Hon'ble High Court held that by the Amendment of 2019 to Section 29A (1), the time period for making an Arbitral Award in international commercial arbitration been made inapplicable. The prescription of time limit by Amendment Act of 2015 had not conferred any rights or liabilities on a party rather it was a procedural law establishing a mechanism for the Arbitral Tribunal to render the award, which determine the rights and liabilities of parties in twelve months and surely the removal thereof also does not confer/affect rights of any party to be given effect prospectively.
The Court held that the arbitration clause, in the Concession Agreement between the petitioner and respondent (Clause 19.2(a)) specifically required issuance of a notice, by one party to the other, for appointment of an arbitrator. This procedure would, therefore, apply, equally, to the appointment of a substitute arbitrator, on the mandate of the arbitrator, of any one of the parties, standing terminated, on any of the grounds contemplated in Section 14 of the 1996 Act. Admittedly, no such notice was ever issued, by the petitioner, to the respondent, to appoint a substitute arbitrator, consequent on the demise of Mr. S.C. Sharma. In the absence of any such notice, the petitioner is not entitled to plead confinement of the right, of the respondent, to appoint a substitute arbitrator, to any specific period of time, least of all to a period of 30 days from the date when the respondent came to know of the demise of Mr. S.C. Sharma, and of the requirement of appointing a substitute arbitrator. It cannot, therefore, be said that the right of the respondent, to appoint a substitute arbitrator, stood extinguished, on the date when the petitioner filed the present petition, before this Court, under Section 11 (6) of the 1996 Act. In fact, there having been no failure, on the part of the petitioner, to appoint a substitute arbitrator, as per the procedure outlined in Clause 19.2 (a) of the Concession Agreement, Section 11 of the 1996 Act did not apply, at all. It cannot be held that, in appointing the substitute arbitrator on 8th June, 2020, the respondent is guilty of any unconscionable delay, especially given the straitened circumstances in which the country finds itself at present, consequent on the COVID-2019 pandemic and the restrictions imposed as a consequence thereof. Rather, the appointment, of the substitute arbitrator, on 8th June, 2020, must be held as having been effected, in the circumstances, with commendable promptitude. The appointment of the substitute arbitrator, by the respondent, on 8th June, 2020 has, therefore, to be regarded as eminently in accordance with the procedure contained in Clause 19.2 (a) of the Concession Agreement and, consequently, in keeping with Section 15 (2) of the 1996 Act, as well. No occasion, therefore, arises, for this Court, to step in, and appoint a substitute arbitrator in place of Mr. S.C. Sharma – invalidating, in the process, the appointment of Mr Manoj Kumar, by the respondent, on 8th June, 2020. There is, therefore, substance, in the contention of Ms. Kaul, that the present petition is premature – in which context one may also refer to para 30 of the report in NHAI, extracted hereinabove. The appointment of Mr Manoj Kumar as the substitute arbitrator of the respondent, on 8th June, 2020, it is reiterated, is perfectly in order, and is in accordance with Section 15 (2) of the 1996 Act.
Hon'ble High Court held that perusal of Section 39 (2) of the Act clearly contemplates that the application is maintainable when the Award is made, but not delivered to the parties as a party has not paid the fee demanded by the learned arbitrator. The said situation has not arisen in the case in hand and the same is clear from perusal of the proceedings dated February 7, 2019; February 8, 2019 in both the petitions respectively, as there is no indication that the proceedings have been reserved for Award. Even it is not the case of the petitioner or the learned Arbitrator that the Awards have been prepared/pronounced in both the cases and are ready for delivery. There is a purpose for delivery of the Award as the delivery of Award shall entitle a party to either challenge the Award or seek execution of the same. It is in such a situation a party can invoke the provision of Section 39(2) of the Act. As the aforesaid facts clearly demonstrate that since the position as contemplated in Section 39 has not arisen, the present petitions are not maintainable.
The Hon'ble Supreme Court held that the effect of the submission made by Mr. Mr. Panda is that a petition under Section 9 of the Act cannot be maintained against a foreign party having no assets in India. This submission of Mr. Mr. Panda is by relying upon the 246th report of the Law Commission and on the words ‘enforceable and recognized under the provision of Part-II’ in proviso to Section 2(2) of the Act. Insofar as the said words are concerned, the same are to mean a contracting State to the conventions, on the basis of reciprocity shall recognize and enforce the awards made in the territory of another contracting State. There is no dispute that an Arbitral award made in USA is enforceable in India under Part-II of the Act. Thus, it is clear that, passing of orders/granting interim-measures under Section 9 does not presuppose existence of asset(s) in India. The bank guarantee, which is furnished/amount deposited pursuant to an order passed by a Court in India under Section 9 (as stated at “C” above) can be invoked/withdrawn by an Indian party in the eventuality, it succeeds in a foreign seated arbitration in satisfaction of the Award, even though the foreign entity may not have any assets in India. That apart, this Court cannot refuse to entertain a petition under Section 9 of the Act on the ground, the foreign party does not have any assets in India, as in a given case it may so happen that the Indian party may not be successful in the arbitration proceedings for it to have an Award in its favour, so as to execute against a foreign party in India. Thus, it must be held that the present petition under Section 9 of the Act, for the reliefs claimed, is maintainable and the plea of Mr. Mr. Panda is rejected.
I. Case Reference Case Citation :  ibclaw.in 11 SC Case Name : M/S. Nangia Construction (I) Pvt. Ltd. Vs. National Buildings Construction Corporation Ltd Petitioner(s) : M/S. Nangia Construction (I) Pvt. Ltd. Respondent(s) : National Buildings Construction Corporation Ltd…
The Court held that the impugned award, thus, does not measure up to the minimal judicial scrutiny even within the parameters of Section 34 of the Act. It is completely unreasonable, impossible, and I dare say, perverse. It is partly based on no evidence, partly on non-application of mind, and partly, by a wholesale misapplication of law resulting into miscarriage of justice. All in all, it shocks the conscience of the court. It is submitted that after the 2015 amendment of the Act, as observed by the Supreme Court in Ssangyong Construction and Engineering Co.’s case, the ground of patent illegality is no longer available for challenging an award passed in an international commercial arbitration, such as the present award. Leaving aside the question of applicability of 2015 amendment to the present award which was both rendered and challenged under the unamended Act (i.e. the Act as it stood prior to the 2015 amendment), it is clear that the impugned award is being interfered with, as noted above, on the grounds that it is an impossible award; it is an award based on conclusions which no fair or judiciously minded person could have arrived at; and it shocks the conscience of the court. Each of these grounds bears on the fundamental policy of Indian law in making of an award.