The Aurangabad Bench of the Bombay High Court dismissed a Commercial Arbitration Appeal and upheld the refusal to set aside an arbitral award, observing that the objection to the appointment of the sole arbitrator is deemed waived under Section 4 of the Arbitration and Conciliation Act, 1996 (Act).
The case arose from an order passed by the Commercial Court, District Beed, under which the application filed by the Appellant under Section 34 of the Act, challenging the arbitral award dated February 11, 2018, was dismissed. The dispute was related to the road improvement and development work under the B.O.T. Scheme pursuant to a tender notice dated May 31, 2002. The work was completed on May 24, 2004, and permission to collect the toll was given from July 1, 2004, to June 30, 2016. The toll collection was stopped on July 17, 2014, as the respondent failed to carry out repairs to the road even after repeated complaints. Thereafter, the claim was settled by the appellant for an amount of Rs. 67.79 lakhs by way of buy-back price. Dissatisfied with the settlement, the respondent invoked arbitration.
Hearing the appeal, the bench of Justice Arun R. Pedneker and Justice Vaishali Patil Jadhav noted that the earlier order dated March 02, 2015, of the High Court merely recorded the appointment of the Sole Arbitrator and did not itself appoint the arbitrator. The court observed that the appellant had participated in the arbitral proceedings and raised objections regarding jurisdiction and appointment only at a later stage. Referring to Sections 12, 13, 16, and 4 of the Act, the court held that not raising a timely objection results in waiver.
Further, on the contention based on the fifth and seventh schedules read with section 12 of the Act, the court held that the 2015 amendment is prospective in nature and would not apply to arbitral proceedings that commenced prior to October 23, 2015, unless the parties otherwise agree.
Finding no ground to interfere with the commercial court’s order, the appeal was dismissed with costs. The request for a stay of the judgment was rejected.
Appearance:
Advocate M. K. Goyanka and Advocate P. K. Lakhotiya for the Appellant
Advocate J. N. Singh and Advocate Sunil L. Sange for the Respondent
