SUMMARY OF ARGUMENTS

[ISSUE I]: WHETHER THE HON’BLE SUPREME COURT HAS THE

JURISDICTION TO ENTERTAIN THE PETITION UNDER SECTION 11 OF
THE ACT IN SO FAR AS IT RELATES TO THE APPOINTMENT OF AN
ARBITRATOR UNDER THE OFF -SHORE CONTRACTS ?

It is humbly submitted before the hon’ble Supreme Court that court has jurisdiction to
entertain the petition under Sec.11(6)(a)1 of the arbitration and conciliation act,
1996( hereinafter referred as “the Act” ) and can appoint arbitrator under the off shore
contracts .

[ISSUE1.2] WHETHER THE ARBITRATION PROCEEDINGS CAN BE

CONSOLIDATED TO APPOINT A COMMON TRIBUNAL CONSISTING OF A
SOLE ARBITRATOR IN THE PRESENT FACTS AND CIRCUMSTANCES.

It is humbly submitted before the Hon’ble Supreme Court of India that Arbitration
Proceeding can be consolidated to appoint a common tribunal consist of sole arbitrator in the
present facts and circumstances.

[ISSUE II] THAT THE CASES WHERE THE ARBITRATOR IS APPOINTED BY

PARTICULAR COURT UNDER SECTION 11 OF THE ARBITRATION ACT, THE
MANDATE OF THE TRIBUNAL WOULD ALSO HAVE TO BE EXTENDED BY
THE SAME COURT UNDER SECTION 42.

It is humbly submitted before the Hon’ble Supreme Court of India that if the arbitrator is
appointed by a particular court under Sec. 112 of the Arbitration And Conciliation Act 1996
then the mandate of that tribunal would also have to be extended by the same Court in the
view of Sec. 423 of the said Act.

[III] THE AWARD DATED 2 MARCH 2018 IS LIABLE TO BE SET ASIDE UNDER
SECTION 34 OF THE ACT.

1
  The Arbitration and Conciliation Act, 1996 .§.11(6)(a).
2
§ 11, The Arbitration and Conciliation Act, 1996.
3
§ 42, The Arbitration and Conciliation Act, 1996.
[A] THE AWARD IS CONTRARY TO THE PUBLIC POLICY OF THE COUNTRY
AND PATENTLY ILLEGAL AS HAVING BEEN PASSED AFTER THE EXPIRY OF
THE MANDATE.

It is humbly submitted before the Hon’ble Supreme Court that the award dated 22 March
2018 is liable to be set aside as it is contrary to the public policy of the country and patently
illegal as having been passed after the expiry of the mandate.
 PRAYER

Therefore in the lights of the facts of the case, issues raised, arguments advanced and
authorities cited this Hon’ble High Court may be pleased to adjudge and declare that:

[I] The Hon’ble Supreme Court have the jurisdiction to entertain the petition under sec.11 of
the Act in so far as it relates to the appointment of the arbitrator under Off-shore Contract.

[II] The arbitration proceeding can be consolidated to appoint a common tribunal consisting
of sole arbitrator in the present facts and circumstance.

[III] In case where arbitrator is appointed by a particular court under Sec.11 of Arbitration
Act, the mandate of the tribunal need to be extended by the same court in view of Sec.42.

[IV][A]The award dated 22nd March 2018 must be set aside under Sec.34 of the Act not being
against the public policy of the country and patently illegal.

[IV][B]

And may pass any other order in favour of the respondent that it may deem fit in the interest
of justice, equity and good conscience.
 LIST OF ABBREVIATION

 SCC- Supreme Court Cases

 AIR - All India Rank.
 SCR- Supreme Court Report
 V. – Versus.
 Ltd. - Limited.
 Co. - Corporation.
 Ors. - Others.
 Pvt. – Private
 Art. - Article
 Btw. – Between.
 Sec. - Section.
 STATEMENT OF JURISDICTION

In the present Arbitration petition nos. 226/2015 under Sec. 11 of the Arbitration Act
concerning the matter of Valentina SpA & Anr. v. INCCL, the petitioner humbly submit to
the jurisdiction of Hon’ble Supreme Court of India.

In the present Arbitration Petition Nos. 74/2016 under Sec. 11 of the Arbitration Act
concering the matter of INCCL v. Valentina SpA & Ors. the petitioner humbly submit to the
jurisdiction of Hon’ble Supreme Court of India.

In the present Special Leave Petition Nos. 18443/2018 under Sec. 136 of the Constitution of
India concerning the matter of INCCL v. Valentina Group, the petitioner humbly submit to
the jurisdiction of Hon’ble Supreme Court of India.

In the present Special Leave Petition Nos.17248/2019 under Sec. 136 of the Constitution of
India concerning the matter of INCCL v. Valentina Group, the petitioner humbly submit to
the jurisdiction of Hon’ble Supreme Court of India.
 STATEMENTS OF FACT

 Valentina SpA, a company incorporated in the law of Italy and is engaged in

providing Construction service in India along with its Subsidiary Company, Valentina
India, a company registered in Companies Act, 1956 and its associate company,
Valentina Company.
 INCCL commenced the process of setting up Greenfield Steel Plant in Umred,
Maharastra, cost USD 3.24billion. The contract was awarded to Valentina and
INCCL allowed Valentina to take assistance from Valentina India and Valentina
Group. INCCL entered into three On-Shore Contract with Valentina wherein
Valentina Group was confirming party ( Annexure -1) and three Off-Shore Contract
with Valentina India( Annexure- 2) both contract dated 23 June 2012. Due to late
commencement of the project there was delay in completion of project wherein
Valentina blamed Contractor for the delay and vice-versa. As a result INCCL
imposed price reduction to the extent of 10% of the total contract price aggrieved by
 this there was several conciliatory meeting btw. INCCL and Contractor but went in
vein.
 In meantime, INCCL entered into contract for providing Assistance in Operation and
Maintenance Service worth about USD 1 billion on 25 June, 2015 with Valentina
Group.
 Valentina invoked arbitration clause on 25th Nov. 2015 under three On- Shore
Contract, called upon INCCL to form arbitration tribunal comprising of sole
arbitrator. However, when INCCL failed to respond Valentina filed a petition
(Arbitration Petition No.226/2015) under Sec.11 before Hon’ble Supreme Court. In
meantime, INCCL called upon reconciliatory meeting but contractor refused hence
INCCL proceeded to file its own petition under Section 11 of the Arbitration Act for
the appointment of sole arbitrator in case of both On-Shore and Off-shore Contract
(Arbitration Petition No.74/2016).The petition have been tagged and will be taken up
by the Supreme Court in due course of time.
 In spite of the dispute, the contractor continued to perform the Maintenance Service
Contract by providing assistance in operation and maintenance of the Plant to INCCL
for a period of 6 month from 2015. INCCL categorically refused to pay amount
claimed by the Valentina Group that this contract was merely a non- binding contract
i.e. a contract merely on paper. Sole arbitrator thus came to be appointed by the
Hon’ble Supreme Court under Sec.11 of the Act. The arbitrator, accordingly entered
reference on 28th July 2016. In terms of Sec.29A of the Arbitration Act, the time
period was mutually extended by parties of 6 month owing to the complexity of the
dispute. However, proceeding could not be completed within the extended period
which came to an end on 28th January 2018.INCCL, thus objected to the sole
arbitrator continuing with the arbitration preceeding in the absence of an extension
from the Court in accordance with Sec. 29A and submitted that the mandate of
arbitrator stands terminated by the Court by a way of Judicial order. Although, sole
arbitrator contended that the mandate could also be extended by the court ex-post
facto. Finally, the award was delivered on 22nd March 2018 and sole arbitrator
directed INCCL to pay a sum of about USD 1 billion plus interest to Valentina Group.
The sole arbitrator rejected contention that this contract is paper contract. Meantime
Valentina filed application under Sec. 29A before Hon’ble High Court of Bombay.
INCCL objected to this application in terms of Sec. 42. However, High court of
 Bombay extended the period, aggrieved by this decision INCCL preferred a Special
Leave Petition (SLP © No. 18443/2018).
 In meantime INCCL also filed application under Sec. 34 before Hon’ble High Court
of Bombay for setting aside award as the award was not only a nullity but also
contrary to the public policy of India and patently illegal. Vide order dated 14th Sep.
2018, the Hon’ble Court ruled that the arbitrator should have extended time period ,
also that Maintenance Service Contract was a paper agreement. Thus, set aside the
award dated 22nd March 2018.
 Aggrieved by this order Valentina filed an application under Section 37 of the
Arbitration Act before Division Bench of Bombay High Court and the decision dated
14.09.2018 was overturned on 26th March 2019.
 As, a result INCCL filed a Special Leave Petition (Special Leave Petition
No.17248/2019) before the Hon’ble Supreme Court of India.

PETITIONER

ARGUMENT ADVANCED

[ISSUE I]: WHETHER THE HON’BLE SUPREME COURT HAS THE

JURISDICTION TO ENTERTAIN THE PETITION UNDER SECTION 11 OF THE
ACT IN SO FAR AS IT RELATES TO THE APPOINTMENT OF AN ARBITRATOR
UNDER THE OFF -SHORE CONTRACTS ?

It is humbly submitted before the hon’ble Supreme Court that court has jurisdiction to
entertain the petition under Sec.11(6)(a)4 of the arbitration and conciliation act,
1996( hereinafter referred as “the Act” ) and can appoint arbitrator under the off shore
contracts . This contention is based on following contentions –

1.1 Valentina India fails to act as required under the appointment procedure:

4
  The Arbitration and Conciliation Act, 1996 .§.11(6)(a).
 Both Parties entered into the offshore contract on 23 /06/2012 where both Parties to the
contract namely, Valentina India (hereinafter referred as “respondent”) and INCCL
(hereinafter referred as “petitioner”) agreed under clause 12.2 ,which provided that in
event of the Parties failing to resolve any dispute amicably , the same shall be referred to
arbitration under the Act. When dispute arise petitioner called respondent to amicably
settle dispute in accordance with the terms of the contract. Since the respondent refused
to attend any such meeting for amicable dispute settlement, petitioner have filed this
petition for appointment of arbitrator under Sec. 11(6)(a) of the act .

1.2 The case in hand comes under the International Commercial Arbitration:

Under Sec. 2(1)(f)5 of the Act, International Commercial Arbitration is defined which states
that :

“international commercial arbitration” means an arbitration relating to disputes arising out of

legal relationships, whether contractual or not, considered as commercial under the law in
force in India and where at least one of the parties is— (I) an individual who is a national of,
or habitually resident in, any country other than India; or (ii) a body corporate which is
incorporated in any country other than India; or (iii) [***]an association or a body of
individuals whose central management and control is exercised in any country other than
India; or (iv) the Government of a foreign country;

1.2.1 The arbitration was “commercial” under the law in force in India :

Honourable Supreme Court in the case of R.M. Investments & Trading Co. P. Ltd. v.
Boeing Co.6observed : The term “commercial” should be given a wide interpretation so as to
cover matters arising from all relationships of a commercial nature, whether contractual or
not. Relationships of a commercial nature include, but are not limited to the following
transactions, any trade transactions for the supply or exchange of goods or services;
distribution agreement; commercial representation or agency; factoring; leasing; construction
of works; consulting; engineering; licensing; investment; financing; banking; insurance;
exploitation agreement or concession; joint venture and other forms of industrial or business
cooperation; carriage of goods or passengers by air, sea, rail or road. It is clear that
“commercial” word must be interpreted in a broad manner which can include every day
management of life. Here in this case contract was related with the supply of good materials
5
The Arbitration and Conciliation Act, 1996 § 2(1)(f).
6
R.M. Investments & Trading Co. P. Ltd. v. Boeing Co., AIR 1994 SC 1136.
for the establishment of plant in Umred (Nagpur), State of Maharashtra and it was to be built
at a total cost of USD 3.24 billion i. Therefore it clearly comes within the definition of
“commercial” and is according to laws of Indiaii.

1.2.2 Valentina India is a subsidy company and forms consortium which falls within the
definition of “Association” under section 2(1)(f)(iii) of the Act and its control and
central management is exercised in country other than India :

The party to the contract , respondent is a subsidiary company iii whose parent company is
Valentina SpA which is a company incorporated in Milan under the laws of Italy iv.
“Subsidiary company” is defined under section 2 (87) of the Companies Act , 2013 as
"subsidiary company" or "subsidiary", in relation to any other company (that is to say the
holding company), means a company in which the holding company—

(i) controls the composition of the Board of Directors; or

(ii) exercises or controls more than one-half of the total voting power either at its own or
together with one or more of its subsidiary companies .

Also , As per the Companies Amendment Act, 2017, Section 2(87)(ii), if the holding
company have control over more than one-half of the voting power of another company, that
particular company will be identified as the subsidiary company. The word “control” is
described in section 2(27) of Companies Act , 2013 as shall include the right to appoint
majority of the directors or to control the management or policy decisions exercisable by a
person or persons acting individually or in concert, directly or indirectly, including by virtue
of their shareholding or management rights or shareholders agreements or voting agreements
or in any other manner. Also in the case of  State of Mysore  v.  Allum Karibasappav Supreme
Court explained the word “control” suggests check, restraint or influence. Control is
intended to regulate and hold in check and restrain from action .Comparing section 2(27)and
section 2(87) it makes it clear that parent company will always have some control over its
appointment and in its major policy decision and parent company will regulate its major
decisions as in this case respondent in past have also provided various services in association
vi
with its parent company and parent company over the years have successfully executed
vii
several complex projects in India . Honourable Supreme Court in the case of R.
viii
Dalmia v. CIT observed that word “management” includes the act of managing by
direction or regulation or administration or control or superintendence . Since the
respondent have been providing services along with its parent company it can be inferred
logically that respondent has been providing services under the superintendence of its parent
company which means its management is exercised in a country other than India i.e Italy .
The counsel submits that the parent company is in form of a “consortium” in which each
company has its own legal entity and profile as observed in the case of M/s. ABG Ports
Limited v. M/s. PSA International Pte. Limited and Ors ix -A Consortium is in the nature of a
partnership and the Consortium members must, in law, bear the liabilities of the Consortium
to the extent of their share in such Consortium. The lead company in this consortium is
respondent company which is incorporated in India as major decisions and management are
controlled from there itself . As far as individual liability of each company is concerned it is
designated as a specific person and their acts will determine their respective liability .
Honourable Court in case of  Krishnan v. Krishnavenix observed person as includes any
company or association or body of persons, whether incorporated or not. The word “person”
would, include not only natural person but also juridical person in whatever form designated
and whether incorporated or not . Further honourable court in the case of Larsen and
Toubro Limited Scomi Engineering BHD vs. Mumbai Metropolitan Region Development
Authorityxi held that an association is referred to in Section 2(1)(f)(iii) which would therefore
include a consortium consisting of two or more bodies corporate, at least one of whom is a
body corporate incorporated in a country other than India. Here the respondent parent
company is incorporated in Italy and it is also the lead company which controls central
management and exercise major influence company then will come within the purview of
section 2(1)(f)(iii) of the Act and the petition filed under section 11 (6) of the act will take
into consideration section 11(12)(a) of the act and the honourable court can appoint arbitrator
in this particular contract .

[ISSUE1.2] WHETHER THE ARBITRATION PROCEEDINGS CAN BE

CONSOLIDATED TO APPOINT A COMMON TRIBUNAL CONSISTING OF A
SOLE ARBITRATOR IN THE PRESENT FACTS AND CIRCUMSTANCES.

It is humbly submitted before the Hon’ble Supreme Court of India that Arbitration
Proceeding can be consolidated to appoint a common tribunal consist of sole arbitrator in the
present facts and circumstances.

[1.2.1] THAT APPOINTMENT OF SOLE ARBITRATOR WILL BE COST EFFECTIVE

AND AVOID THE MULTIPLICITY OF PROCEEDING.
It is humbly submitted before the Hon’ble Supreme Court of India that the consolidation of
arbitrations to appoint a common tribunal consisting of a sole arbitrator for both the On –
shore and Off- shore Contract will be cost effective and avoid the multiplicity of the
proceeding.

In case of M/S Capital Venture Pvt. Ltd.& Anr. V M/ S Global Fragnance Pvt. Ltd. 7 it was
held that in the event of the parties appointing sole arbitrator with a view to saving cost and
time they are at liberty to make an application for modification.

Also in the case Fiona Trusts v. Primalov8  [2007] UKHL 40, the House of Lords observed
that, unless the context requires otherwise, the construction of the arbitration clause should
start from the assumption that parties are likely to have intended any dispute arising out of the
relationship into which they have entered or purported to enter to be decided by the same
tribunal.

The “one-stop presumption” developed in Fiona has also been referred to by the Hon’ble
Supreme Court of in A. Ayyasamy v A. Paramasivam & Ors9 (2016).

The Supreme Court was previously faced with the issue of making a composite arbitral
reference in P. R. Shah v. B. H. H. Securities10 (2011) in an application under section 34. The
Supreme Court summed up its analysis as follows:

If A had a claim against B and C and if A had an arbitration agreement with B and A also
had a separate arbitration agreement with C, there is no reason why A cannot have a joint
arbitration against B & C. Obviously, having an arbitration between A and B and another
arbitration between A and C in regard to the same claim would lead to conflicting decisions.
In such a case, to deny the benefit of a single arbitration against B and C on the ground that
the arbitration agreements against B and C are different, would lead to multiplicity of
proceedings, conflicting decisions and cause injustice. It would be proper and just to say that
when A has a claim jointly against B and C, and when there are provisions for arbitration in
respect of both B and C, there can be a single arbitration.

7
M/S Capital Venture Pvt. Ltd.& Anr. v. M/ S Global Fragnance Pvt. Ltd.
8
Fiona Trusts v. Primalov[2007] UKHL 40.
9
A. Ayyasamy v A. Paramasivam & Ors 2 016 (10) SCC 386.
10
P. R. Shah v. B. H. H. Securities 2011(6) Bom CR 776.
In Filmwaves Combine Pvt. Ltd. v. Kochi Cricket Private Limited & Ors.11, [Arbitration
Application 352 of 2012],  the Bombay High Court applied the principles in P. R. Shah to an
application for appointment of an arbitrator under section 11 of the Arbitration Act. In fact,
the Court categorically rejected the contention that the judgment in P. R. Shah must be
confined to the context of an institutional arbitration governed by the bylaws of the stock
exchange and not to an arbitration governed by a commercial agreement.

Thus, consolidating arbitrations to appoint a common arbitral tribunal consisting of a sole

arbitrator for both the Off -shore Contract and On- shore Contract will avoid the multiplicity
of the arbitral proceeding, would ease the process of justice being delivered , it will be cost
effective because through separate Arbitration proceeding for both the On shore and Off
shore Contract, it will lead to more expenditure of money and other resource and the process
will save the time. Hence, there must be common tribunal consisting of sole arbitrator for
both the On-shore and Off-shore Contract.

[1.2.2] THAT ISSUES ARE INTRINSICALLY LINKED.

It is humbly submitted before Hon’ble Supreme Court of India that issues under the On-Shore
Contract and the Off-Shore Contract intricially linked with each other.

In the case in hand, both the On-shore and Off-shore Contract are signed with INCCL for for
setting up a Greenfield Integrated Steel Plant in Umred (Nagpur), State of Maharastra. The
plant was to be built at a cost of USD 3.24 billion. The contract was eventually awarded to
Valentina, a company incorporated under the laws of Italy. Moreover it is clearly mentioned
in the fact sheet the involvement or rather say assistance of other company subsidiary to
Valentina ,Valentina India and Valentina Group was allowed by INCCL because of taking
into consideration the magnitude of the Project and also to ensure its timely completion. Thus
the sole reason for the involvement of the other companies was to provide assistance to
Valentina in completion of the project assigned.

Moreover, the division of the contract into Off-shore and On-shore contract was solely to
ease the execution of the project aiming at completion of the construction Greenfield Plant,
hence both the On-shore and Off-shore contract are intrinsically linked with each other.

11
Filmwaves Combine Pvt. Ltd. v. Kochi Cricket Private Limited & Ors., [Arbitration Application 352 of
2012].
[ISSUE II] THAT THE CASES WHERE THE ARBITRATOR IS APPOINTED BY
PARTICULAR COURT UNDER SECTION 11 OF THE ARBITRATION ACT, THE
MANDATE OF THE TRIBUNAL WOULD ALSO HAVE TO BE EXTENDED BY
THE SAME COURT UNDER SECTION 42.

It is humbly submitted before the Hon’ble Supreme Court of India that if the arbitrator is
appointed by a particular court under Sec. 1112 of the Arbitration And Conciliation Act 1996
then the mandate of that tribunal would also have to be extended by the same Court in the
view of Sec. 4213 of the said Act.

[2.1] THAT SECTION 42 RESTRICTS THE ARBITRAL PROCEEDING ONCE

COMMENCED IN ANY OTHER COURT.

It is humbly submitted before the Hon’ble Supreme Court of India that Sec. 42 which read as
“Notwithstanding anything contained elsewhere in this Part or in any other law for the time
being in force, where with respect to an arbitration agreement any application under this Part
has been made in a Court, that Court alone shall have jurisdiction over the arbitration
proceedings and all subsequent applications arising out of that agreement and the arbitral
proceedings shall be made in that Court and in no other Court." , restricts the proceeding in
any other court other than the court in which the proceeding first commenced.

In the case of Kumbha Mawji v Dominion of India14 it was held that the necessity of clothing
a single court with effective and exclusive jurisdiction is to bring about an avoidance of
conflict or orders and a scramble.

In case of M/s Bhandari Udyog Ltd. vs. Industrial Facilitation Council and Another15 the
Hon’ble Supreme Court of India held that the Bombay High Court will not have jurisdiction
to entertain a petition under Sec.34 of the Act where an earlier petition under Sec.11 of the
Act had been filed before the High Court of Karnataka. 

12
§ 11, The Arbitration and Conciliation Act, 1996.
13
§ 42, The Arbitration and Conciliation Act, 1996.

14
Kumbha Mawji v Dominion of India AIR 1953 SC 313.

15
M/s Bhandari Udyog Ltd. v. Industrial Facilitation Council and Anr. SLP (C) NO. 8675 OF 2014).
 In the case of Baba Construction Co. V. Punjab State16 (1997) 1 ARB LR 133 (P&H), it was
held that the court which appointed the arbitrator would have exclusive jurisdiction to deal
with the subsequent applications.

In case of  Dalim Kumar Chakraborty V. Gouri Biswas17APO No. 33 of 2018 it was

observed that  in view of the mandate in Sec.42 of the said Act of 1996, once a petition under
Part-I of the Act of 1996 pertaining to an arbitration agreement is carried to a particular court
and such court entertains it and there is no objection as to its jurisdiction, all subsequent
petitions under Part - I of the Act of 1996 pertaining to the same arbitration agreement have
to be carried only to such court.
In the case in hand, it is clearly seen that the Hon’ble Supreme Court of India under Sec.
11(9)18 which is read as:
“In the case of appointment of sole or third arbitrator in an
International Commercial Arbitration, 1[the Supreme Court or the person
or institution designated by that Court] may appoint an arbitrator of a
nationality other than the nationalities of the parties where the parties
belong to different nationalities.”
Thus, as Operation and Maintenance Service Contract is signed btw INCCL and Valentina
Group, associate entity of Valentina, a company incorporated under the law of Italy, thus
dispute arising out of this contractual relation will move under International Commercial
Arbitration, then as per Sec. 11(12)(a)19the Supreme Court of India has appointed Sole
Arbitrator in the present case, hence having the jurisdiction for the same. Once the arbitration
proceeding is commenced in Supreme Court and so the sole arbitrator is appointed, then for
the extension of time period ex post facto as per Sec. 29(a)(4) 20, Valentina Group should
move the application in the Supreme Court itself, not in the Bombay High Court as that
would violate the very essence of Sec.42. which restricts the arbitral proceeding in any court
other than the Court in which it was begun.

[1.2] THAT SECTION 11 COMES UNDER THE PURVIEW OF SECTION 42.

16
Baba Construction Co. V. Punjab State (1997) 1 ARB LR 133 (P&H).
17
Dalim Kumar Chakraborty V. Gouri Biswas APO No. 33 of 2018.
18
§.11(9), The Arbitration and Conciliation Act.
19
§.11(12)(a), The Arbitration and Conciliation Act, 1996.
20
§.29(a)(4), The Arbitration and Conciliation Act,1996.
It is humbly submitted before the Honourable Supreme Court of India that Sec. 11 which
reads as Appointment of Arbitrator comes under the purview of Sec. 42.

Prior to the Amendment Act21, 2015 Sec.11 was declared out of the purview of Sec. 42 since
applications under Sec. 11 are made to the Chief Justice or his designate, the judicial
authority and the Chief Justice or his designate not being court as defined, such applications
would be outside Sec. 42.22

In case of Vijay Gupta vs. Renu Malhotra23wherein the Hon'ble Court had reaffirmed the
view taken in M/s S.K. Brothers Vs. Delhi Development Authority 24and denied the benefit of
Sec. 42 on the basis of the rationale that the expression "Chief Justice" as contained in Sec.
11 of the Act (1996 Act), is not synonymous with the term the "Court" as defined in Sec. 2(1)
(e)25 of the Act, and therefore merely because an arbitrator has been appointed by the chief
justice, the same in itself would not be sufficient to vest jurisdiction with the High Court to
entertain any other/subsequent applications relating to the said arbitral proceedings in which
the arbitrator was appointed, irrespective of the pecuniary limits on its jurisdiction.

However, with the amendment to Sec. 11 which has done away with the expression "Chief
Justice" and has rather conferred the power on the "High Court" or “Supreme Court” as the
case may be and not the Chief Justice. Thus, the procedure of appointing the Arbitrator under
sec. 11 would be sufficient to vest exclusive jurisdiction with the High Court to entertain any
other application relating to the arbitral proceedings in which the arbitrator is appointed.
Hence, replacing the word “ Chief Justice” with the High court or Supreme Court result in the
applicability of Sec.42 to the application under Sec.11 as such application would no longer be
made to the Chief Justice or Chief Justice of India but to the High Court or Supreme Court
i.e. a Court as defined under Sec.(2)(e) of the act.

Hence, in cases where the arbitrator is appointed by a particular Court under Sec.11 of the a
Arbitration Act, the mandate of the tribunal would also only have to be extended by the same
court in the view of Sec.42.

21
Amendment Act 2015.
22
State of West Bengal vs. Associated Contractors (2015) 1 SCC 32). 
23
Vijay Gupta vs. Renu Malhotra.
24
M/s S.K. Brothers Vs. Delhi Development Authority 2009 (3) ARBLR 509. 
25
§.2(1)(e), The Arbitration and Conciliation Act, 1996.
[III] THE AWARD DATED 2 MARCH 2018 IS LIABLE TO BE SET ASIDE UNDER
SECTION 34 OF THE ACT.

[A] THE AWARD IS CONTRARY TO THE PUBLIC POLICY OF THE COUNTRY

AND PATENTLY ILLEGAL AS HAVING BEEN PASSED AFTER THE EXPIRY OF
THE MANDATE.

It is humbly submitted before the Hon’ble Supreme Court that the award dated 22 March
2018 is liable to be set aside as it is contrary to the public policy of the country and patently
illegal as having been passed after the expiry of the mandate.

[A.1] The Arbitrator is terminated by efflux of time.

[A.1.1] As per section 29A (1) of The Arbitration and Conciliation Act, 1996 (hereinafter
referred to as ‘The Act’), the award shall be made within a period of twelve months from the
date the arbitral tribunal enters upon the reference. In the present case, the Arbitrator entered
reference on 28 July 2016xii. The award was delivered on 22 March 2018. Initial extension of
Six months was already taken under Sec 29A (3) and it was expired on 28 January 2018.
Hence the mandate of the Arbitrator terminated. Once the stipulated period is expired, and
since the mandate is over, the Arbitrator is terminated by efflux of time rendering functus
officio.xiii

In the case in hand, when already an extension of 6 months was taken, another extension
could have been taken by mutual consent of the parties. But since no such extension was
taken it expires the mandate of the arbitrator. The moment the time limit prescribed in the
agreement is over, the arbitrator has no jurisdiction unless a new agreement is arrived at
between the parties by which time limit provided in the original agreement is extendedxiv. 

[A.1.2] Absence of consent of both the parties.

It is pertinent to mention here that the arbitrator had not concluded the proceedings as had
been agreed to by the parties within the time fixed for doing so. The mandate of the arbitrator
was terminated only because of the fact that the arbitrator having failed to conclude his
proceedings within time did not warrant to be continued as an arbitrator in the absence of the
consent of both the partiesxv. In the present case, consent of both the parties was absent as
INCCL already objected to the mandate of the sole arbitrator stating that the mandate of the
arbitrator stands terminated unless extended by the court by way of a judicial order xvi. In
NBCC limited v JG Engineering private limited xvii it was held that, “Even after the expiry of
the time as mentioned above, the arbitrator did not make any effort to publish the award nor
was anything conveyed on behalf of the appellant to the respondent for extending the time of
the arbitrator to publish his award. It was a clear lapse on the part of both the arbitrators and
the appellant who was well aware that the mandate of the arbitrator had already expired and it
could only be extended by a mutual consent of the parties according to the arbitration
agreement.” Same was the situation in the case in hand where the other party i.e. Valentina
waited for the award to come in their favour and as soon as they got it in their favour they
filed the application for extension of time which should have been done by them earlier only
when they knew that INCCL had objected and the mandate of the arbitrator has expired. The
arbitrator too instead of asking the parties to seek an extension continued with the arbitral
proceedings unmindfully. Arbitrator should have voluntarily rendered his mandate functus
officio as in done by the learned arbitrator in the case of M/S Divyadev Developers Private
limited vs M/S G.S. Developers Private Limited. xviii In that case Learned counsel appearing for
the applicant submits that since the delay is not attributable to the learned Arbitrator and there
is also no objection to the parties in holding the arbitral proceedings before the learned
Arbitrator, who has been appointed by this Court and only because of non-submitting the
response for extension of time, the learned arbitrator has refused to proceed further in the
matter, therefore, the time be extended to complete the arbitral proceedings.

[A.1.3] Undue Delay by the Arbitrator

Owing to the complexity of the dispute the parties already took an additional extension of 6
months prior to the beginning of the case. Now the responsibility was on the arbitrator to
conclude the proceedings on the given time period. First of all, he failed to make an award on
the given time and took almost 2 more months after the expiry of his mandate which is
patently illegal ipso facto. Secondly, he neither directed the parties to seek an extension by
the way of judicial order and instead continued with the arbitration proceedings against the
consent of INCCL. The undue delay that has been caused by the arbitrator rendered his
mandate terminated as is written in the section 14 (1) (a) of the act. The last situation "failure
to act without undue delay" is an expiry provision according to which the mandate of the
Arbitrator shall terminate if for other reasons he fails to act without undue delayxix.  

[A.2] Award is patently illegal and Contrary to public policy.

As contended in the arguments raised above that since the award was made after the expiry of
the mandate of the arbitrator it is patently illegal as it is contrary to the section 14 (1) (b) and
section 29A (4) of the act. It is thus in direct contravention to public policy and liable to be
set aside under section 34 (2) (b) and section 34 (2A).

In ONGC v Saw pipesxx limited the court laid down the interpretation of the “Public Policy”
that read as under:

An award could be set aside if it is contrary to: -

(a) fundamental policy of Indian law; or

(b) the interest of India; or

(c) justice or morality, or

(d) in addition, if it is patently illegal.

This view point was further supported in the case of Oil & Natural Gas Corporation Limited
v Western Geco International Ltdxxi.

If the arbitral tribunal has not followed the mandatory procedure prescribed under the Act, it
would mean that it has acted beyond its jurisdiction and thereby the award would be patently
illegal which could be set aside under Section 34.xxii

Also as contended in the issue 2 that appointment of the arbitrator made by one court and
subsequent filing of application for the extension of the mandate in another court is sheer
violation of section 42 of the act and thus adds to the patent illegality of the award.

The High Court placed reliance on the Arbitration and Conciliation (Amendment) Bill, 2018
believing that legislator might bring International commercial Arbitration out of the purview
of section 2A. This itself is erroneous because it is still a bill and not an act and placing
reliance on it will be like placing reliance on presumption and bill might never turn into an
act. Also even if it did turn into an act then also it will be patently illegal as it still goes
against the consent of both the parties and also section 14 (1) (b).
So in the presence of the present arguments it clear that award was patently illegal and
contrary to public policy and is liable to be set aside as under section 34 of the act.
i
Moot proposition para 4
ii
Indian Contract Act , 1872
iii
Moot proposition para 2
iv
Clarifications question 2
v
State of Mysore v. Allum Karibasappa, (1974) 2 SCC 498
vi
Moot proposition para 2
vii
Moot proposition para 1
viii
R. Dalmia v. CIT, (1977) 2 SCC 467
ix
M/s. ABG Ports Limited v. M/s. PSA International Pte. Limited and Ors 2013 AIR CC 1318 (BOM)
x
Krishnan v. Krishnaveni, (1997) 4 SCC 241
xi
Larsen and Toubro Limited Scomi Engineering BHD vs. Mumbai Metropolitan Region Development Authority
2018(6)ArbLR174(SC)
xii
Moot Proposition, Para 22.
xiii
Bharat Oman Refineries Ltd v M/s. Mantech Consultants (2012) 3 Bom CR 754.
xiv
Bharat Oman Refineries Ltd v M/s. Mantech Consultants (2012) 3 Bom CR 754.
xv
NBCC limited v JG Engineering private limited [2010] 2 SCC 385.
xvi
Moot Proposition, para 23.
xvii
Ibid (n 4)
xviii
M/S Divyadev Developers Private limited vs M/S G.S. Developers Private Limited MP HC AC 41/2018
xix
Shyam Telecom Ltd. vs Arm Ltd, 2004 (3) ARBLR 146 Delhi
xx
ONGC v Saw pipes limited (2003) 5 SCC 705.
xxi
Oil & Natural Gas Corporation Limited v Western Geco International Ltd 2014 9 scc 263
xxii
Ibid (n 8)