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S.M. Shivanna & Others v/s M/s. Shri Diya Projects Private Limited, Rep. by its Managing Director, R.B. Shankar Prasad, Bengaluru & Another

    Commercial Appeal No. 145 of 2021
    Decided On, 11 March 2022
    At, High Court of Karnataka
    By, THE HONOURABLE CHIEF JUSTICE MR. RITU RAJ AWASTHI & THE HONOURABLE MR. JUSTICE S.R. KRISHNA KUMAR
    For the Appellants: G.V. Shashi Kumar, A.M. Suresh Reddy, Advocates. For the Respondents: R1, S. Sreevatsa, Senior Advocate, Parvathy R. Nair, Advocate.


Judgment Text
(Prayer: This Commercial Appeal is filed under Section 13(1a) of the Commercial Courts Act, 2015 r/w Section 37(1)(C) of the Arbitration and Conciliation Act, 1996, praying to call for records in Com.A.S.No.100/2018 on the file of the Court of the LXXXIII Additional City Civil and Sessions Judge (Commercial Court), Bengaluru City (CCH No.84) and set aside the order dated 06/07/2021 passed in Com.A.S.No.100/2018 by the Court of the LXXXIII Additional City Civil and Sessions Judge (Commercial Court), Bengaluru City (CCH No. 84) (Annexure-A) and dismiss the application filed under Section 34 of the Arbitration And Conciliation Act, 1996.)

S.R. Krishna Kumar, J.

1. This appeal is directed against the impugned judgment and order dated 06.07.2021 passed in Com.A.S.No.100/2018 by the LXXXIII Additional City Civil Judge, (Commercial Court), Bengaluru City whereby, the Commercial Court allowed the suit/petition filed by respondent No.1 under Section 34 of the Arbitration and Conciliation Act, 1996 (for short 'the said Act of 1996') thereby set aside the award dated 03.03.2018 passed in A.C.No.85/2016 by the Arbitral Tribunal comprising of sole Arbitrator.

2. Heard learned counsel for the appellants and learned Senior Counsel appearing for respondent No.1 and perused the material on record.

3. The material on record discloses that pursuant to the claim put forth by respondent No.1-claimant against the appellants-respondents before the Arbitral Tribunal, the Arbitral Tribunal proceeded to pass the award partly allowing the counter claim of the appellants/respondents therein. Aggrieved by the award of the Arbitral Tribunal, respondent No.1 herein preferred Com.A.S.No.100/2018 before the Commercial Court. Before the Commercial Court, it was contended that the arbitral award passed by the sole Arbitrator was beyond the period prescribed under Section 29A of the said Act of 1996 and consequently, the award passed in the arbitration proceedings was a nullity and void.

4. After considering the rival contentions, by the impugned judgment and order, the Commercial Court allowed the suit/petition filed by respondent No.1 thereby set aside the arbitral award dated 03.03.2018. Aggrieved by the impugned judgment and order passed by the Commercial Court, the appellants are before this Court by way of the present appeal.

5. A perusal of the impugned judgment and order passed by the Commercial Court would indicate that at paragraph 17, it has recorded a finding that since the arbitration proceedings in the instant case commenced prior to 23.10.2015, the amended provisions of Section 29A of the said Act of 1996 would not apply to the facts and circumstances of the instant case and consequently, the timelines prescribed therein would have no application insofar as the arbitral award is concerned.

6. Be that as it may, learned counsel for the appellants as well as learned Senior Counsel appearing for respondent No.1 would submit that the parties have no objection for both the arbitral award passed by the sole Arbitrator as well as the impugned judgment and order passed by the Commercial Court being set aside and the matter being referred to sole Arbitrator to be appointed by this Court for reconsideration afresh in accordance with law.

7. By consent of learned counsel for the parties, Sri Subhash B. Adi, Former Judge, High Court of Karnataka, is hereby appointed as the sole Arbitrator

8. In view of the aforesaid facts and circumstances and the joint submission made on behalf of the appellants as well as respondent No.1, without expressing any opinion on the merits/demerits on all aspects of the matter, we deem it just and proper to set aside arbitral award dated 03.03.2018 as well as impugned judgment and order dated 06.07.2021 passed by the Commercial Court and remit the matter back to the newly appointed sole Arbitrator for reconsideration afresh in accordance with law.

9. In the result, we pass the following:

ORDER

(i) The appeal is hereby disposed of.

(ii) The impugned judgment and order dated 06.07.2021 passed by the Commercial Court as well as the award dated 03.03.2018 passed by the sole Arbitrator are hereby set aside.

(iii) The dispute between the parties is referred for adjudication before Sri Subhash B. Adi, Former Judge, High Court of Karnataka to proceed in accordance with law.

(iv) Since it is submitte

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d by learned counsel for the parties that the evidence has already been completed, permission to adduce further evidence by either side would be left to the discretion of the sole Arbitrator. (v) The learned sole Arbitrator is hereby requested to conclude the proceedings within a period of six months from the date of the first sitting of arbitration pursuant to this order. The pending interlocutory application does not survive for consideration and is accordingly disposed of.
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