Relevant Extracts :
The First Respondent had filed a claim petition against the Petitioners before the arbitrator seeking a sum of over Rs.57 lakhs stated to be due under a hire-purchase agreement. The Petitioners raised a specific plea before the arbitrator that the claim petition was not maintainable as the first Petitioner had been declared a sick industrial company by the BIFR and that section 22 of SICA placed an embargo on the continuation of the arbitral proceedings against them.
The arbitrator dismissed the petition holding that section 22 of SICA is inapplicable to the proceedings initiated under the Arbitration & Conciliation Act, 1996.
In a petition u/s 34 of the 1996 Act, the Petitioners sought to set aside the order of the arbitrator. The Court, dismissing the petition, held that Section 22 of SICA is not applicable to the arbitration proceedings initiated under the 1996 Act. The arbitrator had correctly held that the petition u/s.22 of the SICA was not maintainable.
