Saturday, April 13, 2024

Supreme Court asks Parliament to consider amending Arbitration Act on appointment of arbitrators

The Supreme Court, while noting that there was no statutory prescription regarding the time limit for filing applications to appoint arbitrators, asked the Parliament to consider amending the Arbitration and Conciliation Act, 1996.

The Bench of Chief Justice of India (CJI) DY Chandrachud, Justice JB Pardiwala and Justice Manoj Misra on Friday said that three years was an unduly long period for filing an application under Section 11 of the Act, which went against its very spirit, providing for expeditious resolution of commercial disputes within a time-bound manner.

The Apex Court made these observations, while disposing of a petition filed by a Kabul-based firm under Section 11(6) of the Arbitration and Conciliation Act, 1996.

Petitoner Arif Azim Co is engaged in the business of providing training to students in computer education and English.

It sought the appointment of an arbitrator for the adjudication of disputes and claims arising from a 2013 contract with an Indian company, namely Aptech Limited.

In 2022, the firm from Aghanistan had agreed to mediation In the earlier round of litigation before the Bombay High Court.

It sought dues of Rs 1,48,31,067, including Rs 82,13,367 interest and nominated Senior Advocates V Giri and ML Verma as arbitrators.

However, the Indian company denied all contentions and refused to participate in proceedings on grounds of limitation, leading to the instant case before the apex court.

The Supreme Court eventually held that the case was filed within three years of the respondent having failed to comply with the first notice of invocation of arbitration and hence, it was not hit by limitation.

Advocate R Sathish appeared for Arif Azim Co.

Senior Advocate Rana Mukherjee appeared for Aptech Ltd.


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