Monnet Ispat and Energy Limited v. Orissa Manganese and Mineral
2012-09-28
V.GOPALA GOWDA
body2012
DigiLaw.ai
JUDGMENT V. GOPALA GOWDA, C.J. - The facts of bath the cases are common and grounds taken are similar. Therefore, bath the petitions are heard together and disposed of by this common judgment. 2. Bath the petitions are filed under Sections 11 (6)(c) read with 14 and 15 of the Arbitration and Conciliation Act, 1996 (far short, "the Act, 1996") far appointment of an arbitrator in place of Justice P.K. Mohanti as he is unable to perform the functions of an Arbitrator urging various facts and legal contentions. 2. Necessary brief facts stated in bath the petitions are as follows: 3. It is stated that the parties herein entered into. an agreement dated 6.3.2006, wherein it was agreed that the respondent would sell the entire quantity of manganese are produced from the lease hold area exclusively to the petitioners-company and the petitioners in turn agreed to purchase from the respondent the entire quantity of all grades of manganese are in terms of the agreement. 4. It is stated that since dispute arose between the parties, the parties have appointed an Arbitral Tribunal in terms of Clause 18 of the said agreement comprising of Justice P.K. Mohanti the Nominee Arbitrator of the petitioners, Shri Himadri Mohapatra Nominee Arbitrator of the respondent. In view of Section 10 of the Act, 1996, which provides far uneven number of Arbitrators, an application was filed far appointment of the Presiding Arbitrator. Consequently, the Presiding Arbitrator Justice D.P. Mohapatra was appointed as Presiding Arbitrator. Justice P.K. Mohanti, the Nominee Arbitrator of the petitioners has been impleaded as opp.party Na.2 in bath the petitions. 5. It is stated that in view of physical as well as mental state of Shri P.K. Mohanti, the Nominee Arbitrator of the petitioners who is unable to perform his functions, the petitioners approached him an 24.5.2009 to resign from the Arbitral Tribunal. The said Arbitrator did not accede to the request of the petitioners. Once again an 13.11.2010 learned counsel of the petitioners Ms. Suruchi Aggarwal upon instructions personally requested Justice Mohanti to resign as he was incapable of performing his functions. It was painted out that the said Arbitrator is not able to actively and effectively participate in the arbitration proceedings and is unable to apply his mind or even does not contribute in any manner what so ever due to his aid age and debility.
It was painted out that the said Arbitrator is not able to actively and effectively participate in the arbitration proceedings and is unable to apply his mind or even does not contribute in any manner what so ever due to his aid age and debility. Despite his presence at the sitting of the Tribunal, due to his inability to read properly the subject matter being discussed/argued at the proceedings or to follow proceedings when arguments take place, the Tribunal is in effect functioning as Two-Member Tribunal. 6. It is stated that the proceedings have not progressed in mare, than two years as the said Member of the Tribunal holds up the proceedings not being able to cape up with the pace of arguments or even the marking of documents. One person is required to open the pages of the documents and mark them for the said Arbitrator as he is not able to understand or even follow what has been filed or marked or exhibited. There have been instances when the Tribunal had to disperse and consequently the proceedings were called to a halt for the day, when the said Arbitrator had got exhausted after an hour or so of the proceedings. There have also been instances when the proceedings had to be adjourned when he suddenly fell ill. The petitioners and their counsel had to travel to Bhubaneswar from Delhi on the said date. Further, on one occasion the said Arbitrator had fallen ill during the proceedings and the proceedings had to be halted. A copy of the said proceedings dated 9.9.2009 is produced marked as Annexure-2. 7. It is stated that the hearings take place at the residence of the Nominee Arbitrator of the petitioners due to the immobility of the said Nominee Arbitrator. He is not able to take any decision on legal matters and does not even appreciate facts and law due to old age While matter was at the stage of evidence and cross-examination of one of the witnesses of the petitioners was listed for the next date of hearing, i.e., 8.1.2011, the said Arbitrator was unable to contribute in the cross-examination, which is a very crucial stage of the proceedings. Further, the proceedings are getting delayed due to his inability to pick up matters and understand them. 8. It is stated that a Two-Member Tribunal is not permissible under the Act, 1996.
Further, the proceedings are getting delayed due to his inability to pick up matters and understand them. 8. It is stated that a Two-Member Tribunal is not permissible under the Act, 1996. Due to the said Arbitrator, who is unable to apply his mind at all being hard of hearing due to old age, the Tribunal is forced to function as such. 9. It is also stated that the petitioners have also informed the presiding Arbitrator as well as the third Arbitrator that a request has been made to the said Arbitrator to resign due to his inability to perform. Hence, the petitioners in both the petitions have requested for termination of the Nominee Arbitrator of the petitioners and to appoint another Arbitrator in his place to continue the arbitral proceedings in both the cases as the dispute between the parties could not be resolved expeditiously, which is the object and intendment of the A & C Act. 10. These petitions are seriously contested by learned Senior Counsel Mr. R.K. Rath appearing on behalf of opp.party No.1 without filing any counter on the jurisdictional issue. He contended that this Court has no jurisdiction to entertain the petitions filed under Sections 11 (6) (b) read with Sections 14 and 15 of the Act, 1996 by placing reliance upon the judgment of the Supreme Court in the case of Nimet Resources Inc. and another v. Essar Steel Ltd., reported in 2007 (Suppl.) Arb. LR 7 (SC); the judgment of the Andhra Pradesh High Court in the case of M/s. V.V.S. Constructions, Engineering Contractors, Visakhapatnam v. M/s. IVRCL Infrastructure and Projects Ltd., Hyderabad, reported in AIR 2011 AP 136, and the decision in the case of Rakesh Jain v. Wellwon Builders (India) Private Ltd. reported in 2011 (4) Arb. L.R. 160 (Allahabad). 11. With reference to Sections 14(2) and 15 read with Section 11 (6) (c) of the Act, 1996 the definition of "Court", which is occurred in Section 14(2) means the principal Civil Court having original jurisdi9tion in a district and includes the High Court in exercise of its ordinary original civil jurisdiction having jurisdiction to decide the question forming the subject matter of arbitration having jurisdiction as defined under Section 2(c) of the Act, if the same has been the subject matter of suit.
Clauses (a) and (b) of Sub-section (1) of Section 14 provide that the mandate of an arbitrator shall terminate, if he becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay; and he withdraws from his office or the parties agree to the termination of his mandate. Sub-section (2) of Section 14 provides that if a controversy remains concerning any of the grounds referred to in clause (a) of Subsection (1), a party may, unless otherwise agreed by the parties, apply to Court to decide on the termination of the mandate. In this regard, learned Senior Counsel placed reliance upon the following two judgments in the case of M/s. S.B.P. & Co. v. M/s. Patel Engineering Ltd. and another, reported in AIR 2006 SC 450 (paras-5, 7 and 8), and in the case of Datar Switchgears Ltd. v. Tata Finance Ltd. and another, (2000) 8 SCC 151 (paras-6 and 19). 12. Mr. Rath further contended that in the Arbitration proceedings six hundred and odd questions have been recorded by him and counter affidavit has also been filed by him traversing the averments made in the arbitration petitions. Therefore, he has prayed for dismissal of the petitions holding that they are not maintainable before this Court. 13. During pendency of the proceedings in both the Arbitration Case Misc. Case No.25 of 2011 and 26 of 2011 were filed under Chapter VI Rule 27 of the High Court of Orissa Rules to implead the Nominee Arbitrator as opp.party No.2 as he is proper and necessary party to the proceedings. The said Misc. Cases were allowed and the Arbitrator Justice P.K. Mohanti (Retd.) has been impleded as opp.party No.2. Opp.party No.2-Justice Mohanty has filed his counter affidavit through his lawyer, which is at Flag-D. The gist of the said affidavit is stated briefly as hereunder. 14. He has raised the plea of jurisdiction of this Court and requested not to entertain the petitions filed by the petitioners placing strong reliance upon Section 11 (6)(c) read with Sections 14 and 15 of the A and C. Act. 15. Mr. Y. Mohanty learned Senior Counsel appearing on behalf of opp.party No.2 contended that the aforesaid provisions of the Act, 1966 certainly do not include the Chief Justice of this High Court because the said Court does not exercise any ordinary civil original jurisdiction.
15. Mr. Y. Mohanty learned Senior Counsel appearing on behalf of opp.party No.2 contended that the aforesaid provisions of the Act, 1966 certainly do not include the Chief Justice of this High Court because the said Court does not exercise any ordinary civil original jurisdiction. Hence, he submitted that these petitions are not entertainable in law by the Chief Justice of this Court. 16. In so far as allegations made against opp. No.2 are concerned, at para 3.1 of the affidavit it is stated by him that the allegations are vague and indefinite regarding the alleged incapacity of opp.party No.2 to perform his duty as an Arbitrator not being actively and effectively. Participating in the arbitration proceeding and the allegation of inability to apply his mind or even to contribute the Arbitration proceedings and not able to cope up with the pace of argument and other such allegations made in the both the petitions are vehemently denied as false. Having so denied he stated that there is no iota of truth in the averment that opp.party No.2 has either become de facto or de jure unable to perform his functions as such as an Arbitrator. He further submitted that as a matter of fact there is not even whisper by their pleadings that opp.party No.2 has become legally either incapacitated or unable to perform his functions as an Arbitrator by operation of law or by an order of the competent Court of law. 17. It is stated at para 3.2 of the said affidavit that the allegations of categorized and catalogued by the petitioners are by no means pleadings to establish a de facto inability or incapacity of opp.party No.2 to perform his functions as such as an Arbitrator. The opp.party No.2 not only signed all the day to day orders passed in ARBP No.2/2008 but also has signed some other orders on some specific issues simultaneously with the other two Arbitrators, contributing to it and in fact had always corrected the draft orders as and when necessary before procurement of the said orders because the Arbitral tribunal in this case is comprised of three members including the Presiding Arbitrator, who is a retired Judge of the Supreme Court of India.
When the performance of the functions of opp.party No.2 is so long at par with the other two Arbitrators who has contributed equally to the preparation of all orders passed by them such orders being consensual and unanimous, it is frivolous to characterize that opp.party No.2 has become de facto unable to perform his functions. On record, when the other two Arbitrators have not contributed anything more than what this opp.party No.2 has contributed in the Arbitration proceedings, the allegations catalogued by the petitioners have to be treated as canards and malicious because if a word out of those allegations is believed then the other two Arbitrators will be deemed to have become de facto unable to perform their functions. 18. It is stated at paragraph-3.3 of the said affidavit that the yardstick which is fulfilled by the other two Arbitrators to escape the allegations of the petitioners have also been fully met or fulfilled by opp.party No.2. So the allegations of the petitioners are denied untrue and incorrect. 19. There is also no pleading in these petitions to claim relief' under Section 14(1)(a) to justify that for other reasons opp.party No.2 failed to act without undue delay. There is not a single syllabus by way of pleadings in this petition which will indicate that this-Arbitrator failed to act without undue delay and therefore his mandate was liable to be terminated. 20. It is further stated that all' the day to day orders passed in the proceedings on a specific issue have been passed by all the Arbitrators on the same day because all the orders are consensual and unanimous in nature. Therefore, opp.party No.2 has not lacked in the matter of expedition in discharge of his duties when compared to the other two Arbitrators. It is therefore stated that these petitions under Section 14(2) of the Act, 1996 are totally devoid of all the contingencies and eventualities mentioned under Section 14(1)(a) of the Act, 1996 and the present petitions are not entitled to be entertained for want of pleadings and proof in relation to Section 14(1)(a) of the A & C Act. 21.
It is therefore stated that these petitions under Section 14(2) of the Act, 1996 are totally devoid of all the contingencies and eventualities mentioned under Section 14(1)(a) of the Act, 1996 and the present petitions are not entitled to be entertained for want of pleadings and proof in relation to Section 14(1)(a) of the A & C Act. 21. It is further stated that the expectation of the petitioners from opp.party No.2, if there allegations are of any indications, is not concomitant with the neutrality or impartiality, which are obvious, attributes an Arbitrator while conducting a proceeding, even though he might have been nominated by a particular party. 22. Strong reliance is placed upon Sub-section (1) of Section 15 of the Act, 1996, which contemplates provisions for termination of the mandate of an Arbitrator and substitution of the said Arbitrator, in the circumstances referred to in Sections 13 & 14 besides Section 15(1)(a) and (b). Further, reliance is also placed upon Sub-section (2) of Section 15, which provides that the rules that are applicable for appointment of the Arbitrator being replaced shall govern the appointment of a substitute Arbitrator as and when the mandate of the Arbitrator being replaced. 23. It is stated that Sub-sections (3) and (4) of Section 15 have no application or relevance to the purported controversy raised in this petitions at this stage inasmuch as mandate of the Nominee Arbitrator is yet to be terminated. 24. It is stated that Clause 24 of the agreement dated 6.3.2006 provides for Arbitration route to be the only mode and manner for resolution of disputes arising out of the said agreement dated 6.3.2006 and also the mode and manner for constitution of an Arbitral Tribunal for the said purpose. In other words, Clause 24 provides the rules that are applicable to the appointment of the Arbitrator. 25. It is stated that Section 11 (6)(c) of the Act, 1996 clearly provides that the Chief Justice of this High Court is not vested with power or authority to appoint an Arbitrator in place of the Arbitrator sought to be replaced as has been fraudulently and mischievously prayed for, the reason being that such an authority or power is vested in this case on the petitioners in view of Section 15(2) so also Section 11 (6)(c) of the Act, 1996.
Further, Section 11 (6)(c) only enables a party to request the Chief Justice or any person or institution designated by him to take necessary measures unless the agreement on the appointment procedure provided other means for securing the appointment which is an integral part of the said Section 11 (6)(c) and that provision when read with Section 15(2) of the Act, 1996 which lays down that the rules that are applicable to appointment of the Arbitrator sought to be replaced shall also be the rule-for appointment of a substitute Arbitrator as and when the mandate of an Arbitrator is terminated, which makes it abundantly clear that the Chief Justice has no role to play in these cases. 26. Learned Senior Counsel Mr. Mohanty in support of his contention placed reliance upon the decisions in the case of Indo Pacific Aviation Pvt. Ltd. v. Pawan Hans Helicopters Ltd. reported in 2008 (1) Raj 682 (Del), wherein it is held as hereunder: "before there could be a failure to act or to failure to perform as required under clauses (a) and (c) of Sub-section (6) of Section 11 of the said Act, it must be shown that the Arbitration Clause was invoked by one party. if, upon such invocation, the Respondent failed to act as per the agreed procedure or the Chairman-cum-Managing Director failed to nominate a person to act as sole Arbitrator, then the power u/s 11 (6) could be exercised, not otherwise. A letter raising the claim with a threat to initiate appropriate legal proceeding does not amount to invocation of the Arbitration Clause. There was no request from the petitioner to the respondent in term of the Arbitration Clause. There was no request from the petitioner to the respondent in term of the Arbitration clause of the Agreement, calling upon the question of the respondent failing to act as per the agreed procedure." 27. Further the Apex Court in the case of National Highway Authorities of India v. Bhumihiways DDB Ltd., 2006 (4) Arb.LR.
There was no request from the petitioner to the respondent in term of the Arbitration clause of the Agreement, calling upon the question of the respondent failing to act as per the agreed procedure." 27. Further the Apex Court in the case of National Highway Authorities of India v. Bhumihiways DDB Ltd., 2006 (4) Arb.LR. 1 (SC), has held as hereunder: "The relief claimed by invoking Section 11 (6) is wholly erroneous when prior to filing of the petition, the respondent only sought a clarification from the Indian Road Congress and without making a reference to them, immediately filed the petition u/s 11 (6) on the purported ground that the Indian Road Congress has failed to make the appointment within the stipulated time. In the instant case, after resignation of the appointed Arbitrator, the process of appointment has restarted as per clause 15(2) of the Act. However, the concerned Institution, i.e., Indian Road Congress being restrained by a High Court from making the appointment, there was no failure on the part of the concerned institution so as to justify invocation of Section 11 (6) of the Act." 28. With reference to the meeting with the learned counsel Ms Suruchi Aggarwal on 13.11.2010, opp.party No.2 says that she does remember correctly. Further, it is stated that if opp.party No.2 was incapable to perform his functions as an Arbitrator, as alleged in paragraph-5 of ARBP No.26 of 2011, it was expected of the petitioners or learned counsel Ms Suruchi Aggarwal to have brought the said fact to the notice of the other two Arbitrators much prior to 13.11.2010, if actually Ms Aggarwal, had met opp.party No.2 on13.11.2010. 29. It is further stated that the Arbitral Tribunal in ARBP No.2/2008 conducted proceedings on 13.11.2010 as well as on 11.12.2810. If Ms Aggarwal, as per instructions, requested opp.party No.2 to resign from the Arbitral Tribunal for whatever reason, it may be, she could have disclosed to the Tribunal in presence of the other two Arbitrators as well as the lawyers for the opp. parties. She has not pleaded to have so done nor she has pleaded to have informed the Presiding Arbitrator and the 3rd Arbitrator about the so called request purportedly made to opp.party. 30.
parties. She has not pleaded to have so done nor she has pleaded to have informed the Presiding Arbitrator and the 3rd Arbitrator about the so called request purportedly made to opp.party. 30. Further, opp.party No.2 has clarified that neither the Presiding Arbitrator nor the 3rd Arbitrator have spoken or enquired from him if actually Ms Suruchi Aggarwal ever made such request to this dependent as has been stated in Para-5 of the petition (ARBP No.26/2011). Therefore, the allegations of the petitioners including its Advocate Ms Suruchi Aggarwal should be discarded as false and frivolous. 31. Further, the allegations made at paragraph-6 of the petition that there have been instances when the Tribunal had to disperse and consequently proceedings were halted for the day when opp.party No.2 got exhausted after an hour or so of the commencement of the proceedings and that there have been instances when proceedings had to be adjourned when opp.party No.2 suddenly fell ill are all false, frivolous and cantankerous allegations and there is no proof to the said effect. 32. Insofar as Annexure-2 to this petition is concerned, it may be stated that the said document-merely indicates that the proceedings were deferred for unavoidable reasons. It does not indicate that the proceedings of that day were adjourned because of the illness of opp.party No.2. 33. It is stated that the allegations that on one occasion opp.party No.2 fell ill during the proceedings for which the proceedings had to be abandoned, is a mere concoction because Annexure-2, which is filed in support of the aforesaid outrageously false statement, will go to show that the proceedings on 9.9.2009 was adjourned for unavoidable reasons. As a matter of fact, none of the Arbitrators including opp.party No.2 appears to have not been paid any fees for that date (9.9.2009), which indicates that the parties were intimated in advance of such a contingency and, despite that, Ms Suruchi Aggarwal chose to come as it was entirely her choice. Therefore, the counsel appearing for the parties are responsible for procrastination which has taken place in conducting the arbitration proceedings for their blame worthy conduct, yet, the same has been the same has been foisted on opp.party even though none of the sittings of the proceedings was ever adjourned on account of account of opp.party except once in between 2008 and 2011. 34.
34. Further, it is emphatically stated that there was no adjournment on account opp.party No.2 between 2008 and 2011 as has been falsely alleged. An examination of the order sheets of ARBP No.2/2008, on different dates will go, to indicate how the petitioners and their counsel applied for time/adjournments at their sweet will. 35. It is stated that the statements made by the petitioners alleging adjournments of the arbitration proceedings on account of opp.party No.2, as stated earlier, are all false and frivolous which will appear from the facts, which are as follows: “(i) On 8.2.2008 - the claimant filed an application for time for appointment of 3rd Arbitrator. (ii) On 29.3.2008 - M.R. Mohanty, Advocate for the claimant filed application for time to allow the claimant to file a panel of names for appointment of 3rd Arbitrator. (iii) On 29.4.2008 - Application filed by the claimant for further time to file statement of claim. (iv) On 10.5.2008 - Ms. S. Aggarwal, Advocate for the claimant filed an application to defer the present arbitration proceedings and adjourn the matter till decision by the Court on the issue of consent. (v) On 20.6.2008 - Ms. S. Aggarwal, Advocate for the claimant prayed for a short adjournment to file a copy of the memorandum dated 5.6.2008 together with a letter dated 10.5.2008. (vi) 12.10.2008 - No claim statement filed by the claimant. Adjourned to 31.10.2008 for the said purpose. (vii) On 8.12.2008 - claimant's Advocate prayed for grant of time till 19.12.2008 for filing rejoinder, if any. (viii) On 19.12.2008 - M.R. Mohanty, Advocate for the claimant applied for time to file rejoinder. Time till 1.1.2009. is granted for the said purpose. (ix) On 2.1.2009 - claimant filed for extension of time for filing rejoinder. The allowed till 4th January, 2009 for the said purpose. (x) On 8.6.2009 - Advocate for the claimant filed an application for issue a direction to the respondents to produce certain documents. (xi) On 9.6.2009 - Advocate for claimant filed a period for time to produce documents. (xii) On 4.7.2009 - Advocate for the claimant took time for producing of certain documents. (xiii) On 1.11.2009 - Ms. S. Aggarwal further submitted that-the documents mentioned in order dated 31:10.2009 may be marked as Exhibits on behalf of the claimant after response, if any, is filed by the respondent. Also Mr.
(xii) On 4.7.2009 - Advocate for the claimant took time for producing of certain documents. (xiii) On 1.11.2009 - Ms. S. Aggarwal further submitted that-the documents mentioned in order dated 31:10.2009 may be marked as Exhibits on behalf of the claimant after response, if any, is filed by the respondent. Also Mr. Aggarwal sought for time for production of Sunil Kumar Mittal on the next date. (xiv) On 14.11.2009 - Mr. M.R. Mohanty, Advocate for the claimant prayed for adjournment to the ground of illness of Ms. Suruchi Aggarwal, leading Advocate for the claimant. (xv) On 13.2.2010 -claimant took time for filing of Affidavit Evidence of one more witness. (xvi) On 20.3.2010 - Mr. Aggarwal, Advocate for the claimant prayed for time for filing affidavit evidence of the witness, she intends to examine in support of the claimant's case. (xvii) On 11.4.2010 - Mr. M.R. Mohanty, Advocate for the claimant prays for adjournment for unavoidable absence of Ms. S. Aggarwal, Advocate due to her personal illness. (xviii) 11.12.2012 - Ms. Suruchi Aggarwal took time on the ground that Rakesh Goyal, who is being examined as witness has suddenly fallen ill." 36. Further, it is stated that Ms Aggarwal, Advocate for the claimant examined one Sunil Kumar Mittal as P. W.1. The evidence on affidavit of S.K. Mittal was filed on 22.8.2009 but in order to prove certain documents to him and also for his cross examination, his further examination and cross examination were conducted on 23.12.2009, 24.12.2009, 16.1.2010, 17.1.2010. Therefore, the claimant took about five months' time for further examination and cross-examination of this witness. 38. Further, it is stated that the evidence on affidavit of one Rakesh Goyal was filed by the claimant on 1.5.2010. A large number of documents have been produced through this witness on 12.6.2010, 10.7.2010, 17.7.2010, 7.8.2010, 5.9.2010, 25.9.2010, 23.10.2010, 13.11.2010. 39. Therefore, it is submitted by the learned Senor Counsel Mr. Y. Mohanty that both the ARBP petitions are completely devoid of any merit and are liable to be rejected in limine and at the threshold on the ground of maintainability and also for want of pleadings. 40.
39. Therefore, it is submitted by the learned Senor Counsel Mr. Y. Mohanty that both the ARBP petitions are completely devoid of any merit and are liable to be rejected in limine and at the threshold on the ground of maintainability and also for want of pleadings. 40. With reference to the above rival legal contentions urged on behalf of the learned counsel for the parties, the questions that would arise for consideration by this Court are as follows: (i) Whether this Court has got jurisdiction to entertain these petitions in view of the objections raised by opp.party No.2 to the grounds urged under Sections 14(1)(a) and Section 14(2) of the A & C Act? (ii) Whether the dispute between the petitioners and opp.party No.2 is required to be resolved under Section 14(2) of the Act, 1996 that the petitioners required to apply to the Court as defined under Section 2(c) of the Act to decide the termination of the mandate? (iii) Whether the petitioners are entitled to relief to hold that opp.party No.2 dejure and de facto unable to perform his functions and substitute him by appointing another Arbitrator by the Chief Justice of this Court under Section 11 (6)(c) of the Act, 1996 ? (iv) What order? 41. The question No.(i) is required to be answered against the petitioner for the following reasons. It is an undisputed fad that opp.party No.2 was appointed as Nominee Arbitrator on behalf of the petitioners in the Arbitral Tribunal to resolve the dispute between the parties. It is the case of the petitioners that opp.party No.2 is in fact unable to perform his functions as an Arbitrator in the Arbitral Tribunal as averred at paragraphs3,4 and 5 in ARBP No.61 of 2010. Similar averments are also made in the connected ARBP No.26 of 2011. The said allegations have beer denied by opp.party No.2 in his affidavit filed after he was impleaded as proper and necessary party to the proceedings, wherein the allegations have been extensively adverted. A detailed affidavit has been sworn to by opp.party No.2 traversing various allegations made at paragraphs-3 to 5 in the ARBP petitions and vehemently contending that he has been functioning as the Arbitrator in the Arbitral Tribunai and discharging his functions.
A detailed affidavit has been sworn to by opp.party No.2 traversing various allegations made at paragraphs-3 to 5 in the ARBP petitions and vehemently contending that he has been functioning as the Arbitrator in the Arbitral Tribunai and discharging his functions. Further, he has categorically stated at paragraph-15 of the counter that the arbitration proceedings have been adjourned not at the instance of opp.party No.2-Arbitrator but at the instance of the lawyer appearing on behalf of the parties. Therefore, the contentions urged by the learned counsel for the petitioners that the petitions filed Sections 11 (6)(c) read with 14 and 15 of the Act, 1996 are seriously disputed by opp.party No.2. Sub-section (2) of Section 14 is attracted to the facts situation of the case. Having regard to the fact that opp.party No.2 is contesting the ground urged under Section 14(1)(a) of the Act, 1996 that the mandate of the Arbitrator shall be terminated if the Arbitrator becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay, is seriously disputed. Therefore, the petitioners are required to apply to the competent Court as defined under Section 2(e) of the Act, 1996 to decide on the question of termination of the mandate. The definition of "Court" under Section 2(e) of the Act, 1996 is defined as under: "(e) 'Court' means the principal civil Court of original jurisdiction in a district, and includes, the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject matter of the arbitration if the same had been the subject-matter of a suit, but does not include any civil Court of a grade inferior to such principal civil Court, of any Court of Small Causes;" 42. Learned counsel Ms S. Aggarwal has placed strong reliance upon the judgment in the case of Cinevistaas v. Prasar Bharati, reported in 2008 (4) ARBLR 112 (Delhi), wherein the Chief Justice of Delhi High Court was pleased to appoint an Arbitrator in a similar situation, wherein the already appointed Arbitrator was sought to be replaced by the petitioner therein. The application filed under Section 11 (6) of the Act, 1996 was allowed and a retired Judge was appointed as the Arbitrator.
The application filed under Section 11 (6) of the Act, 1996 was allowed and a retired Judge was appointed as the Arbitrator. She has also placed reliance upon the judgment in the case of NBCC Limited v. J.G. Engineering Private Limited, (2010) 2 SCC 385 , wherein at paragraph-27 of the said judgement it has been categorically held that it is clear from a bare reading of Sub-section 1 (a) of Section 14 of the Act, 1996 the mandate of arbitrator shall terminate if he fails to act without undue delay. This decision has no application to the facts situation of the present case in view of the undisputed fact that the Nominee-Arbitrator in support of whom the averments to attract the grounds under Section 14(1)(a) is seriously challenged by him by swearing an affidavit. Therefore, the ground urged under Sub-section 1 (a) of Section 14 of the Act, 1996 to terminate the mandate of the Arbitrator is seriously contested. Therefore, Section 14(2) is attracted. The petitioner is required to approach the civil Court is the contention urged by the learned Senior Counsel Mr. Rath and Mr. Mohanty referring to decision of the Supreme Court in the case of Nimet Resources INC and another v. Essar Steels Ltd., 2007 (Suppl.) Arb. LR 7 (SC), wherein the Supreme Court after referring to Section 14(2) of the Act and the definition of Section 2(e) has held that "Court" means the principal civil Court of original jurisdiction in a district, and includes the High Court as an appellate Court. 43. In the said case, the reliance placed upon by the learned Senior Counsel Mr Rath was sought to be distinguished by the petitioner's counsel contending that this case is distinguishable for the reason that the said case was decided in an appeal arising out of an appeal under Section 34 of the Act, 1996. Therefore, this decision has no application to the facts situation of the present case and cannot be accepted by this Court in view of the clear provision of Sub-section (2) of Section 14 of the Act, 1996 that the parties are required to apply to the Court to decide the termination of the mandate. The "Court" referred to in Subsection (2) of Section 14 of the Act, 1996 is the "Court" which has got original jurisdiction.
The "Court" referred to in Subsection (2) of Section 14 of the Act, 1996 is the "Court" which has got original jurisdiction. Therefore, the said dispute between the petitioner and opp.party No.2 that opp.party No.2 has either become de jure or de facto unable to perform his functions is seriously contested. This aspect of the matter requires to be determined' by the competent Civil Court, which has got original jurisdiction by recording evidence. Though the petition is filed under Sections 14(1) and Section 15 of the Act, 1996 when the averments and allegations made by the petitioners against opp.party No.2 with regard to the grounds urged under Section 14(1)(a), which is disputed, the disputed question cannot be decided by me in exercise of my statutory power under Section 11 (6)(c). Therefore, the interpretation to, the definition of "Court" under Sub-section (2) of Section 14 of the Act, 1996 in terms of Section 2(e) has been succinctly held in the case of the Nimet Resources INC and another v. Essar Steels Ltd. referred to supra. The said decision is aptly applicable to the facts situation of the present case. Hence, I have accepted the argument advanced by the learned Senior Counsel appearing on behalf of opp.party Nos.1 and 2 and unable to accept the legal contention urged by the learned counsel for the petitioners placing reliance upon the decisions of the Delhi High Court in the case of Cinevistaas v. Prasar Bharati, and the decision of the Supreme Court in the case of NBCC Limited v. J.G. Engineering Private Limited referred to supra and under Section 14(2), the definition of Section 2(e) of the Act, 1996 regarding the "Court" has not been extensively considered. Therefore, the reliance placed by the learned counsel for the petitioners upon the said decisions cannot be applied to the facts situation of the present case. Therefore, I hope, the petitions are not maintainable before this Court. Since point No.(1) is answered against the petitioner, the question of accepting the case of the petitioner that the mandate of opp.party No.2, as an Arbitrator as he is unable to perform his functions as Arbitrator, invoking the grounds under Section 14(1)(a) is not applicable to the facts situation of the case as opp.party No.2 has seriously contested. This matter requires adjudication by the competent civil Court with regard to termination of the mandate of the Arbitrator. 44.
This matter requires adjudication by the competent civil Court with regard to termination of the mandate of the Arbitrator. 44. Therefore, I cannot accept the case of the petitioner pleaded and appoint an Arbitrator in place of opp.party No.2. The petitioners are at liberty to work out their rights before the competent Civil Court. With the aforesaid observations, both the arbitration petitions are disposed of. Petition disposed of.