M/S. Chandok Machineries v. M/S. S. N. Sunderson & Co

NAVIN CHAWLA, J AUGUST 28, 2018 RN/sd

O.M.P. (COMM.) 321/2017 Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI + O.M.P. (COMM.) 321/2017 Reserved on: 28th May, 2018 Date of decision : 28th August, 2018 M/S. CHANDOK MACHINERIES ..... Petitioner Through: Mr.Sudhir Nandrajog, Sr. Adv. with Mr.Avi Singh, Mr.Shashank Dixit, Mr.Katyayini & Ms.Purnima Malik, Advs. versus M/S. S. N. SUNDERSON & CO ..... Respondent Through: Mr.Jayant K. Mehta, Mr.Pulkit Agarwal & Mr.Shubhankar, Advs. CORAM: HON'BLE MR. JUSTICE NAVIN CHAWLA 1. This petition under Section 34 of the Arbitration and Conciliation Act, 1996, (hereinafter referred to as the "Act") has been filed by the petitioner challenging the Arbitral Award dated 12th June, 2017 passed by the Arbitral Tribunal consisting of three Arbitrators in Arbitration Case No.20017/ANL adjudicating the disputes that have arisen between the parties in relation to the two Memorandum of Understanding(s) dated 1st September, 2014. 2. By way of the Impugned Award, the Arbitral Tribunal has inter alia directed the petitioner to pay to the respondent a sum of O.M.P. (COMM.) 321/2017 Page 2 Rs.2,27,36,444.88, subject to the petitioner raising an appropriate invoice for the amount of Rs.1,32,99,020.11. The Arbitral Tribunal has further directed the petitioner to pay interest @ 9% per annum from the last date of dispatch. 3. The learned senior counsel for the petitioner contends that in terms of Section 29A of the Act, the mandate of the Arbitral Tribunal had terminated on 13th June, 2017. He submits that the Impugned Award, though has a typed date of 12th June, 2017, was passed only on 28th June, 2017, which is the date mentioned under the signatures of one of the Arbitrators and, therefore, the Impugned Award has been passed after the mandate of the Arbitral Tribunal had terminated and the same cannot be given effect to. 4. It is further contended that it is only after the signing of the Impugned Award by the Arbitral Tribunal on 28th June, 2017, that a copy of the same was dispatched to the parties by the Arbitral Tribunal on 7th July, 2017. It is submitted that in view of Section 31(5) of the Act, as supplying a signed copy of the Arbitral Award is mandatory, the date of the Award has to be considered as 7th July, 2017, which is after the mandate of the Arbitral Tribunal had expired. 5. On the other hand, the counsel for the respondent submits that the Arbitral Award was signed by two out of the three Arbitrators on 12th June, 2017 and therefore, was a valid and enforceable Award under Section 29(1) of the Act. He further submits that in a subsequent order dated 5th August, 2017 passed by the Arbitral Tribunal, while disposing of an application filed by the respondent under Section 33(1)(a) of the O.M.P. (COMM.) 321/2017 Page 3 Act, the Arbitral Tribunal has given reasons for non-signing of the Arbitral Award by the third Arbitrator on 12th June, 2017, thereby complying with Section 31(2) of the Act. He further submits that failure to give reasons for the omission of the signatures of the third Arbitrator in the Award dated 12th June, 2017, being a default in the "form" of the Arbitral Award, cannot be construed as fatal. He further submits that in any case, as even the third Arbitrator has signed the Award, though belatedly, this Court, in exercise of its powers under Section 29A(4) of the Act can extend the time for making of the Award. In answer to the submission on Section 31(5) of the Act, he submits that the Arbitral Award comes into force on the date it is made, though for the purpose of Section 34 read with Section 36 of the Act, the time for filing of the objections against the Award and its enforceability would be counted from the date a signed copy has been received by the party to the arbitration proceedings. 6. I have considered the submissions made by the counsels for the parties. To answer the same, one would have to consider certain provisions of the Act. Section 29(1) of the Act provides that in arbitral proceedings with more t