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May 08, 2019

Termination of Arbitration Can’t Be Recalled Under Section 32 Of Arbitration And Conciliation Act: Supreme Court


Supreme-Court

Termination of arbitration proceedings under Section 32 of the Arbitration & Conciliation Act cannot be recalled, the Supreme Court has observed.

The apex court’s observation came in the Sai Babu versus Clariya Steels Pvt Ltd case, where the sole arbitrator terminated proceedings under Section 32 (2) (c) of the act mentioned above on the ground that continuation of the proceedings have become unnecessary or is impossible.

“This court has clearly held that no recall application would, therefore, lie in cases covered by Section 32(3),” the apex court observed.

However, later on, the sole arbitrator allowed an application by one of the parties seeking recall of the order terminating the proceedings.

Earlier, the Karnataka High Court had dismissed the challenge against any such ‘recall’ by the arbitrator.

Hearing the appeal by appellant Sai Babu, the Supreme Court bench comprising Justice Rohinton Fali Nariman and Justice Vineet Saran referred to a previous judgment in the case of ‘SREI Infrastructure Finance Limited versus Tuff Drilling Private Limited’.

“It is clear, therefore, that a distinction was made by this Court between the mandate terminating under Section 32 and proceedings coming to an end under Section 25. This Court has clearly held that no recall application would, therefore, lie in cases covered by Section 32(3),” the Supreme Court bench observed.

In the case of ‘SREI Infrastructure Finance Limited versus Tuff Drilling Private Limited’, the issue involved was if an arbitral tribunal which had terminated proceedings under Section 25(a) due to non- filing of claim by the claimant had any jurisdiction to consider an application to recall an order terminating proceedings, if sufficient cause was shown by the claimant.

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