Zubeda Begum Advocate has been appointed as the new arbitrator with the Petitioner bearing the entire fee.
- The new arbitrator will proceed from where the previous arbitrator left off, and all contentions of the parties are left open.
- The case is listed before DIAC on 8th July, 2024, at 3:00 p.m. for further proceedings.
Case Title: EXTRAMARKS EDUCATION INDIA PVT. LTD. Vs. SARASWATI SHISHU MANDIR (2024:DHC:4084)
Case Number: OMT-14/2024
