SC:Arbitrator to conclude proceedings as per time limit, if any in agreement

The Hon’ble Supreme Court, on 27th August 2019, in the matter of Jayesh H. Pandya & Anr. v. Subhtex India Ltd. & Ors. observed that if the arbitration agreement contains a clause indicating that the parties have agreed to prescribe any time limit in which the arbitration proceedings should commence and end,then the time period so prescribed is final and binding on the parties as well as the arbitrator.

The Hon’ble Supreme Court observed that:

The arbitration proceedings are supposed to be governed and run by the terms as agreed by the parties. (Para 18)

The Arbitrator cannot go beyond the clauses of the arbitration agreement. (Para 18)

The speedy and alternative resolution to the dispute cannot be overlooked but at the same time, proceedings have to be governed and run by the terms agreed between the parties in concluding the arbitral proceedings failing which it will frustrate the mandate of the object of the Arbitration and Conciliation Act, 1996 with which it has been legislated by the Parliament to act upon on agreed terms and conditions of the agreement in concluding the arbitral proceedings. (Para 18)

The essential element of waiver is that there must be a voluntary and intentional relinquishment of a right. The voluntary choice is the essence of waiver. There should exist an opportunity for choice between the relinquishment and an enforcement of the right in question. It cannot be held that there has been a waiver of valuable rights where the circumstances show that what was done was involuntary. (Para 20)

The parties have to stand by the terms of contract including the Arbitrator. (Para 20)

If the arbitration agreement contains a clause indicating that the parties have agreed to prescribe any time limit in which the arbitration proceedings should commence and end,then the time period so prescribed is final and binding on the parties as well as the arbitrator. (This inference has been drawn on the basis of Para 21)

Copy of judgement: Judgement_27-Aug-2019

-Adv. Tushar Kaushik

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