w w w . L a w y e r S e r v i c e s . i n



M/s. Lots Shipping Company Limited, Kochi, Represented by Its Managing Director, Philip Mathews v/s Cochin Port Trust Board of Trustees, Kochi


Company & Directors' Information:- SHIPPING CORPORATION OF INDIA LIMITED [Active] CIN = L63030MH1950GOI008033

Company & Directors' Information:- LOTS SHIPPING LIMITED [Active] CIN = U63090KL2002PLC007786

Company & Directors' Information:- G R SHIPPING PRIVATE LIMITED [Active] CIN = U61100MH1990PTC058666

Company & Directors' Information:- M R SHIPPING PRIVATE LIMITED [Active] CIN = U63032MH2008PTC185621

Company & Directors' Information:- PORT SHIPPING CO LTD [Active] CIN = L35111WB1906PLC001667

Company & Directors' Information:- K C R SHIPPING COMPANY LIMITED [Strike Off] CIN = U35111TN1983PLC009801

Company & Directors' Information:- G & K SHIPPING PVT LTD [Active] CIN = U67200WB1967PTC027095

Company & Directors' Information:- COCHIN SHIPPING COMPANY COCHIN LTD [Active] CIN = U61200KL1976PLC002821

Company & Directors' Information:- J K BOARD PRIVATE LIMITED [Strike Off] CIN = U20101DL1998PTC094877

Company & Directors' Information:- COCHIN CO PRIVATE LIMITED [Strike Off] CIN = U74999KL1963PTC002029

Company & Directors' Information:- S R S SHIPPING PRIVATE LIMITED [Active] CIN = U63090TN2006PTC059161

Company & Directors' Information:- A K SHIPPING PRIVATE LIMITED [Active] CIN = U74120MH2011PTC225063

Company & Directors' Information:- S B K SHIPPING PRIVATE LIMITED [Strike Off] CIN = U63090TN2000PTC045291

Company & Directors' Information:- M S A SHIPPING PRIVATE LIMITED [Active] CIN = U63010TN2008PTC068185

Company & Directors' Information:- PHILIP & CO LTD [Strike Off] CIN = U36900WB1930PLC019108

Company & Directors' Information:- P. K. SHIPPING PRIVATE LIMITED [Strike Off] CIN = U61200WB2008PTC130755

Company & Directors' Information:- D D SHIPPING PRIVATE LIMITED [Active] CIN = U63040DL1996PTC080417

Company & Directors' Information:- G T SHIPPING PRIVATE LIMITED [Strike Off] CIN = U35110MH2003PTC141432

Company & Directors' Information:- S S M SHIPPING CO PRIVATE LIMITED [Strike Off] CIN = U61100KA1981PTC004350

Company & Directors' Information:- H AND T SHIPPING INDIA PVT LTD [Strike Off] CIN = U63103DL2000PTC107166

Company & Directors' Information:- H. F. SHIPPING PRIVATE LIMITED [Active] CIN = U61200WB2012PTC171818

Company & Directors' Information:- P 3 SHIPPING PRIVATE LIMITED [Strike Off] CIN = U63000MH2009PTC189817

Company & Directors' Information:- R K SHIPPING PRIVATE LIMITED [Active] CIN = U63090MH1995PTC095086

Company & Directors' Information:- A. Y. SHIPPING PRIVATE LIMITED [Strike Off] CIN = U74120MH2014PTC254578

Company & Directors' Information:- R AND H SHIPPING PRIVATE LIMITED [Strike Off] CIN = U63013DL2005PTC139777

Company & Directors' Information:- J N PORT PRIVATE LIMITED [Active] CIN = U45209GJ2013PTC073918

Company & Directors' Information:- B. S. SHIPPING PRIVATE LIMITED [Active] CIN = U63000GJ2010PTC059768

Company & Directors' Information:- S A L SHIPPING PVT LTD [Strike Off] CIN = U61100DL1988PTC031000

Company & Directors' Information:- N S SHIPPING PRIVATE LIMITED [Strike Off] CIN = U63090MH2000PTC126397

Company & Directors' Information:- K R T SHIPPING COMPANY PRIVATE LIMITED [Strike Off] CIN = U63032MH1995PTC091728

Company & Directors' Information:- A P M SHIPPING PRIVATE LIMITED [Strike Off] CIN = U63090MH1998PTC115991

    OP(C). No. 586 of 2018 (O)

    Decided On, 28 April 2020

    At, High Court of Kerala

    By, THE HONOURABLE MR. JUSTICE C.K. ABDUL REHIM & THE HONOURABLE MRS. JUSTICE V. SHIRCY

    For the Petitioner: Anil S. Raj, Anila Peter, K.N. Rajani, P. Radhika Rajasekharan, S. Sudheesh, Sajen Thampan, Advocates. For the Respondent: R1, K. Anand, Sr. Advocate, Latha Anand, SC, P.B. Krishnan, Amicus Curiae.



Judgment Text

Abdul Rehim, J.1. A learned Judge of this court has referred the above case on the opinion that it requires an authoritative pronouncement by a Division Bench, on the issue with respect to interpretation of the word “court” contained in sub-section (4) of Section 29A of the Arbitration and Conciliation Act, 1996('the Act', for short), as it stood amended by virtue of the Arbitration and Conciliation (Amendment) Act, 2015, which came into force on 23.10.2015.2. Section 29A of the Act deals with the 'time-limit for arbitral award'. The provisions of Section 29-A is extracted hereunder for an easy reference;“29A. Time limit for arbitral award.—(1) The award shall be made within a period of twelve months from the date the arbitral tribunal enters upon the reference.Explanation.— For the purpose of this sub-section, an arbitral Tribunal shall be deemed to have entered upon the reference on the date on which the arbitrator or all the arbitrators, as the case may be, have received notice, in writing, of their appointment.(2) If the award is made within a period of six months from the date the arbitral tribunal enters upon the reference, the arbitral tribunal shall be entitled to receive such amount of additional fees as the parties may agree.(3) The parties may, by consent, extend the period specified in sub-section (1) for making award for a further period not exceeding six months.(4) If the award is not made within the period specified in sub-section (1) or the extended period specified under sub-section (3), the mandate of the arbitrator(s) shall terminate unless the Court has, either prior to or after the expiry of the period so specified, extended the period.Provided that while extending the period under this sub-section, if the Court finds that the proceedings have been delayed for the reasons attributable to the arbitral tribunal, then, it may order reduction of fees of arbitrator(s) by not exceeding five per cent for each month of such delay.(5) The extension of period referred to in sub-section (4) may be on the application of any of the parties and may be granted only for sufficient cause and on such terms and conditions as may be imposed by the Court.(6) While extending the period referred to in subsection (4), it shall be open to the Court to substitute one or all of the arbitrators and if one or all of the arbitrators are substituted, the arbitral proceedings shall continue from the stage already reached and on the basis of the evidence and material already on record, and the arbitrator(s) appointed under this section shall be deemed to have received the said evidence and material.(7) In the event of arbitrator(s) being appointed under this section,the arbitral tribunal thus reconstituted shall be deemed to be in continuation of the previously appointed arbitral Tribunal.(8) It shall be open to the Court to impose actual or exemplary costs upon any of the parties under this section.1(9) An application filed under sub-section (5) shall be disposed of by the Court as expeditiously as possible and endeavour shall be made to dispose of the matter within a period of sixty days from the date of service of notice on the opposite party.”3. Sub-section (4) of Section 29 provides that if the award is not made within the period specified in sub-section (1) or the extended period specified under sub-section (3), the mandate of the arbitrator shall terminate unless the court has, either prior to or after the expiry of the period so specified, extended the period. Sub-section (5) stipulates that the extension of the period referred to in sub-section (4) may be on the application of any of the parties and may be granted only for sufficient cause and on such terms and conditions as may be imposed by the court.4. While considering the question as to which is the “court” specified under Sub-Section (4) of Section 29A, a learned Judge of this court in the decision in M/s URC Construction Pvt. Ltd. v. M/s BEML Ltd., Palakkad(2017 (5) KHC 865) = ILR 2018 (1) Ker. 440) held that, going by Sub Clause (i) of clause (e) of Sub-Section (1) of Section 2 of the Act, in the case of a domestic arbitration, an application under sub-section (5) of Section 29A seeking extension of the period referred to in Sub-Section (4), has to be made before the principal civil court of original jurisdiction in the District or the High Court in exercise of its original civil jurisdiction. The relevant provisions contained in Section 2 of the Act is extracted hereunder for an easy reference;“Sec.2. Definitions - 1) In this Part, unless the context otherwise requires, -xxx xxx xxx(e) Court” means—(i) in the case of an arbitration other than international commercial arbitration, the principal Civil Court oforiginal jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any Civil Court of a grade inferior to such principal Civil Court, or any Court of Small Causes;(ii) in the case of international commercial arbitration,the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, and in other cases, a High Court having jurisdiction to hear appeals from decrees of courts subordinate to that High Court.”5. On the facts of the case at hand, the sole Arbitrator nominated had entered upon the reference on 13.05.2016. Upon expiry of the period of one year stipulated under Section 29A(1), at the request of both the parties, the time was further extended for a period of six months by the Arbitrator. Since the facts and evidence involved in the proceedings are elaborate and highly technical in nature, evidence could not be completed within the extended period. Therefore one of the parties had approached this court through an Arbitration Petition filed under Section 29A(5), seeking extension of the time, as provided under sub-section (4) of Section 29A. But in view of the decision in M/s URC construction(supra), the Registry has noted defect. Therefore the above original petition was filed invoking powers vested on this court under Article 227 of the Constitution of India. In substance and essence, the relief sought for in this original petition also is for extension of the time, to be granted by exercising powers vested under Section 29A(4) of the Act.6. When the case came up for consideration before the learned Single Judge, both sides contended that the view taken in M/s URC construction(supra) requires reconsideration, since the impact of Section 11(6), 14 & 15 of the Act was not taken into consideration before arriving at the view that the “court” mentioned in Section 29A(4) of the Act is the principal civil court in view of Section 2(1)(e)(i) of the Act. It was argued that a contextual interpretation of the provision contained in Section 29A is required, especially in view of the provisions contained in Section 2(1) which clarifies that the meanings provided thereunder are subject to the rider; “unless the context otherwise requires”. It was argued that, the power vested under Section 29A of the Act, when analyzed in comparison with other provisions of the Act, would lead only to the necessary and irresistible conclusion that the power of extension of the term of the arbitrator, is one akin to the powers conferred under Section 11(6), 14 & 15 of the Act dealing with, appointment, termination of mandate and substitution of arbitrator.7. Learned counsel appearing for the parties in the case as well as Advocate P.B. Krishnan, Amicus Curiae, assisting the court had taken the view that the power of appointment of arbitrator under Section 11(6) has to be read with Sections 14 and 15 dealing with termination of the mandate and substitution of the arbitrator. Those powers are treated as part and parcel of the power for appointment of the arbitrator, as reiterated through the rulings of the hon'ble Supreme Court in A.C.C. Ltd. v. Global Cements Ltd.[(2012) 7 SCC 71] and in Shailesh Dhairyawan v. Mohan Balakrishna Lulla[(2016) 3 SCC 619]. On that basis it was argued that, the jurisprudential nature and character of the power conferred under Section 29A(4) could be envisaged as species of the genus of the power for appointment of the arbitrator as well as the power for termination of the mandate and for substitution of the arbitrator, as envisaged under Section 11(6) and Sections 14 & 15 of the Act. It was pointed out that, depending upon whether the arbitral proceedings is domestic arbitration or international arbitration, the High Court or the Supreme Court, as the case may be, is exercising power to appoint the arbitrator as provided under Section 11(6) of the Act. Quite anomalous are the powers conferred on the High Court or the Supreme Court, as the case may be, with respect to termination of the mandate and substitution of the arbitrator, as provided under Sections 14 & 15 of the Act. The power under Section 29A is more akin to the power of appointment, termination of mandate and substitution of the arbitrator. If a literal interpretation is given to the word, “court' used in Section 29(4) by referring to the meaning of “court” contained in Section 2(1)(e)(i) of the Act, the fallout could be that, where the apex court appoints the arbitrator in a case of international commercial arbitration, then the court to grant extension of time in such case would be the High Court and not the apex court. So also, in a case where the High Court appoints an arbitrator in a domestic arbitration, the court to grant extension of time would be the principal court of original civil jurisdiction in the District and not the High Court. Therefore the necessity for a contextual interpretation is pressed into service. It is argued that a 'purposive interpretation' or 'purposive construction' will be relevant and necessary. Reliance was placed on the decision of Shailesh Dhairyawan(supra) to emphasize that, 'purposive interpretation' or 'purposive construction' is based on the understanding that the court is supposed to attach that meaning to the provisions, which serve the “purpose” behind such a provision. The basic approach should be to ascertain what it is designed to accomplish. In the interpretive process the court is supposed to realise the goal that legal text is designed to realise. Based on the above arguments, the case is referred for decision of a Division Bench for an authoritative pronouncement on the issue.8. We heard Sri. Anil S. Raj, learned counsel appearing for the petitioner, Sri. K. Anand, learned Senior Counsel who appeared for the respondent and Sri. P.B. Krishnan, Amicus Curiae appointed to assist the court.9. Question to be decided is whether the term “court” contained in Section 29A(4) requires a contextual interpretation apart from the meaning contained in Section 2(1)(e)(i) of the Act. A contextual interpretation is clearly permissible in view of the rider contained in sub-section (1) of Section (2), “unless the context otherwise requires”. As argued by the counsel on either side and as submitted by the learned Amicus Curiae, a contextual interpretation is required since the power conferred on the court under Section 29A, especially under sub-sections (4) and (5), are more akin to the powers conferred on the Supreme Court and the High Court, as the case may be, under Sections 11(6), 14 & 15 of the Act, for appointment, termination of mandate and substitution of the arbitrator. It is pointed out that, the amendments introduced in the year 2015, with effect from 23.10.2015, has recognized the judgment of the Constitutional Bench of the apex court in SBP & Company v. M/s Patel Engineering Company Ltd. and another [(2005) 8 SCC 618] and conferred the power of appointment on the Supreme Court or the High Court. The amendment has not in any manner enhanced the power of the principal civil court, which continues only with respect to matters provided under Sections 9 and 34 of the Act. It is significant to note that the orders passed by the principal civil court of original jurisdiction under Sections 9 and 34 are made appealable under Section 37 of the Act. So also, order if any passed refusing to refer the parties to arbitration under Section 8 of the Act, was also made appealable under Section 37(1)(a) of the Act. Section 29A was introduced to make it clear that, if the arbitration proceedings is not concluded within 18 months, even if the parties have consented for an extension, it cannot be continued unless a judicial sanction is obtained. The power to grant extension by the court is introduced under an integrated scheme which also allows the court to reduce the fees of the arbitrator or to impose cost on the parties and/or to substitute the arbitrator(s). The power of extension is to be exercised on satisfying “sufficient cause' being made out. In all respect, such power conferred under Section 29A for permitting extension with respect to the proceedings of arbitration, is clearly akin to the powers conferred under Sections 14 & 15 of the Act. The absence of any provision for an appeal with respect to the exercise of such power under Section 29A, in the nature as mentioned above, would indicate that the power under Section 29A is not to be exercised by the principal civil court of original jurisdiction. Otherwise, it will create anomalous situation of identical powers being exercised in a contrary manner, prejudicial to the hierarchy of the courts. In a case where appointment of an arbitrator is made under Section 11(6) of the Act by the High Court or the Supreme Court, as the case may be, it would be incongruous for the principal civil court of original jurisdiction to substitute such an arbitrator or to refuse extension of the time limit as provided under Section 29A, or to make a reduction in the fees of the Arbitrator. Therefore a purposive interpretation becomes more inevitable.10. In Shailesh Dhairyawan(supra) it was observed that, “the principle of “purposive interpretation” or “purposive construction” is based on the understanding that the court is supposed to attach the meaning of the provisions which will serve the “purpose” behind such a provision. The basic approach should be to ascertain what is it designed to accomplish. In the interpretive process, the court is supposed to realise the goal that the legal text is designed to realise. The statutory interpretation of a provision is never static, but is always dynamic. Though the literal rule of interpretation, till some time ago, was treated as the “golden rule”, it is now the doctrine of purposive interpretation which is predominant, particularly in those cases where literal interpretation may not serve the purpose or may lead to absurdity. If it brings about an end, which is at variance with the purpose of statute, that cannot be countenanced.11. Taking note of the principle enunciated herein above and on the basis of the detailed analysis, we are inclined to hold that the term “court” used in Se

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ction 29(4) has to be given an contextual and purposive interpretation, which is to be in variance with the meaning conferred to the said term under subsection Section 2(1)(e)(i) of the Act. The term “court” contained in Section 29(4) has to be interpreted as the 'Supreme Court' in the case of international commercial arbitrations and as the 'High Court' in the case of domestic arbitrations. Hence it is held that, either of the party will be at liberty to file an arbitration petition before the High Court under Section 29A(5) of the Act, seeking extension of time for continuance of the arbitration proceedings in exercise of the power conferred under Section 29A(4) of the Act, in the case of any domestic arbitration. The reference is answered accordingly.12. We take note of the fact that the above case was filed by invoking Article 227 of the Constitution of India, which cannot be considered as the apposite power to be exercised for permitting continuance of the arbitration proceedings. However, taking note of the legal position settled as above, in order to avoid multiplicity of proceedings, we are inclined to allow the original petition. We notice that the petitioner has filed an application as I.A. No.1 of 2019 seeking extension of time limit for passing the arbitral award by a period of three months. The said interim application was filed on 7th June, 2019. When the application came up for consideration it was submitted that the proceedings before the arbitrator now stands concluded. Under the above mentioned circumstances, we are inclined to allow the original petition, by extending the period of arbitration in the case at hand, till the date of passing of the award.
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