G. M. Southern Railway, Chennai v. Johny J. Vilangadan
2007-12-07
A.K.MATHUR, MARKANDEY KATJU
body2007
DigiLaw.ai
ORDER : 1. Leave granted. 2. In this case Justice R. Bhaskaran, former Judge of the High Court of Kerala was appointed as Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996. 3. An agreement between the applicant and the Divisional Railway Manager (Works), Trivandrum, Southern Railway was entered into on 28th June, 1995. 30th November, 2005 was stipulated as the date for completion of the work. On 9th June, 2004, the applicant notified the final claims and on 11th June, 2004, the respondents received final claim notice (Exhibit A-2). Despite receipt of the notice, the respondents failed to settle the claims. On 4th October, 2004 the applicant submitted demand for arbitration. On 5th October, 2004, the 1st respondent received demand for arbitration (Exhibit A-3), but despite the lapse of more than 30 days of statutory period from the receipt of Exhibit A-3, the 1st respondent did not appoint an Arbitrator. On 3rd April, 2006, the applicant sent a letter by registered post with acknowledgment due but without result. Therefore, the respondent approached the High Court for appointment of the Arbitrator. 4. A Counter Affidavit was filed on behalf of the Railways and in that the Railways nominated Shri K. Masthan Rao, Deputy Chief Engineer, Constructions, Southern Railway, Ernakulam as Arbitrator. Despite this, the High Court appointed Justice R. Bhaskaran as Arbitrator to go into the matter. 5. We fail to understand how can a Judge be appointed dehors the law of this Court. It was held by this Court in the case of ACE Pipeline Contracts (P) Ltd. versus Bharat Petroleum Corpn. Ltd. reported in 2007 (5) SCC 304 that "the departmental lethargy in making appointment of arbitrators in terms of the arbitration clause is well known. Therefore, mandamus can be issued by the Courts in exercise of powers under Section 11(6) of the Act but the demand should be in the event of failure by the authorities to appoint arbitrators within a reasonable time. Courts are not powerless to issue mandamus to the authorities to appoint arbitrators as far as possible as per the arbitration clause. But in large number of cases if it is found that it would not be conducive in the interest of parties or for any other reasons to be recorded in writing, the choice can go beyond the designated persons or institutions in appropriate cases.
But in large number of cases if it is found that it would not be conducive in the interest of parties or for any other reasons to be recorded in writing, the choice can go beyond the designated persons or institutions in appropriate cases. But court should normally adhere to the terms of arbitration clause and appoint the arbitrator/arbitrators named therein except in exceptional cases for reasons to be recorded or where both parties agree for common name." 6. Therefore, in view of the aforesaid decision, the view taken by the learned Single Judge cannot be sustained. The same is set aside and the Arbitrator appointed by the Railways shall proceed in the matter and dispose of the whole matter preferably within a period of six months from today. 7. The appeal is accordingly, allowed.