Court Condones 258 Days Delay in Arbitration Application Due to Exceptional Circumstances Involving COVID-19 and Project Preservation Efforts
In a significant ruling, the Bombay High Court has appointed a sole arbitrator to adjudicate disputes between INFRA Poonam Developers LLP and its partners in the redevelopment project of Panwala chawl in Mumbai. The decision, delivered by Justice Sandeep V. Marne, condoned a 258-day delay in filing the arbitration application, citing exceptional circumstances and the necessity of preserving the project amidst COVID-19 disruptions.
The applicant, INFRA Poonam Developers LLP, had initially invoked the arbitration clause on June 20, 2020, following disputes over the redevelopment project. However, the application for appointing an arbitrator was delayed due to ongoing litigation to safeguard the project from MHADA's acquisition and the impact of the COVID-19 pandemic. The court recognized these efforts as a substantial cause justifying the delay.
Justice Marne highlighted the applicability of Article 137 of the Limitation Act, prescribing a three-year period for arbitration applications, and referenced the Supreme Court's directive excluding the pandemic period from limitation calculations. Despite the respondent's argument that the applicant engaged in other litigations during the pandemic, the court adhered to the Supreme Court's blanket exclusion of the COVID-19 period for limitation purposes.
The court emphasized that the applicant's actions to preserve the arbitration subject matter were crucial. It noted that the applicant took numerous steps, including securing interim measures to restrain third-party rights and prevent MHADA's coercive actions, thereby demonstrating a strong case for condonation of delay.
Addressing the merits of the arbitration application, the court confirmed the existence of an arbitration agreement in the Deed of Alteration of Partnership dated April 10, 2013. Consequently, Justice A. A. Sayed, former Chief Justice of the Himachal Pradesh High Court, was appointed as the sole arbitrator to resolve the matter.
This ruling underscores the judiciary's balanced approach in considering procedural delays amidst extraordinary circumstances and reaffirms the importance of expeditious dispute resolution in arbitration matters.
Bottom Line:
Arbitration and Conciliation Act, 1996 - Application under Section 11(6) for appointment of arbitrator - Period of limitation prescribed under Article 137 of the Limitation Act applies - Delay can be condoned under Section 5 of the Limitation Act in exceptional cases where a strong and justified cause is made out.
Statutory provision(s):
Arbitration and Conciliation Act, 1996 - Section 11(6), Limitation Act, 1963 - Article 137, Section 5
INFRA Poonam Developers LLP v. Jasbir Singh, (Bombay) : Law Finder Doc id # 2879398
