In Petition for Special Leave to Appeal No. 5306/2022-SC- “Very sorry state of affairs”, says Top Court while directing Telangana HC to submit detailed report on pendency of applications u/s 11 of Arbitration Act Justices M.R.Shah & B.V.Nagarathna [01-04-2022]

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LE Correspondent

New Delhi, April 5, 2022: Observing that the arbitration applications for the appointment of an Arbitrator are required to be decided and disposed of at the earliest, the Supreme Court has directed the Registrar General of the Telangana High Court to submit a detailed report on pendency of applications u/s 11 of Arbitration and Conciliation Act, 1996.

The Division Bench of Justice M.R.Shah and Justice B.V.Nagarathna opined that if the Section 11 application itself is not decided within one year, even the purpose and object of the amended Arbitration Act shall also be frustrated.

By the impugned judgment in question, the High Court had dismissed/disposed of the Arbitration Application to appoint the Arbitrator, which was filed under Section 11 (5) of the Arbitration and Conciliation Act, 1996. The Application had been dismissed/disposed of in the year 2020 after a long duration of 4 years.

Considering the factual background of the case, the Division Bench said, “It is a very sorry state of affairs that the arbitration application under Section 11 has been decided and disposed of after a period of four years.”

Emphasizing that the applications for appointment of an Arbitrator are required to be decided and disposed of at the earliest, otherwise the object and purpose of the Arbitration Act shall be frustrated, the Court affirmed, “Even as per the amended Arbitration Act, the arbitration proceedings are required to be disposed of within one year. If the Section 11 application itself is not decided within one year, even the purpose and object of the amended Arbitration Act shall also be frustrated.”

Condemning the laid back approach of the Telangana High Court, the Top Court held , “Under the circumstances, we direct the Registrar General of the High Court for the State of Telangana at Hyderabad to submit a detailed report/statement before this Court on or before the next date of hearing pointing out how many Section 11 applications are pending before the High Court and from which year. Such report to be submitted on or before 19.04.2022.”

Additionally the Registry was directed to circulate the copy of the present order to the Registrar of the Telangana High Court and was directed to produce the same before the Chief Justice of the Telangana High Court.