Kerala High CourtFlemingo Duty Free Shop Private Ltd vs Airports Authority Of India on 28 June, 2022Author:Sathish NinanBench:Sathish NinanC. R.\n\n                   IN THE HIGH COURT OF KERALA AT ERNAKULAM\n                                       PRESENT\n                   THE HONOURABLE MR. JUSTICE SATHISH NINAN\n            TUESDAY, THE 28TH DAY OF JUNE 2022 / 7TH ASHADHA, 1944\n                             ARB.P. NO. 1 OF 2021\n  AGAINST THE JUDGMENT DATED 16.03.2016 IN AR 41/2015 OF HIGH COURT OF\n                                       KERALA\n                                        -----\nPETITIONER:\n\n              FLEMINGO DUTY FREE SHOP PRIVATE LTD\n              D-73/1, TTC INDUSTRIAL AREA,\n              MIDC-TURBHE, NAVI MUMBAI-400075,\n              REPRESENTED BY ITS AUTHORIZED SIGNATORY MR.NIXON VARGHESE.\n\n              BY ADVS.\n              G.HARIKUMAR (GOPINATHAN NAIR)\n              AKHIL SURESH\n              JAYAPRAKASH P. SEN (SR.)\n\n\n\nRESPONDENT:\n\n              AIRPORTS AUTHORITY OF INDIA\n              CORPORATE HEADQUARTERS, RAJIV GANDHI BHAWAN, SAFDARJUNG\n              AIRPORT, NEW DELHI-110001,\n              REPRESENTED BY ITS AIRPORT DIRECTOR, CALICUT INTERNATIONAL\n              AIRPORT(P.O), KARIPUR,\n              MALAPPURAM-673647.\n\n              BY ADVS.\n              S.SUJIN\n              V.SANTHARAM\n\n\n\n\n     THIS     ARBITRATION   PETITION     HAVING   COME   UP   FOR   ADMISSION     ON\n28.06.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:\n                                                                    C. R.\n\n\n                     SATHISH NINAN, J.\n            = = = = = = = = = = = = = = = = = =\n             Arbitration Petition No.1 of 2021\n            = = = = = = = = = = = = = = = = = =\n           Dated this the 28th day of June, 2022\n\n                              O R D E RThe Arbitration Petition is filed seeking an order\n\nfor extension of period of arbitration on substitution\n\nof Arbitrator.2. The reliefs claimed in the Arbitration Petition\n\nreads thus:-"a) Declare that the mandate of the Arbitral Tribunal\n    presided by the Learned Sole Arbitrator A.K. Singhhal stands\n    terminated in the arbitration matter of Flemingo Duty freeShop Private Limited vs. Airports Authority of India.b) Appoint a Sole Arbitrator in place of Learned Sole\n    Arbitrator A.K. Singhal for continuation of the arbitration\n    matter of Flemingo Duty freeShop Private Limited v.\n    Airports Authority of India.c) Extend the time for completion of the arbitration\n    proceedings in the arbitration matter of Flemingo Duty freeShop Private Limited vs. Airports Authority of Indiaby a\n    period of six months from the date of appointment of the new\n    Sole Arbitrator.Arbitration Petition No.1/2021-: 2 :-d) Grant the cost of the Application to the petitioner;\n      ande) grant such other reliefs as may be deemed fit, just,\n      proper and necessary in the facts and circumstances of the\n      case."3. The petitioner is engaged in the business of\n\noperation of duty free shops at various airports in\n\nKerala. There arose disputes between the parties, which\n\nlead to conduct of arbitration proceedings as provided\n\nfor in the agreement between them. The sole Arbitrator\n\nwas appointed on 25.01.2016. The pleadings were complete\n\non 14.09.2017. The period for completion of arbitration\n\nas   provided     under    Section     29A    (1)    and   (3)    of   theArbitration      and    Conciliation        Act,    1996(hereinafter\n\nreferred to as "the Act") expired. Even after the expiry\n\nof the term, the proceedings continued but, is not\n\ncompleted. Now the petitioner alleges bias on the part\n Arbitration Petition No.1/2021-: 3 :-of the Arbitrator. The petitioner has approached this\n\nCourt seeking substitution of the Arbitrator and for\n\nextension of the period in terms ofSection 29A (6)and\n\n(4) respectively, of the Act. The respondent opposes the\n\nprayer.       The    allegation     of      bias       are   denied.    The\n\njurisdiction of this Court to entertain an application\n\nunderSection 29Ais also challenged.4. Heard the learned Senior Counsel Sri.J.P.Sen on\n\nbehalf of the petitioner and learned Senior Counsel\n\nSri.N.N.Sugunapalan, on behalf of the respondent.5. The respondent raised a preliminary objection\n\nregarding      the    jurisdiction          of   the     High   Court   to\n\nentertain a petition underSection 29 Aof the Act.\n\nUnderSection 29A, power is conferred on the "Court",\n\nandSection 2(e)defines "Court" as, principal Civil\n\nCourt    of    original    jurisdiction.         Therefore,     only    the\n Arbitration Petition No.1/2021-: 4 :-District Court has the jurisdiction, is the contention.\n\nSuch contention has already been negatived by a Division\n\nBench of this Court inLots Shipping Company Limited v. Cochin\n\nPort Trust[2020 (2) KLT 907]. The Division Bench held thus:-"11. Taking note of the principle enunciated herein\n          above and on the basis of the detailed analysis, we are\n          inclined to hold that the term "court" used in Section\n          29(4) has to be given an contextual and purposive\n          interpretation, which is to be in variance with the\n          meaning conferred to the said term under Section 2(1)(e)(i) of the Act. The term "court" contained inSection\n          29(4)has to be interpreted as the 'Supreme Court' in the\n          case of international commercial arbitrations and as the\n          'High Court' in the case of domestic arbitrations. Hence\n          it is held that, either of the party will be at liberty to file\n          an arbitration petition before the High Court underSection 29A(5)of the Act, seeking extension of time for\n          continuance of the arbitration proceedings in exercise of\n          the power conferred underSection 29A(4)of the Act, in\n          the case of any domestic arbitration. The reference is\n          answered accordingly."Arbitration Petition No.1/2021-: 5 :-Therefore, the challenge against jurisdiction is\n\nliable to be rejected and I do so.6. Whether allegation of bias could be a ground for\n\nsubstitution of Arbitrator underSection 29A(6), is the\n\nissue for determination.7. For challenging an Arbitrator on the ground of\n\nbias, there is a specific provision in the Act viz.Section 12.Sections 13,14and15of the Act provide\n\nfor     various      situations       enabling   substitution     of\n\nArbitrator:-        (i) UnderSection 13when the Arbitrator\n\nwithdraws when a challenge is raised on the ground of\n\nbias    or   lack    of   required     qualifications,   being   the\n\ngrounds stipulated underSection 12(3); (ii) On the\n\ngrounds of failure or impossibility to act as mentioned\n\ninSection 14 (1)(a)and the Arbitrator withdraws from\n\noffice or parties agree for termination of his mandate;(iii) UnderSection 15where under, for any reason other\n Arbitration Petition No.1/2021-: 6 :-than     that   provided     underSections     13and14,   the\n\nArbitrator withdraws from office, or the parties agree\n\nfor determination of the Arbitrator.8.Section 29Afixes a time limit for completion of\n\narbitration      proceedings     and       for   passing    the     award.\n\nExcept     in    the     case    of        international         commercial\n\narbitration, the award is to be passed within 12 months\n\nfrom the date of completion of pleadings. The said\n\nperiod could be extended for a further period of six\n\nmonths on agreement between the parties. In terms of\n\nsub-section (4) ofSection 29A, on failure to pass award\n\nwithin the period stipulated as above, the mandate of\n\nthe arbitrator shall terminate, unless extended by the\n\nCourt. The extension could either be prior to or after\n\nthe expiry of the period stipulated. Extension can be\n\ngranted by the Court on the application of any of\n\nparties, for sufficient cause. Sub-section 6ofSection\n\n29Aprovides that, while extending the period, Court can\n Arbitration Petition No.1/2021-: 7 :-order substitution of the Arbitrator.9.Section 29Ahas nine sub-sections. A reading of\n\nall the sub-sections ofSection 29Aindicate that, the\n\nSection     deals     with    the     time     mandate      for   arbitral\n\nproceedings. In a request for extension of time, the\n\nCourt looks into as to at whose instance the delay has\n\noccurred. Costs could be imposed on the party who was\n\nresponsible for the delay. If delay was on the part of\n\nthe Arbitrator, his fee could be reduced. Therefore, it\n\nis in the said context that the power of substitution of\n\nArbitrator is vested in the Court.10.    As     noticed      supra,       the   other    grounds     of\n\nchallenge        against   the   Arbitrator,        especially     on   the\n\nground      of    bias,    and    consequential       substitution      of\n\nArbitrator are dealt with under specific provisions of\n\nthe Act. When specific provisions are incorporated in\n\nthe Act for challenge against an Arbitrator and for\n\nsubstitution, allegation of bias cannot be raised as a\n Arbitration Petition No.1/2021-: 8 :-cause to seek substitution of Arbitrator under Section\n\n29-A.11. There is yet another circumstance to endorse\n\nsuch view. Sub-section (6) ofSection 29Aprovides that,\n\nwhen there is a substitution of Arbitrator under the\n\nSection, the Arbitral proceedings shall continue from\n\nthe stage already reached and on the basis of the\n\nevidence and materials already on record. It is further\n\nprovided that the substituted Arbitrator shall be deemed\n\nto have received the said evidence and materials on\n\nrecord. However, when Arbitrator is substituted under\n\nthe other situations noticed supra, in terms ofSection\n\n15(3), the previous hearings held by the Arbitrator may\n\nbe   repeated      at   the      discretion     of     the    substituted\n\nArbitrator, unless otherwise agreed to by the parties.\n\nThere    is   a   stark    difference        between    the    two.   This\n\nfortifies the view that the request for substitution of\n\nan Arbitrator alleging bias will not come within the\n Arbitration Petition No.1/2021-: 9 :-scope of substitution underSection 29A(6)of the Act.12. A similar view has been taken by the Delhi High\n\nCourt inNCC Ltd. v. Union of India[2018 SCC online Delhi 12699]\n\nwherein it was held thus:-"Section 29Aof the Act is intended to sensitize the parties as\n      also the Arbitral Tribunal to aim for culmination of the\n      arbitration proceedings expeditiously. It is with this\n      legislative intent,Section 29Awas introduced in the Act by\n      way of theArbitration and Conciliation (Amendment) Act,\n      2015. This provision is not intended for a party to seek\n      substitution of an Arbitrator only because the party has\n      apprehension    about      the    conduct   of   the   arbitration\n      proceedings by the said Arbitrator. The only ground for\n      removal of the Arbitrator underSection 29Aof the Act can be\n      the failure of the Arbitrator to proceed expeditiously in the\n      adjudication process."13. Therefore, the request of the petitioner for\n\nextension of period on substitution of the Arbitrator,\n\nis not liable to be considered.Arbitration Petition No.1/2021-: 10 :-14. During the course of the arguments, a query was\n\nput to the learned Senior Counsel for the petitioner as\n\nto whether, if the Court is not inclined to accept the\n\nprayer      for    substitution,       whether      the      petitioner    is\n\npursuing      the     prayer     for   extension        of    time.     After\n\nobtaining         instructions,     the       learned     Senior      Counsel\n\nsubmitted before the Court that, the petitioner is not\n\nseeking for extension of time without grant of the\n\nprayer for substitution of Arbitrator.15.    Having     found     that        the   petitioner     is     not\n\nentitled to seek for substitution alleging bias against\n\nthe Arbitrator in this proceedings, and in the light of\n\nthe stand adopted by the petitioner as noticed above,\n\nthe question of consideration of extension of time for\n\ncompletion of the arbitral proceedings underSection 29Adoes not arise.16. As noticed first above, the pleadings were\n\ncompleted on 14.09.2017. The one year period and the\n Arbitration Petition No.1/2021-: 11 :-extendable period of six months are over as early as on\n\n14.03.2019. There is no dispute between the parties\n\nthat, if time is not extended in terms ofSection\n\n29A(4), the mandate of the Arbitrator has terminated. It\n\nis declared accordingly.The Arbitration Petition is ordered as above.Sd/-SATHISH NINAN\n                                                      JUDGE\n\nkns/-//True Copy//\n                                                        P.S. to JudgeAPPENDIX OF ARB.P. 1/2021PETITIONER EXHIBITS\n\nExhibit P1       A TRUE COPY OF JUDGMENT DATED 16.03.2016 IN AR\n                 NO.41 OF 2015 PASSED BY THIS HON'BLE COURT\n\nExhibit P2       A TRUE COPY OF LETTER DATED 25.01.2016 ISSUED BY\n                 THE RESPONDENT ALONG WITH ITS ANNEXURE\n\nExhibit P3       A TRUE COPY OF TRANSCRIPTION OF THE CROSS-EXAMINATION DATED 10TH JUNE 2021\n\nExhibit P4       A TRUE COPY OF TRANSCRIPTION OF THE CROSS-EXAMINATION DATED 11TH JUNE, 2021\n\nExhibit P5       A TRUE COPY OF THE EMAILS CORRESPONDENCE DATED\n                 24TH FEBRUARY,2021 EXCHANGED BETWEEN THE ARBITRAL\n                 TRIBUNAL AND THE RESPONDENT TO THE EXCLUSION OF\n                 THE PETITIONER ALONG WITH TRAIL MAIL\n\nExhibit P6       A TRUE COPY OF LETTER DATED 6TH AUGUST,2020 SENT\n                 BY THE RESPONDENT TO THE ARBITRAL TRIBUNAL TO THE\n                 EXCLUSION OF THE PETITIONER\n\nExhibit P7       TRUE COPY OF ARBITRATION AND CONCILIATION\n                 AMENDMENT ACT,2015\n\nExhibit P8       TRUE COPY OF ARBITRATION AND CONCILIATION\n                 AMENDMENT AT 2019\n\nExhibit P9       A TRUE COPY OF ORDER DATED 6TH JANUARY 2017 OF\n                 THE ARBITRAL TRIBUNAL\n\nExhibit P10      A TRUE COPY OF ORDER DATED 2NE NOVEMBER 2017 OF\n                 THE ARBITRAL TRIBUNAL\n\nExhibit P11      A TRUE COPY OF ORDER DATED 18TH DECEMBER 2019. OF\n                 THE ARBITRAL TRIBUNAL\n\nExhibit P12      A TRUE COPY OF ORDER DATED 12TH FEBRUARY 2020. OF\n                 THE ARBITRAL TRIBUNALAPPENDIX-ARB.P. 1/2021-2-Exhibit P13        A TRUE COPY OF ORDER DATED 4TH MARCH 2021 OF THE\n                   ARBITRAL TRIBUNAL\n\nExhibit P14        A TRUE COPY OF ORDER DATED 4TH MARCH 2021.OF THE\n                   ABRITRAL TRIBUNAL-----