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2010 DIGILAW 5465 (MAD)

The State Of Tamil Nadu Rep By Its Secretary Public Works Department Secretariat Chennai v. A. P. Rajappan

2010-12-09

B.RAJENDRAN, D.MURUGESAN

body2010
Judgment :- 1. This appeal is filed at the instance of the Secretary, Public Works Department questioning the judgment and decree of the Principal District Judge, Coimbatore in O.P.No.216 of 2000 confirming the award of the sole arbitrator dated 23-12-2010. By that award the respondents claim was considered and ultimately the Arbitrator had passed the following award: "In the circumstances, an award is passed in favour of the claimant for Rs.26,68,713/- (Rupees twenty six lakhs sixty eight thousand and seven hundred and thirteen only) against Rs.172 lakhs (approximately). The whole awarded amount shall be paid by the respondents by adjusting contract price within 60 days from today and no interest would be payable for the whole awarded amounts during the grace period of 2 months granted for effecting payment. In the event of default in making the payment within the grace period allowed the whole awarded amount till date shall carry interest at 18% annum till date of payment, or realization. COSTS The parties were directed to pay Rs.10,000/- each towards costs incidental, clerical miscellaneous expenses in arbitration proceedings dated 20-06-2000. The claimant paid Rs.10,000/- by demand draft dated 28-07-2000 sent to the undersigned. The respondents have not paid the arbitration costs as directed. The costs, towards clerical miscellaneous incidental expenses are fixed at Rs.10,000/-. The arbitration fee is fixed at Rs.1,00,000/-which should be shared equally by the parties. The claimant shall pay Rs.55,000/- and the respondents shall pay Rs.65,000/- since they have not paid Rs.10,000/- directed on 20-06-2000. The payments directed shall be made within a week of receipt of copy of the Award." 2. The appeal is questioned on the ground of the procedure contemplated under Clause Nos.24 and 25 of the arbitration agreement had not been followed. Clause Nos.24 and 25 of the Arbitration agreement runs thus: "24. Disputes 24.1 If the contractor believes that a decision taken by the Engineer was outside the authority given to the Engineer by the Contract or that the decision was wrongly taken, the decision shall be referred to the Adjudicator within 14 days of the notification of the Engineers decision. 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. 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 a 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 Adjudicators written decision. If neither party refers the dispute to arbitration within the above 28 days, the Adjudicators 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." 3. According to the learned counsel for the appellant, the decision shall be referred to the Adjudicator within 14 days of the notification of the Engineers decision, if the Contractor believes that the decision taken by the Engineer was either outside the authority given to the Engineer by the contract or that the decision was wrongly taken. Thereafter, the Adjudicator shall give a decision within 28 days of receipt of the notification of the dispute referred to him by the Contractor. Then, either party may refer the decision of the Adjudicator to an Arbitrator within a period of 28 days of the Adjudicators written decision. 4. However, in the case on hand, the learned counsel appearing for the appellant would submit that the decision of the Engineer was not referred to the Adjudicator by the Contractor. Without such reference, the matter was straight-away referred to the Arbitrator. Therefore, the learned counsel for the appellant would submit that the Arbitrator has no jurisdiction to adjudicate the claim. 5. A reading of the Arbitrators award in Paragraph No.4 would show that the dispute and difference that arose between the Contractor and the Engineer were referred to the Adjudicator earlier and he directed the parties to opt for arbitration by his proceedings dated 28-01-2000, without deciding anything on merits. In view of the said proceedings of the Adjudicator, the sole-arbitrator was appointed by a mutual agreement and the sole-arbitrator decided the issue by passing the award. In view of the said proceedings of the Adjudicator, the sole-arbitrator was appointed by a mutual agreement and the sole-arbitrator decided the issue by passing the award. The entertainment of the dispute by the Arbitrator without there being the written decision of the Adjudicator was not raised specifically either before the sole-arbitrator or before the First Appellate Authority. Admittedly, the said question is raised for the first time in this civil miscellaneous appeal. Therefore, in our considered opinion, the appellants cannot be allowed to raise such an issue at this stage. In the result, the civil miscellaneous appeal is dismissed. However, there will be no order as to costs. The connected miscellaneous appeal is closed. In this context a reference was made to Section 11(4) of the Arbitration and Conciliation Act and it runs thus: "11. Appointment of arbitrators.- .. (4) If the appointment procedure in sub-section (3) applies and - (a) a party fails to appoint an arbitrator within thirty days from the receipt of a request to do so from the other party; or (b) the two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their appointment; the appointment shall be made, upon request of a party, by the Chief Justice or any person or institution designated by him."