High Court Cites Abrogation of Article 370 and COVID-19 as Justifiable Reasons for Delays in Arbitration Process
In a significant development, the Jammu & Kashmir and Ladakh High Court has ruled in favor of extending the mandate of an arbitrator, amidst ongoing legal disputes between M/S Ali Mohammad Baba and the Government of Jammu and Kashmir. The case, revolving around a contract for street lighting on the National Highway Bypass from Athwajan to Parimpora, faced delays attributed to the abrogation of Article 370 and the COVID-19 pandemic.
The court, presided over by Justice Sanjay Dhar, addressed two petitions: one from M/S Ali Mohammad Baba seeking an extension for the arbitrator's mandate under Section 29-A of the Arbitration and Conciliation Act, and another from the Government challenging the arbitrator's order from July 26, 2024. The arbitrator, Engineer Khurshid Ahmad Budoo, had initially been appointed in October 2018, but procedural delays led to the expiration of his mandate.
Despite the termination of the arbitrator's mandate, the court found sufficient cause to extend the period for making the award, citing disruptions caused by the abrogation of Article 370 and the global pandemic. The High Court emphasized that such extensions are permissible under Section 29-A(5) of the Arbitration and Conciliation Act, provided there is substantial justification.
The decision also addressed the Government's concerns regarding the arbitrator's jurisdiction, particularly his decision on the maintainability of the contractor's claim petition after his mandate had expired. The court set aside this specific aspect of the arbitrator's order, directing a fresh evaluation of the objection without influence from prior opinions.
Furthermore, the court ruled against substituting the arbitrator at this final stage, noting that such a change would only exacerbate delays and financial burdens. Instead, the arbitrator's mandate was extended to allow for the completion of proceedings within two months.
The ruling underscores the judiciary's role in ensuring continuity and fairness in arbitration, especially in complex cases affected by extraordinary circumstances. As the parties prepare to resume proceedings, the arbitrator will reassess the maintainability issue and advance toward a resolution.
Bottom line:-
Arbitration - Court has jurisdiction to extend the time for making the arbitral award even after the mandate of the arbitrator has terminated, provided sufficient cause exists.
Statutory provision(s): Arbitration and Conciliation Act, 1996, Section 29-A
M/S Ali Mohammad Baba v. State of J&K, (J&K)(Srinagar) : Law Finder Doc id # 2948258
