Arbitration Lawyer: Arbitrator cannot continue arbitration beyond time frame, in absence of consent of both parties; SC.

Supreme Court of India

Justice Ajay Rastogi and Justice Mohan M. Shantanagoudar 

The SC { JAYESH H. PANDYA & ANR. v. SUBHTEX INDIA LTD. & ORS. } holds that the time fixed by agreement of the parties for the arbitration and/or schedule of time limit in such arbitration proceedings, as it is recognised by law, there   is   no   reason   not   to   accept   the   same. In   the present case, the parties have agreed for time limit of four months for conclusion of arbitration proceedings. After expiry of four months, the appellant (respondent before the arbitrator) moved the HC seeking termination of mandate of the arbitrator u/s 14 of the Act. The HC dismissed the same on the ground that the appellant had by participation in proceedings before the arbitrator waived the time limit.

The SC holds that where the parties themselves agreed to bind themselves by the time limit - that is to be adhered to in arbitration proceedings. It was held that Section 14 read with Section 15 of the Act, 1996 also recognise this mechanism and after the  expiry  of four months  period from the  date of  first preliminary meeting held on 4th May, 2007, the  Arbitrator in the present case indeed became de jure unable to perform his functions and the mandate to act as an Arbitrator in the arbitral proceedings between the parties as prayed for stood terminated. Therefore, the HC erred while dismissing the petition of the appellant for termination of mandate of the arbitrator. Accordingly, the mandate of the arbitrator was terminated by the SC.

It was held by the SC that 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.     That   apart,   the doctrine of “waiver”  or “deemed waiver”  or “estoppel” is always based on facts and circumstances of each case, conduct of the parties   in   each   case   and   as   per   the   agreement entered   into between the parties. And as such, it was held by the SC that there is no waiver in the present case by the appellant, and the HC had committed error while holding so.