APPLICATION FILED AGAIN FOR APPOINTMENT OF ARBITRATOR NOT MAINTAINABLE: RAJASTHAN HIGH COURT

The Rajasthan High Court in the case Vimlesh Bansal v. Ashok Kumar, S.B. Arbitration observed and stated that a second arbitration application would be nonmaintainable when the order of the arbitrator terminating arbitral proceedings under Section 32(2)(c) was not challenged under Section 14(2) of the Arbitration and Conciliation Act. The single bench comprising of Justice Pankaj Bhandari observed and held that the legal maxim ‘Vigilantibus Non-Dormientibus Jura Subveniunt’ which means that ‘the law assists only those who are vigilant and does not assist to those who sleep over their rights’ and it would squarely apply to a situation where the petitioner slept over its right to challenge the order of termination but the petitioner filed a second application for appointment of arbitrator.

Facts of the Case: Earlier, an application was filled by the petitioner for the appointment of the arbitrator, the same was allowed and the Court appointed a sole arbitrator. It was observed that none of the parties appeared before the arbitrator, consequently, the arbitrator terminated the arbitral proceedings under Section 32(2) (c) of the Arbitration and Conciliation Act. While, aggrieving with the decision of the arbitrator, a second application was filled by the petitioner for the appointment of the arbitrator on the ground that no notice was served before the termination of the proceedings. Contentions made by the Parties: On the following grounds, the petitioner sought the appointment of arbitrator: It was observed that no notice was served on the petitioner by the arbitrator before the termination of the arbitral proceedings. It was stated that under Section 11 of the A&C Act, on termination of the mandate of an arbitrator a substitute arbitrator can be appointed. Under Section 11 of the A&C Act, the issue of limitation cannot be decided. Further, it was stated that the Second arbitration application is not maintainable as the petitioner has the option of challenging the award. The court observed that the disputes relate to the year 2009, therefore, are hopelessly and are barred by limitation. The order of termination was passed more than 4 years ago, the preent application is also barred by limitation.

Court Analysis: In the present case, the court held that the second arbitration application would be non-maintainable when the order of the arbitrator terminating arbitral proceedings under Section 32(2)(c) was not challenged under Section 14(2) of the A&C Act. Therefore, the court also observed that the legal maxim ‘Vigilantibus Non Dormientibus Jura Subveniunt’ which means that ‘the law assists only those who are vigilant and not those who sleep over their rights’, it would squarely apply to a situation where the petitioner slept over its right to challenge the order of termination but the petitioner filed second application for appointment of arbitrator. The court stated that the correct recourse for the applicant was to challenge the order of termination under Section 14(2) of the A&C Act. Further, the court observed that the order was passed on 29.11.2016 and the present application was passed after a lapse of 3 years and 7 months, Moreover, the same is barred by limitation. The court also observed and referred the dictum of Uttarkhand Purv Sainik Kalyan Nigam Ltd. Versus Northern Coal Field Ltd, wherein the Supreme Court observed that issue of limitation should be decided by the arbitrator would not apply to a second arbitration application. The Court dismissed the application