JUDGMENT : A.K. Ganguly, C.J. - This Writ Petition has been filed challenging an Order Dated 28th February, 2004, passed in ARBP No. 34 of 2002 u/s 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'Act 1996') whereby Hon'ble Chief Justice was pleased to dismiss the said petition. At that time anyone who was aggrieved by an order u/s 11 of the said Act 1996 could file a Writ Petition under Article 226 of the Constitution of India in view of the decision of the Hon'ble Supreme Court in Konkon Railway Corporation and Anr. v. Rani Construction Pvt. Ltd. reported in AIR 2002 BC 778. 2. In the impugned order, which was passed by the Learned Judge u/s 11 of the Act 1996 the facts which have been noted are that the Petitioner dropped a tender for the work of "Construction of Left Afflux Bundh FROM Rd 630-M to 1770-M of Rengali Irrigation Sub-Project W.R.C.P. Package No. 9". The tender of the Petitioner was accepted and work order was issued in favour of the Petitioner. The Agreement was duly executed and signed by the parties. As disputes arose between the parties, the Petitioner by its letter dated 02.09.2002 requested the Opposite Party to appoint an Arbitrator for referring the dispute for adjudication by the Arbitrator. In the said letter, Petitioner suggested some names and prayed for appointment of one of them. Despite receipt of the said letter by the Opposite Party, no Arbitrator was appointed and when more than one month elapsed, the High Court was approached with Section 11 Petition and on which the impugned order was passed. 3. The relevant clauses for Arbitration in this case are as follows: 25. Procedure for Disputes. 25.1 The Adjudicator shall give a decision in writing within 28 days of receipt of a notification of a dispute. 25.2 The Adjudicator shall be paid daily at the rate specified in the Contract Data together with reimbursable expenses of the types specified in the Contract Data and the cost shall be divided equally between the Employer and the Contractor, whatever decision is reached by the Adjudicator. Either party may refer a decision of the Adjudicator to an Arbitrator within 28 days of the Adjudicator's written decision. If neither party refers the dispute to arbitration within the above 28 days, the Adjudicator's decision will be final and binding.
Either party may refer a decision of the Adjudicator to an Arbitrator within 28 days of the Adjudicator's written decision. If neither party refers the dispute to arbitration within the above 28 days, the Adjudicator's decision will be final and binding. 25.3 The Arbitration shall be conducted in accordance with the arbitration procedure published by the institution named and in the place shown in the Contract Data. 4. Relevant Contract Data referred to in the aforesaid clause is as follows: Institution whose arbitration procedures shall be used: ORISSA ARBITRATION TRIBUNAL Fees and types reimbursable expenses to be paid to the Adjudicator Rs. 1,000/- per day + boarding & travel expenses. Appointing Authority for the Adjudicator-Chairman, Institute of Engineers, Orissa Centre, Bhubaneswar. Arbitration will take place in accordance with Indian Arbitration & Conciliation Act, 1996 in its application to Sate of Orissa statutory Amendment thereof. (ORISSA ARBITRATION TRIBUNAL ACT, 1979). 5. It is not in dispute that in accordance with the aforesaid provision and agreement, the dispute between the parties was referred to the Adjudicator within the stipulated period. Thereafter, the Adjudicator on 22nd July, 2002 gave his decision and the same was communicated to the Executive Engineer, who received the same on 31.07.2002. Against the said decision the Opposite Party raised a dispute purportedly in terms of the Arbitration clause. The case of the Opposite Party is that the Arbitration shall be conducted in accordance with the Arbitration procedure shown in the Contract Data. The further case of the Opposite Party is that the Arbitration will be under Orissa Arbitration Act, 1979. Therefore, the Court has no jurisdiction u/s 11 of the said Act to appoint an Arbitrator. It appears from the counter affidavit filed by the Opposite Party in the proceedings u/s 11 that on 19.8.2002 the Opposite Party referred the dispute to the Orissa Arbitration Tribunal for adjudication as the Opposite Party was aggrieved by the decision of the Adjudicator. 6. In the aforesaid facts and circumstances of the case, the question which fell for decision in the Section 11 petition was whether Arbitration Proceedings can be held under Orissa Arbitration Tribunal Act, 1979. 7. In the impugned Judgment it was held that Orissa Arbitration Tribunal can proceed despite the coming into effect of the new Act of 1996 and the repeal of the previous Arbitration Act, 1940 by the new Act.
7. In the impugned Judgment it was held that Orissa Arbitration Tribunal can proceed despite the coming into effect of the new Act of 1996 and the repeal of the previous Arbitration Act, 1940 by the new Act. In the impugned Judgment it was held that reference of Orissa Arbitration Act, 1979 is a typographical error and it should be Orissa Arbitration Tribunal Rules. It was further held that those rules are framed under the Arbitration Act of 1940. After coming to the aforesaid finding, it was further held in the impugned Judgment that on a harmonious construction of the relevant statutes there is no inconsistency between different parts of the Arbitration clause and Orissa Arbitration Tribunal Rules and it was further held that no case has been made out to the effect that Arbitration Tribunal cannot proceed with the Arbitration and as such the Section 11 petition was dismissed and it was directed that the Orissa Arbitration Tribunal can proceed with the matter. 8. In coming to the said finding, the Court held that the expression 'an Arbitrator' would also mean the plural in view of the provisions u/s 13(2) of the General Clauses Act. 9. Assailing the said Judgment, the Learned Counsel for the Petitioner had raised various contentions. The first contention has been that the Agreement which contains the arbitration clause is dated 14.07.1997 which is after the Act of 1996 came into force on 25.1.1996. The said Act of 1996 contains provisions for repeal and savings u/s 85 thereof. Section 85 is set out below: 85. Repeal and savings.- (1) The Arbitration (Protocol and Convention) Act, 1937 (6 of 1937), the Arbitration Act, 1940 (10 of 1940) and the Foreign Awards (Recognition and Enforcement) Act, 1961 (45 to 1961) are hereby repealed. (2) Notwithstanding such repeal,- (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force; (b) all rules made and notifications published, under the said enactments shall, to the extent to which they are not repugnant to this Act, be deemed respectively to have been made or issued under this Act.
From a perusal of Section 85(2)(a), it is clear that notwithstanding such repeal, the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before the said Act came into force unless otherwise agreed by the parties. But the 1996 Act shall apply in relation to arbitration proceedings which commenced on or after this Act came into force. 10. In the instant case, the Arbitration Proceedings can only commence after 25.01.1996, inasmuch as the agreement, which contained the arbitration clause, is dated 14.07.1997. 11. In view of this clear factual position, the contentions of the Petitioner that the arbitration proceeding can only be held under the Act 1996 is correct in view of the provision in Section 85(2)(a) of the Act of 1996. 12. Somewhat similar question was considered by the Hon'ble Supreme Court in Thyssen Stahlunion Gmbh Vs. Steel Authority of India Ltd.. Construing Section 85(2)(a) of the 1996 Act, the Hon'ble Supreme Court held in Thyssen Stahlunion (supra): 44. Parties can agree to the applicability of the new Act even before the new Act comes into force and when the old Act is still holding the field. There is nothing in the language of Section 85(2)(a) which bars the parties from so agreeing. This is however, a bar that they cannot agree to the applicability of the old Act after the new Act has come into force when arbitral proceedings under the old Act have not commenced though the arbitral agreement was under the old Act. Here the arbitration agreement as pointed out above was not under the old Act. It was entered into much after the new 1996 Act came into force. 13. Following the ratio in Thyssen Stahlunion (supra), this Court held in Bhageeratha Engineering Ltd. v. State of Orissa and Ors. reported in 2007 (Supp-ll) OLR 615, that arbitration proceeding under an arbitration agreement entered into after coming into effect of 1996 Act cannot be held under Orissa Tribunal Act, 1979. The Court also held that after the 1996 Act, the statutory provision for arbitration contained in 1996 Act will govern the parties if no arbitration proceeding commenced under the old Act of 1940. 14.
The Court also held that after the 1996 Act, the statutory provision for arbitration contained in 1996 Act will govern the parties if no arbitration proceeding commenced under the old Act of 1940. 14. Apart from that, this Court finds that in the impugned Judgment it was held, without any case being made out to that effect, that there was a typographical error and that 'Orissa Arbitration Tribunal Act' should be read as 'Orissa Arbitration Tribunal Rules'. No such case was made out by the Opposite Party in its counter affidavit. It was also held in the impugned Judgment that those rules are framed under Arbitration Act, 1940. (See paragraph 4 of the Judgment). Unfortunately, this is clearly an erroneous finding. The said Rules do not show that the same were framed under Act, 1940. The relevant provisions of that Rule read as under: 1.(1) These Rules may be called the Arbitration Tribunal Rules, 1979. (2) They shall come into force at once. 2. These rules shall apply to all disputes arising out of Works Supply Contracts relating to various Public Works Department/Corporation/Public Sector undertakings, Improvement Trusts etc. as well as other contracts with arbitration clauses, entered into by other Departments of the State Government after commencement of these Rules: Provided however that the disputes arising after the commencement of these Rules pertaining to contracts entered into prior to such date may also be referred to the Tribunal if both parties agree for such reference. Those Rules are just administrative instructions and not statutory Rules. 15. Learned Counsel for the Petitioner has relied on three Judgments of the Supreme Court rendered in the case of SVG Molasses Co. B.V. v. Mysore Mercantile Co. Ltd. and Ors. reported in 2006 Arb.LR 1, in the case of C.M.C. Ltd. v. Unit Trust of India reported in 2007 (1) Arb. LR 392, and the other is in the case of Delta Mechcons (India) Ltd. v. Marubeni Corporation reported in 2007 (2) Arb. LR 288. Referring to those three Judgments, Learned Counsel for the Petitioner urged that in the instant case in the Arbitration Agreement it is clearly provided that "Arbitration has to be held before an Arbitrator" whereas the Arbitration procedure before the Orissa Arbitration Tribunal is before a body of Arbitrators. This is not permissible. The number of Arbitrators under the agreement cannot be altered by any Court.
This is not permissible. The number of Arbitrators under the agreement cannot be altered by any Court. Learned Counsel relying on the ratio in the aforesaid Judgments urged that there is a clear distinction between the procedure of Arbitration and the number of Arbitrators to be appointed by the parties by referring to the aforesaid Judgments it was argued that the procedure of Arbitration has nothing to do with the number of Arbitrators which has been filed in the agreement between the parties. In case, where a number has been filed, it is mandatory and the party autonomy must be respected and the Court cannot bring about a change in the agreement between the parties. 16. In the impugned Judgment, it has been held singular will include plural under General Clauses Act and therefore arbitration before a number of arbitrators before Orissa Arbitration Tribunal is quite in order. This finding is clearly contrary to the ratio of the aforesaid Judgments of the Supreme Court. Apart from that in the impugned Judgment arbitration before a number of arbitrators has been justified by referring to Section 13(2) of the General Clauses Act. (See paragraph 15 of the Judgment). Arbitration agreement is not a legislative enactment and cannot be interpreted on the principles of General Clauses Act which apply to construction of Central Acts and Regulations as is clear from Section 13 of the Act itself. It does not apply to an agreement between the parties. So this interpretation of arbitration agreement with reference to General Clauses Act is, with great respect, not tenable and cannot be accepted. 17. Learned Counsel for the Opposite Party has argued that in respect of Orissa Arbitration Tribunal Act, the Hon'ble Supreme Court has taken a view that it still exists. In support of such contention the Learned Counsel referred to a Judgment of the Hon'ble Apex Court in the case of Utkal Galvanizer Ltd. v. Orissa Hydro Power Corporation Ltd. and Ors. in Civil appeal No. 4576/2007. The Hon'ble Supreme Court in that case on the basis of concession by the parties held that the matter may be referred to the Orissa Arbitration Tribunal for adjudication.
in Civil appeal No. 4576/2007. The Hon'ble Supreme Court in that case on the basis of concession by the parties held that the matter may be referred to the Orissa Arbitration Tribunal for adjudication. In coming to the said finding, the Learned Judges of the Hon'ble Apex Court recorded that the Respondents has not raised any objection to the said course being taken and the Learned Judges further recorded that the Appellant agreed to deposit the sum determined according to the table given in Clause-3.39 (f) of the Contract. After recording the aforesaid concession and consent by the parties, Learned Judges held "such being the position and in view of the stand taken by the parties before us and considering the fact that the Orissa Arbitration Tribunal, Orissa is in existence and is ready to decide the matter, if referred to them, we dispose of the appeal by giving direction to go before the Tribunal". When the Judgment was produced before us, this Court has called for the records in the case of Utkal Galvanizer Ltd. (supra) and from the records it appeared that in that case the agreement between the parties was entered into on 25.11.1994. Since the agreement in that case was entered into prior to coming into effect of the said Act 1996 Arbitration proceeding obviously also commenced in 1940 Act. In such a situation the Orissa Arbitration Tribunal certainly exists so far as the decision in Utkal Galvanizer Ltd. (supra) is concerned. So the decision of Hon'ble Apex Court in Utkal Galvanizer is on totally different facts. It has no application to the facts of the present case. 18. For the reasons aforesaid, this Court cannot uphold the Judgment and Order Dated 28th February, 2004, which is under challenge in this case whereby the Section 11 petition filed by the Petitioner has been dismissed. This Court holds in the facts and circumstances of the case that the Petitioner's application u/s 11 is maintainable and the Judgment under appeal is therefore set aside. The petition filed u/s 11 of the said Act, is restored and may be placed before the appropriate Bench two weeks hence. This Writ Petition therefore succeeds. No costs. B.N. Mahapatra, J. 19. I agree. Final Result : Allowed