@JUDGMENTTAG-ORDER
Vipin Sanghi, J.@mdashThis appeal has been preferred under Section 37(2)(A) of the Arbitration and Conciliation Act, 1996 (the Act) to assail the order dated 23.12.2013 passed by the learned Sole Arbitrator, whereby the application preferred by the appellant - Bharat Aluminium Company Limited (BALCO) before the Arbitral Tribunal to seek amendment of the statement of claim has been rejected.
2. At the outset, learned counsel for the appellant was asked to satisfy as to how the present appeal is maintainable before this Court, as an appeal to the Court from an order passed by the Arbitral Tribunal is maintainable where the plea referred to in sub-Section (2) or sub-Section (3) of Section 16 has been accepted, or where an order has been passed granting, or refusing to grant an interim measure under Section 17. Learned counsel for the appellant submits that while passing the impugned order, the Tribunal has, in effect, held that it does not have the jurisdiction to deal with the said application.
3. The submission of learned counsel for the appellant is that under Section 23(3) of the Act, either party may amend, or supplement his claim or defence during the course of the Arbitral proceedings, unless the Arbitral Tribunal considers it inappropriate to allow the amendment and supplement having regard to the delay in making it.
4. Mr. Sen submits that the Arbitral proceedings continue till they are terminated in terms of Section 32 of the Act. He submits that till the award is rendered, the proceedings would not terminate in the present case. Consequently, the appellant was entitled to seek amendment of statement of claim even at the final stage of hearing before the Tribunal. Mr. Sen has placed reliance on the judgment of the Supreme Court in
5. The impugned order is short, and I consider it appropriate to reproduce the same in its entirety.
"The claimant has filed an application seeking leave to amend the claim statement for making some additional claims. The respondent has filed the reply to the application for amendment of the claim statement.
This arbitral tribunal was constituted pursuant to the order passed by the High Court on 07.04.2004.
The matter has been pending and the ld. senior counsel for the claimant was addressing arguments on merits and the matter was part heard. It is at this stage that the claimant has come forward with this application.
The tribunal derives its jurisdiction from the order passed by the Hon''ble High Court in 2004. The parties had been proceeding with their respective contentions only on the basis of the order passed by the High Court. Now, the claimant is seeking to make additional claims.
I am of the view that this tribunal cannot entertain such application for leave to amend and it is for the claimant to approach the High Court for appropriate directions in this behalf.
Accordingly, the application for leave to file additional claims stands closed and it is disposed of in the above mentioned terms.
The main matter is being argued and the matter is pending for a long time. For further arguments of the claimant, the matter stands adjourned to,
Monday, 10th March 2014 at 4.30 P.M. and
Tuesday, 11th March 2014 at 4.30 P.M.
For Respondent''s arguments the matter shall be taken up for hearing on,
Friday, 4th April 2014 at 4.30 P.M. and
Saturday, 5th April 2014 at 5 11.00 A.M.
For further arguments of the Respondent or for rejoinder arguments, the matter shall be heard on,
Friday, 25th April 2014 at 4.30 P.M. and
Saturday, 26th April 2014 at 11.00 A.M.
I hope to pronounce the award on Monday 25th August 2014 at 4.30 P.M.
As mentioned in the order dated 20.11.2013, the Claimant shall confirm availability of the venue for the next four hearings, i.e. the hearings scheduled on 10.03.2014, 11.03.2014, 04.04.2014, 05.04.2014. The Respondent shall confirm the venue for the remaining two hearings, i.e. on 25.04.2014 and 26.04.2014. The expenses towards the venue on the date of pronouncement of the award shall be borne equally by the respondent and the claimant."
6. A perusal of the impugned order shows that the reasoning adopted by the learned Arbitrator while passing the impugned order is, inter alia, that the Arbitral Tribunal was constituted pursuant to orders passed by the High Court on 07.04.2004; the matter has been pending and the learned senior counsel for the claimant was pressing arguments on merits, and the matter was part-heard; at that stage, the claimant has come forward with the application to seek amendment of the statement of claim, for making some additional claims. The Tribunal observed that it derives its jurisdiction from the orders passed by the High Court. The parties had been proceeding with their respective contentions only on the basis of the order passed by the High Court. Now, the claimant was seeking to make additional claims. The Tribunal expressed the view that it could not entertain such an application to amend the statement of claim, and that it was for the claimant to approach the High Court for appropriate directions in this behalf. The Tribunal proceeded to fix the matter for further arguments as noticed above, and the Tribunal has observed that the award is likely to be pronounced on 25.08.2014.
7. From the impugned order, it appears that the real reason for rejection of the application is the fact that the arbitration had been pending since April 2004 and the matter was at the final stage of arguments when the application for amendment was moved by the claimant. The reason for rejection of the amendment application, therefore, appears to be the inordinate delay on the part of the appellant to move the application, and not so much on account of the Tribunal holding that it does not have the power to grant amendment. I am, therefore, of the view that this appeal is not maintainable and it is for the appellant to assail the order, if, eventually the award is rendered against it in proceedings under Section 34 of the Act.
8. In any event, even if it were to be accepted that the present appeal is maintainable because the Arbitral Tribunal has not exercised the jurisdiction vested in it, I see no reason to interfere with the order passed by the Arbitral Tribunal.
9. From the aforesaid decision in State of Goa (supra), it is clear that the jurisdiction of the Tribunal is not limited to the claims enumerated by the claimant in a petition under Section 11 and that the respondent is not precluded from raising a counter claim even if he has not pleaded the same in his reply to a petition under Section 11. The Court observed that by virtue of Section 23, once an arbitrator is appointed, the claimant is required to file his statement of claim which need not be restricted to the claims already raised by him in his notice, unless otherwise agreed by the parties.
10. The Court further observed that similarly, Section 23 read with Section 2(9) make it clear that a respondent is entitled to raise a counter claim unless the parties have otherwise agreed. Therefore it cannot be assumed that where one party files an application under Section 11 of the Act, and gets the Arbitrator appointed, the Arbitrator can decide only the disputes raised by the applicant under Section 11 of the Act, and not the counter-claims of the respondent.
11. No doubt, the Arbitral Tribunal has the jurisdiction to deal with and grant amendment of a statement of claim, counter-claim, counter-statement and other pleadings before the Tribunal. However, that does not mean that in every case where such an application has been moved before the termination of the proceedings, the Tribunal is bound to grant the amendment. It would depend on the facts of each case as to whether, or not, the amendment should be allowed by the Tribunal. Section 23(3) itself is a clear pointer that such amendment may be refused, if there is delay in making it.
12. I cannot accept the submission of Mr. Sen that the use of the expression "having regard to the delay in making it" means that the Tribunal can reject the amendment application only in such cases, where proposed amendment is barred by limitation. If it were so, Section 23(3) would have clearly stated that amendments which are barred by limitation would not be allowed. In fact, that is an obvious position of law and nothing need be stated. The Legislature has used the words "having regard to the delay in making it", which means such delay which is unjustified and not sufficiently explained. In the present case, the Arbitral Tribunal has been guided by the fact that the proceedings were pending since 2004, and the matter had proceeded on the basis of the statement of claim as originally filed, and the matter was already at the final stage of arguments, and arguments were part-heard. Pertinently, the appellant does not appear to have even made an attempt to explain the delay in moving the application for amendment of the statement of claim. Even before this Court no such attempt has been made.
13. Mr. Sen has shown to the Court several amendments which were sought to be incorporated. These proposed amendments are the incorporation of additional pleadings as Paras 51A to 51D, and the incorporation of the following additional reliefs:
"(u) Award in favour of the claimant and against the respondent an amount off INR 1,58,18,843/- towards the excess water charges collected by the Respondent from Claimant for the period Sep 2010 to Oct 2010 (for payment to water resource department) as against the discounted rates paid by NTPC as charges for water supply for that period and direct NTPC to receive water charges on 90% water consumption by Balco from Nov. 2011 till date as applicable.
v) Award in favour of the Claimant and against the respondent an amount of INR 6.78 crores towards investments made by the claimant towards water intake system which was constructed in 2004, in the event it is held that the claimant was entitled to lay the pipeline connected to the present pump-house.
w) Award in favour of the Claimant and against the respondent an amount of INR 3.45 crores towards salary advance and loans and up gradation of salary to the employees of the respondent employed with the Claimant till their transfer to NTPC.
x) Award in favour of the Claimant and against the respondent an amount of INR Rs.5,20,90,228/- from the period November, 2006 to March, 2013 and for subsequent period till handing over of possession of all the quarters to the Claimant as per the terms of the agreement being the amount paid to the Respondent towards maintenance of 151 quarters and which were not handed over by the Respondent for the use of the claimant under the Agreement dated 20.06.2002.�
14. Mr. Sen submits that the said claims which were sought to be incorporated arose during the pendency of the arbitration proceedings and are, in fact, of a continuing nature. He submits that they are in principle linked to the claims originally made by the petitioner.
15. In my view, even if this position were to be accepted, that is not a reason good enough to allow amendment of the claims. What is to be examined is, whether such claims could have been raised before the Tribunal earlier, or not. The issue is whether there is inordinate and unexplained delay in moving the amendment application. From a reading of the claims sought to be incorporated by the proposed amendment, it is clear that the cause of action for making the said claims arose much earlier. For example, the relief sought to be incorporated as relief (u), could have been incorporated after October 2010. The relief sought to be incorporated as relief (v), could have been incorporated in 2004. The relief sought to be incorporated under relief (w), could have been incorporated in the year 2007 since it is stated by Mr. Sen that this claim arose out of order passed by the Supreme Court in that year. The relief sought to be incorporated as relief (x), could have been incorporated any time after November 2006. Thus, the delay is substantial. This delay has to be viewed in the context of the stage at which the proposed amendment was sought. As aforesaid, it has been sought at the final stage of the proceedings, i.e. when the final arguments were in progress, and the matter was already part-heard.
16. Mere rejection of the application for amendment on the ground of it being made belatedly, does not lead to denial of the claim itself, if the cause of action for the same arose after the filing of the initial claim statement. It only means that such additional claims cannot form part of the ongoing arbitral proceedings. The appellant is not prejudiced inasmuch, as, it is open to the appellant to raise such claims in other appropriate proceedings, if they are otherwise so entitled to in law, including the law of limitation. It would strike at the very root of the process of arbitration the objective whereof is expeditious conclusion and disposal of disputes, if belated amendments were to be allowed during the course of arbitration at the final stage of hearing.
17. I am, therefore, of the view that, in any event, there is no merit in this appeal and dismiss the same.
