The judgment, delivered by Justice Rohit Ranjan Agarwal, underscored the arbitrator’s prolonged inaction and hasty proceedings post-application seeking removal, leading to the breach of Section 14 of the Arbitration & Conciliation Act, 1996.

The case stemmed from a dispute initiated in 2006 between Amit Agrawal (the petitioner) and respondent No.1. The matter was referred to a sole arbitrator, Pradeep Sharma, in January 2007. However, progress was stymied by an interim award challenge from respondent No.1 under Section 34 of the Act, which was eventually allowed in 2018.

Additionally, respondent No.1 lodged three Section 9 cases, all dismissed in 2007. Despite this, the arbitrator issued an order under Section 17 of the Act in October 2014. Promptly thereafter, respondent No.1 invoked Section 14(1)(a) of the Act, asserting the end of the arbitrator’s mandate.

The arbitrator, however, delayed any response until August 13, 2015, and abruptly scheduled the final award for August 30, 2015. Respondent No.1 swiftly filed an application under Section 14(2) on August 20, 2015, before the District Judge in Meerut, which triggered further legal proceedings.

Even after the delivery of the final award on September 24, 2015, respondent No.1 persisted, filing another application under Section 14(2) in May 2016, leading to its renumbering as Arbitration Case No.142 of 2022. The District Judge, acting on these applications, terminated the arbitrator’s mandate, prompting the petitioner to file two writ petitions under Article 227, contesting the judgment.

The petitioner argued various points, including the non-applicability of the amended Section 14(1) due to the timing of the application, and challenged the arbitral seat location.

On the other hand, the respondent contended that Meerut was the established seat of arbitration and justified the application under Section 14(2) based on the arbitrator’s inordinate delay, citing the period between 2007 and 2014 with no substantial progress.

In its analysis, the Court affirmed Meerut as the seat of arbitration, supported by correspondence and legal precedents. Additionally, the Court deemed the Section 14(2) application maintainable due to the arbitrator’s prolonged inaction from 2007 to 2014 and the subsequent haste after the application was filed.

The Court clarified that ’undue delay’ wasn’t mere procrastination but required a demonstration of unwarranted or unjustified delay. The arbitrator’s failure to act promptly, along with specific mention of the pending Section 14(2) decision in the final award, led to the affirmation of the termination of the mandate.

The case, titled Amit Agarwal v. Atul Gupta, signifies a significant legal precedent emphasizing the crucial aspect of timely and justified proceedings in arbitration cases, solidifying the importance of adherence to stipulated ttimelines. In this critical decision, the Court has not only highlighted the need for expeditious resolution but also underscored the consequences of undue delay, establishing a pivotal benchmark for future arbitration cases.

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