STEEL AUTHORITY OF INDIA v. RANA CONSTRUCTION, PARADEEP
2000-07-17
P.K.MISRA
body2000
DigiLaw.ai
ORDER Steel Authority of India has filed the revision challenging the order passed by the Civil Judge (Senior Division), Jagatsinghpur, in Misc. Case No. 153 of 1997. The aforesaid Misc. Case was registered on the basis of an application filed by present opposite party No. 1 purporting to be under Section 10 of the Arbitration Act, 1940. It appears that prior to filing of the said application, present opposite party No. 1 had filed Title Suit No. 95 of 1996 wherein objection was raised on behalf of the present petitioner regarding maintainability of the suit on the footing that an arbitration clause was there to settle the dispute between the parties and on the basis of such stand taken by the present petitioner, the suit was dismissed obviously on the assumption that it is open to the parties to pursue their remedy relating to arbitration as contemplated in Clause-75 of the contract. The relevant portion of Clause 75 of the contract is extracted hereunder : "75(I) If at any time any question, dispute or difference shall arise between the employer and the contractor, either party shall as soon as reasonably practicable give to the other notice in writing of the existence of such question, dispute or difference specifying its nature and the point at issue and the same shall be referred to the arbitration of three competent disinterested Arbitrators, one of whom shall be chosen by each of the parties (Employer and Contractor) and the third by the two so chose. ........." A perusal of the aforesaid Contract leaves no room to doubt that there is an arbitration clause whereunder each party is to nominate his own Arbitrator and the two Arbitrators are to nominate the third Arbitrator who has to act as Chairman of the Arbitration Committee. The learned counsel for the petitioner contended that the present Misc. Case No. 153 of 1997 was filed at a stage when the Arbitration and Conciliation Act, 1996, had already come into force and as such the application before the Civil Judge (Senior Division) was not maintainable. Learned counsel for the petitioner further contended that since the order is without jurisdiction, the order should be quashed.
Case No. 153 of 1997 was filed at a stage when the Arbitration and Conciliation Act, 1996, had already come into force and as such the application before the Civil Judge (Senior Division) was not maintainable. Learned counsel for the petitioner further contended that since the order is without jurisdiction, the order should be quashed. In course of hearing of the present revision, time was allowed to the present petitioner to obtain instruction as to whether the petitioner is willing to nominate its own Arbitrator in accordance with Clause-75 so that the matter can be ultimately decided by the Arbitration Panel as per Clause-75. Learned counsel for the petitioner states that in spite of letters, he has not been able to receive full instruction in the matter. There is no doubt that the order passed by the Civil Judge, (Senior Division) is without jurisdiction, as by then the new Arbitration and Conciliation Act had come into force. Moreover, the arbitration clause itself contemplates appointment of three Arbitrators, one to be nominated by each party and the two Arbitrators on their own to nominate the third Arbitrator. The Civil Judge (Senior Division) has appointed two Arbitrators from out of the panel submitted by present opposite party No. 1 and nothing has been indicated about the appointment of third Arbitrator. The order passed by the Civil Judge (Senior Division), therefore, cannot be sustained. However, quashing of the said order does not end the matter. The learned counsel for opposite party No. 1 submitted that in order to avoid further delay in the matter, steps may now be taken to appoint an arbitral panel in accordance with the provision under Section 11 of the Arbitration and Conciliation Act, 1996. The learned counsel has further submitted that there is no embargo on me in embarking upon such a course, as I have been nominated by the Hon'ble Chief Justice as the designated authority to deal with requests for appointment of Arbitrators under Section 11 of the Arbitration and Conciliation Act. The above submissions are reasonable particularly in the facts and circumstances of the present case. A Court exercising jurisdiction under Section 115, Code of Civil Procedure, is to do substantial justice. There is no dispute that there is an arbitration clause and it is apparent that the disputes have arisen.
The above submissions are reasonable particularly in the facts and circumstances of the present case. A Court exercising jurisdiction under Section 115, Code of Civil Procedure, is to do substantial justice. There is no dispute that there is an arbitration clause and it is apparent that the disputes have arisen. It is now apparent that resort must be taken to the arbitration clause as envisaged in Clause 75 of the Contract. As a matter of fact, in the earlier suit, the above was the stand of the present petitioner. Therefore, petitioner cannot have any grievance if the submission made by it in the earlier suit is now accepted and acted upon. Since the Contract contemplates nomination of one Arbitrator by each of the parties and selection of the third Arbitrator by such nominated Arbitrators, it is necessary that similar steps should be followed. Accordingly, while setting aside the order passed by the trial Court. I call upon the petitioner and opposite party No. 1 to nominate their respective Arbitrators within a period of six weeks from today and the two Arbitrators within a period of six weeks from today and the two Arbitrators so nominated by the parties shall thereafter nominate the third Arbitrator, who has to act as Chairman of the Arbitral Committee in accordance with Clause-75 of the Contract. In course of hearing, Mr. Ghose, learned counsel for the petitioner, had submitted that no notice had been issued to the present petitioner, regarding appointment of an Arbitrator. There is no material in support of such a contention, particularly when the impugned order does not show that such a stand was ever taken before the trial Court. As a matter of fact, the submission made by the learned counsel, who was then appearing for the petitioner in the Court below indicates that the learned counsel had no objection for appointment of the Arbitrators. Be that as it may, in course of hearing of this Civil Revision, the counsel for opposite party No. 1 produced a copy of letter dated 31.3.1997 already filed before the trial Court which indicates that after disposal of the earlier suit as not maintainable, notice had been issued for the purpose of appointment of Arbitrator. Moreover, since opportunity is now given to both parties to nominate their own Arbitrators as contemplated in Clause-75 the petitioner would not at all be prejudicially affected.
Moreover, since opportunity is now given to both parties to nominate their own Arbitrators as contemplated in Clause-75 the petitioner would not at all be prejudicially affected. The Civil Revision is accordingly disposed of subject to the aforesaid direction. There will be no order as to costs. Civil Revision disposed of.