M/S Janapriya Engineers Syndicate Pvt. Ltd. Versus Union of India

Court / Forum : High Court of Delhi
Citation : O.M.P.(MISC.) (COMM.) 377 & 378 of 2019
Coram : Mr. Justice V. Kameswar Rao
Subject : Section 39 of Arbitration and Conciliation Act, 1996 (“1996 Act”)
Date of Decision : 2020-06-05

Brief Facts

• These petitions have been filed by the Petitioner under section 39 of the 1996 Act with a common prayer directing the Ld. sole arbitrator to pass/deliver the arbitral Award as expeditiously as possible on payment by the Petitioner of the costs demanded by the Ld. sole arbitrator.
• The Respondent has argued that the arbitration proceedings are going on and had not reached the stage where the award has been made and pronounced and is required to be delivered by the learned Arbitrator, therefore, the present petition is outside the ambit of Section 39 of the 1996 Act. The Respondents also pointed out to the words like delivery; refuses to deliver its award; in section 39 of the 1996 Act and contended that the presence of the words in the said section pre-supposes that an arbitration Award has been made, on which the learned Arbitrator has exercised lien and not delivered the Award.

Issues

1. Whether the petitions filed by the Petitioner under section 39 (2) of the 1996 Act are maintainable or not?

Decision

• It was observed by the Court that the stand of the Ld. arbitrator that drafting of the Award shall commence on payment of the fee, does not suggest, that the Award has been made and is ready to be delivered. Perusal of section 39 (2) of the 1996 Act clearly contemplates that the application is maintainable when the Award is made, but not delivered to the parties as a party has not paid the fee demanded by the learned arbitrator. The said situation had not arisen in the present case which was clear from perusal of the proceedings as there was no indication that the proceedings have been reserved for Award.
• It was observed that there is a purpose for delivery of the Award as the delivery of Award shall entitle a party to either challenge the Award or seek execution of the same. It is in such a situation a party can invoke the provision of Section 39(2) of the 1996 Act. It was held that as the aforesaid facts clearly demonstrate that since the position as contemplated in Section 39 of the 1996 Act has not arisen, the present petitions are not maintainable.
• The Court also relied on the case of Assam State Weaving & Manufacturing Co. Ltd. v. Vinny Engineering Enterprises (P) Ltd. and Anr., 2010 (4) R.A.J. 609 (Cal) wherein the following observations have been made in paragraphs 20 and 21:

  “20. Section 39 of the 1996 Act, much like Section 38 of the old Act, recognises an arbitral tribunal's lien over the award. The section conceives of a situation where there may be a dispute between the arbitral tribunal and one or more parties to the reference as to the costs of the arbitration. Upon an arbitral tribunal refusing to deliver its award unless its demand for payment of costs were met by a party, an application may be carried to court for directing the tribunal to deliver the award to the applicant. Sub-section (2) contemplates an applicant thereunder to put into court the costs demanded by the arbitral tribunal. Upon such costs being deposited the court may order the tribunal to deliver the award to the applicant. The court can thereafter inquire into the propriety of the costs demanded and deal with the matter following the inquiry.
  21. Sub-section (3) of Section 39 permits an application under sub-section (2) to be carried by any party to the reference only on condition that the fees demanded were not as fixed by written agreement between the applicant and the arbitral tribunal. The sub-section does not limit an application to be made under sub-section (2) only by a party who has been refused the delivery of the award. The delivery that Section 39 speaks of is the physical delivery of the document embodying the award and not merely the pronouncement of the award. For, it is the physical receipt of the document that would entitle a party to apply for setting aside the award or for implementing it.”

• The petitions were held to be premature and not maintainable and were accordingly dismissed.

Vipul Ganda is a Delhi based Advocate practicing largely at the Delhi High Court. His practice focus is Dispute Resolution and Litigation and his practice areas include Arbitration, Commercial, Civil, Constitutional, Corporate and Criminal Litigation.