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2007 DIGILAW 1978 (DEL)

Sarvesh Chopra Builders Pvt. v. Union of India

2007-12-06

SHIV NARAYAN DHINGRA

body2007
SHIV NARAYAN DHINGRA,J. 1. This petition has been filed by the petitioner under section 11(6) and section 14(1) of Arbitration and Conciliation Act with a prayer that this Court should appoint another sole arbitrator in place of the earlier Arbitrators appointed under the agreement, to decide the dispute and claims of the petitioner. The petitioner contended that the Arbitrators appointed under the agreement have failed to proceed in the matter for last more than one year which demonstrate that they have failed to perform their function and hence the present application. 2. A brief background of the case. The petitioner is a contractor who had undertaken a contract of civil construction. He raised certain disputes and invoked arbitration agreement on 20.10.1997 and sent notice to the respondent to appoint the arbitrators. The Arbitrators were appointed by the respondent and claims of the petitioner were referred to the Arbitrators. However, petitioner approached this Court vide a petition No.352/98 claiming that the only a part of the claim was referred to the Arbitrators and claim Nos.3,5,6 and 7 were not referred to the Arbitrators. Vide order dated 28.8.2000 this Court directed that claim Nos.3,5,6 and 7 raised by the petitioner be also referred to the Arbitrators. After the order of this Court, those claims were also referred to the Arbitrators. The petitioner had also filed another petition being AA-56/2004 alleging that respondent had failed to Act as per order, which was disposed of by this Court vide order dated 27.9.2004 A persual of this order shows that the respondent had issued a letter to the petitioner on 12.5.2004 itself whereby it conveyed three names to the petitioner out of which one was to be chosen by him. When the petitioner was confronted with this letter, counsel for the petitioner prayed that the petition be disposed of with liberty to the petitioner to convey his choice. The respondent thereafter filed a counter claim before the Arbitrators claiming liquidated damages. The petitioner filed an OMP before this Court, being OMP No.188/2005, claiming that liquidated damages were not permissible and the counter claim was not as per the conditions of the contract and therefore, Arbitrators should be told not to decide the counter claim. This petition was withdrawn by the petitioner on 24.5.2005, after arguing the matter at some length. Petitioner sought liberty to raise this issue before the Arbitrators themselves. This petition was withdrawn by the petitioner on 24.5.2005, after arguing the matter at some length. Petitioner sought liberty to raise this issue before the Arbitrators themselves. Now the petitioner has filed the present petition stating that the Arbitrators appointed by the respondent have not entered upon the reference and they have failed to adjudicate upon the disputes raised by the petitioner for the last one year and therefore, this Court should appoint a sole arbitrator to adjudicate upon the claim of the petitioner. 3. A perusal of facts right from 1998 till now would show that it is petitioner who had been rushing to the Court without any cause. Once he rushed to the Court that Arbitrators were not being appointed, while in fact the letter has been written to the petitioner long back asking him to chose one of his nominee, secondly he rushed to the Court that the counter claim filed by the respondent was not maintainable and should not be entertained by the Arbitrators. Later on he withdrew this petition since the petition was not maintainable and this issue should have been raised before the Arbitrators. However, such court proceedings filed by the petitioner wasted a lot of time. The Arbitrators appointed by the respondent could not act and adjudicate the claim because of the pendency of petitions in the Court. The petitioners claim that Arbitrators had not entered upon reference is belied by his own pleading that the Arbitrators had entertained the counter claim filed by the respondent. If no reference had been entered into, the counter claim could not have been entertained. 4. It is well settled law that the parties are bound by the arbitration agreement. Who shall be the Arbitrators, is also the subject matter of agreement between he parties. It is not possible for one party to arbitration agreement to resile from the agreement and say that the matter be not adjudicated by the Arbitrators as provided in the agreement and another sole arbitrator should be appointed. The Court cannot without a reasonable cause replace an Arbitrator whom the parties have chosen under the terms of the contract. The Court can only interfere where there is legal misconduct of the Arbitrator or Arbitrator appointed was not competent and disqualified in terms of the agreement. The Court cannot without a reasonable cause replace an Arbitrator whom the parties have chosen under the terms of the contract. The Court can only interfere where there is legal misconduct of the Arbitrator or Arbitrator appointed was not competent and disqualified in terms of the agreement. The Court can appoint an Arbitrator different from one as stated in the agreement in those cases where the party for a valid reason do not agree to appoint the person named in the contract as Arbitrator. The Court would not be justified to appoint a different person as sole arbitrator unless the Arbitrators named in the arbitration agreement had refused to act and adjudicate the claim or he had neglected to enter upon the reference. 5. In the present case the Arbitrators were not allowed to act upon by filing one or another petition by the petitioner in the Court. The petition is not maintainable and is hereby dismissed. However, the Arbitrators appointed under the agreement are directed to expedite and adjudicate upon the claim and pass an award, as far as possible, within four months of communication of this order to them.