Amarvati Infrastructure Projects Pvt. Ltd. v. Punjab State Electricity Board
2009-10-30
T.S.THAKUR
body2009
DigiLaw.ai
Judgment T.S.Thakur, J. 1. The existence of an arbitration clause in the agreement executed between the parties is not in dispute. It is also not in dispute that the petitioner had made a proper request for reference of the disputes between the parties to an Arbitrator for adjudication. Failure of the respondent to nominate an Arbitrator left no alternative for the petitioner except to file the present application under Section 11 (6) of the Arbitration & Conciliation Act, 1996 (for short the Act). It was Only after the filing of this petition on 7.2.2007 that the respondents nominate Shri B.S. Sabharwal, Chief Engineer of respondent-Punjab State Electricity Board as an Arbitrator on 12.03.2007. 2. Mr. Rana. learned counsel for the petitioner argued that the appointment made by the respondent was nonest in the eyes of law in the light of the decision of the Supreme Court in Datar Switchgears Ltd. v. Tata Finance Ltd. and another 2001(1) RCR(Ovil) 267 : 2000(3) Arb. L.R. 447 (S.C.). The Court has in that decision after examining the issue in detail declared that while an appointment can be made beyond the period of 30 days from the date of demand for an order appointing an Arbitrator, the power of such appointment would stand forfeited with effect from the date an application under Section 11 (6) of the Act is filed by one of the parties to the dispute. The following regard apposite :- "19. So far as cases falling under Section 11(6) are concerned- such as the one before us-no time limit has been prescribed under the Act, whereas a period of 30 days has been prescribed under Section 11(4) and Section 11 (5) of the Act. In our view, therefore, so far as Section 11(6) is concerned, if one party demands the opposite party to appoint an Arbitrator and the opposite party does not make an appointment within 30 days of the demand, the right to appointment does not get automatically for feited after expiry of 30 days. If the opposite party makes an appointment even after 30 days of the demand, but before the first party has moved the Court under Section 11, that would be suffiecient.
If the opposite party makes an appointment even after 30 days of the demand, but before the first party has moved the Court under Section 11, that would be suffiecient. In other words, in cases arising unaet section 11(6), if the opposite party has not made an appointment within 30 days of demand, the right to make appointment is not forfeited but continues, but an appointment has to be made before the former files application under Section 11 seeking appointment of an Arbitrator. Only then the right of the opposite party ceases. We do not, therefore, agree with the observation in the above judgments that if the appointment is not made within 30 days of demand, the right to appoint an Arbitrator Under Section 11(6) is forfeited." To the same effect is the decision of a Division Bench of Delhi High Court in Delkon (India) Pvt. Ltd v. The General Manager, Bharat Heavy Electricals Ltd. 2005(2) Arb. L.R. 272 (Delhi) (D.B.). 3. I have in the light of the above no difficulty in holding that the appointment made by the respondent after the filing of this petition cannot he recognized as valid in law. That would necessarily take me to the question as to who should be the Arbitrator for adjudication of the disputes between the parties. Mr. Rana prays for the appointment of a former Judge of this Court as an Arbitrator to ensure that the arbitration proceedings are conducted in a fair and objective manner and determination of the issues is along well settled legal principles. Mr. Mattewal has no objection to the appointment of a legally trained mind as an Arbitrator as the questions that arise for consideration do not have any technical angles or ramifications. In the result. I allow this petition and appoint Justice N.K. Aggarwal, former judge of this Court as the sole Arbitrator to adjudicate upon the disputes between the parties. The Arbitrator shall be entitled to a fee of Rs. 11,000/- per hearing subject to a maximum of Rs. 2,00,000/- (Rs. Two lacs only). The fee shall be paid by the parties in the manner and at the intervals directed by the Arbitrator. Parties are directed to appear before the Arbitrator for directions on 27.11.2009 at 4.00 P.M.