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2010 DIGILAW 431 (KAR)

VANIVILAS CO-OPERATIVE SUGAR FACTORY LIMITED, HIRIYUR, CHITRADURGA DISTRICT v. BT AND FC PRIVATE LIMITED, BANGALORE

2010-04-01

AJIT J.GUNJAL

body2010
ORDER This is the third civil miscellaneous petition filed by the petitioner. The petitioner was before this Court in two CMPs earlier i.e., C.M.P. No. 75 of 2006 and C.M.P. No. 113 of 2008. Incidentally, it is to be noticed that there is no dispute between the parties that there is an arbitral clause and if any dispute arises between the petitioner and the respondent, the same is required to be resolved by an Arbitrator. 2. In the first instance, CMP No. 75 of 2006 was filed seeking appointment of an Arbitrator. This Court disposed of the said CMP on 2nd February, 2007 appointing Mr. Subba Rao, as well as Mr. A. Mohan Ram as Arbitrators and they in turn shall appoint an umpire. It appears Mr. Subba Rao was not very keen to participate in the Arbitral proceedings having regard to certain Family Commitment. Hence, withdrew from the arbitral proceedings. The petitioner was once again before this Court in CMP No. 113 of 2008. This Court accepted the petition and instead of Mr. Subba Rao, appointed one Mr. N.L. Rathod as nominee of the respondents as Arbitrator along with Mr. Mohan Ram, Retired District Judge. It appears the proceedings commenced from the date of the order i.e., 9-6-2009. 3. When the matter was before the Arbitrator on 15-9-2009, one of the Arbitrator sought time to give his opinion as to who should be the third Arbitrator. Thereafter, it appears the matter was adjourned and on both the occasions. Mr. Rathod could not be present. Thereafter, the matter was listed on 6-10-2009 before the Arbitrators. But however, the petitioner as well as the respondent submit that the arbitral proceedings have come to a standstill. Hence, in these circumstances, the present petition is filed. 4. Mr. H.N. Shashidhara, learned Counsel appearing for the petitioner submits that having regard to the fact that the Arbitrators either nominated by the petitioner or by the respondent are not agreeing upon appointing a third Arbitrator its has become necessary for this Court to exercise its powers under Section 11(6) of the Arbitration and Conciliation Act, 1996. Hence, he submits that the two Arbitrators be appointed so that they in turn can appoint a third Arbitrator. 5. Mr. Lomesh Kiran N., learned Counsel appearing for the respondent submits that Mr. Rathod, who was their nominee is willing now to participate in the arbitral proceedings. Hence, he submits that the two Arbitrators be appointed so that they in turn can appoint a third Arbitrator. 5. Mr. Lomesh Kiran N., learned Counsel appearing for the respondent submits that Mr. Rathod, who was their nominee is willing now to participate in the arbitral proceedings. Hence, it is not necessary for the Court to appoint new Arbitrators. He further submits that the substitution of the Arbitrators does not come within the ambit of Section 14 of the Act. 6. I have perused the papers. Apparently, there are certain serious reservations by the petitioner in continuing Mr. Rathod as Arbitrator and so also the respondent in respect of Mr. Mohan Ram continuing as an Arbitrator. It is to be noticed that the statement of objections would disclose that Mr. Mohan Ram the nominee of the petitioner was insisting on being the umpire in the case contrary to the Arbitration agreement and practice. Thereafter, it appears Mr. Rathod had stated that he had not received further notice of the arbitration proceedings that were allegedly held between 22-9-2009 and 6-10-2009. Be that as it may, the fact remains that no useful purpose would be served by continuing the same Arbitrators to resolve the dispute between the petitioner and the respondent. Insofar as Section 14 of the Act is concerned, it is to be noticed that it would speak about failure or disability of the Arbitrators to act and conclude the proceedings. I am of view that the present proceedings would fall under sub-section (2) of Section 14 of the Act inasmuch as the Arbitral proceedings have come to a standstill having regard to the non-co-operation of both the Arbitrators. 7. Insofar as whether the matter can be referred to an arbitral proceedings is concerned, that need not be gone into in the present proceedings again inasmuch as in the earlier two proceedings, both the petitioner as well as the respondent consented for appointing an Arbitrator having regard to the Arbitral clause. Hence, the following order: (a) Petitioner is allowed. (b) Mr. Indra Kumar, Srinivas, No. 514, 8th Cross, J.P. Nagar, III Phase, Bangalore 78 and Mr. Kukkaje Ramakrishna Bhat, Retired District and Sessions Judge, I Main, Judicial Officers Layout, Sanjayanagar, Bangalore 94 are appointed as Arbitrator. (c) The Arbitrators shall enter upon reference and appoint a third Arbitrator to resolve the dispute inter se between the petitioner and the respondent. Indra Kumar, Srinivas, No. 514, 8th Cross, J.P. Nagar, III Phase, Bangalore 78 and Mr. Kukkaje Ramakrishna Bhat, Retired District and Sessions Judge, I Main, Judicial Officers Layout, Sanjayanagar, Bangalore 94 are appointed as Arbitrator. (c) The Arbitrators shall enter upon reference and appoint a third Arbitrator to resolve the dispute inter se between the petitioner and the respondent. (d) Registry, to communicate this order to the Arbitrators.