BHARAT OMAN REFINERIES LTD Vs. MANTECH CONSULTANTS A PROPRIETARY FIRM THROUGH ITS PROPRIETOR  VITHALBHAI PATEL

JUDGEMENT

(1.) This appeal is directed against the order dated 2 nd September, 2011 passed by the learned single Judge in Arbitration Petition No. 477 of 2006. By the aforesaid order, the learned single Judge allowed the petition filed by the respondent herein under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act") and the Award dated 17 th August, 2006 passed by the sole Arbitrator is set aside on the ground that the same was not made within the stipulated time allowed by the arbitration agreement.

(2.) The appellant, Bharat Oman Refineries Ltd., and the respondent M/s. Mantech Consultants, entered into an agreement on 30 th December, 1996 by which the respondent was to carry out certain work in respect of inter state pipeline project. The agreement contained an arbitration clause. According to the appellant, since the respondent had not carried out the work as per the agreement, the parties agreed to close the contract. Subsequently certain disputes arose between the parties to the agreement and respondent herein invoked the arbitration clause. The respondent thereafter preferred an application under Section 11 of the Act, being Arbitration Application No. 74 of 2000, for appointment of an Arbitrator. By an order of this Court dated 23 rd February, 2001 the said application was disposed of by appointing one S.K. Saini, who is an employee of the appellant, as an Arbitrator to hear and decide the disputes and differences and the claims between the parties. The arbitrator thereafter commenced the proceedings. The arbitrator convened the first meeting on 14 th June, 2001 and fixed the schedule of dates for pleadings, etc. On 9 th July, 2002, arguments commenced before the arbitrator. The arguments were concluded on 21 st April, 2004. The Arbitrator thereafter declared his award in writing and the same was published on 17 th August, 2006. Subsequently, the respondent herein made an application under Section 33 of the Act seeking interpretation of large contents of the said award. The Arbitrator rejected the said application on the ground that the same was not justified.

(3.) The respondent thereafter preferred an Arbitration Petition before this Court under Section 34 of the Act for setting aside the Award dated 17 th August, 2006. The learned single Judge, after hearing both the sides, set aside the award of the arbitrator on the ground that the award passed by the Arbitrator was not in accordance with the Arbitration Agreement as the arbitrator has no authority to proceed with the award after stipulated time provided in the agreement and there is undue delay in declaring the award after the conclusion of arguments. The learned single Judge accordingly allowed the petition and set aside the award on the aforesaid ground. The learned single Judge also came to the conclusion that in view of Section 15 (1)(b) of the Act, the mandate of the Arbitrator would automatically stand terminated in terms of the arbitration agreement when time limit for making the Award expired. The aforesaid order of the learned single Judge is challenged by the appellant by way of this appeal.