Research › Search › Judgment

Allahabad High Court · body

2012 DIGILAW 944 (ALL)

RUNGTA PROJECTS LTD. v. GOVERNMENT OF UTTAR PRADESH

2012-04-20

PANKAJ MITHAL

body2012
JUDGMENT Hon’ble Pankaj Mithal, J.—Heard Shri R.P. Mishra, learned counsel for the petitioner and learned Standing Counsel who appears for the respondents. 2. Petitioner has filed this petition under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) for appointment of an arbitrator pursuant to the disputes/claims arising out of an agreement between the parties dated 2.5.1998 which contains an arbitration clause as under : Clause No. 34(A)(III) : Every dispute, differences or question which may at any time arise between the parties here to or any person claiming under them, touching or arising out or in respect of this deed or the subject-matter there of shall be referred to the Arbitration of Chief Engineer or any person nominated by him. 3. In pursuant to the above arbitration clause Chief Engineer, Bansagar Canal Construction Division, Department of Irrigation, Government of U.P., Govindpur, Allahabad entered into the arbitration some time in the year 2005 but he retired without making any award. Then Shri D.K. Gupta, the new Chief Engineer took over the arbitration in his place but failed to proceed. 4. In view of the above circumstances, petitioner approached this Court by means of Writ Petition No. 56801 of 2005 for a direction to the arbitrator to proceed with the matter and to pass an award expeditiously. The above petition was disposed of vide order dated 23.8.2005 and the arbitrator was directed to conclude the arbitration proceedings and to make the final award as early as possible within a period of three months from the production of certified copy of the orders. 5. Petitioner again approached this Court by means of Writ Petition No. 20505 of 2009. It was disposed of on 17.4.2009 with the observation that substantial justice would be served if the arbitrator makes the award preferably within a period of three months. 6. Thereafter, another Writ Petition No. 70270 of 2011 was filed by the petitioner for getting the award made at the earliest. It was dismissed on 7.12.2011 with the clear observation that the petitioner may approach the arbitrator or the Court for the appointment of a fresh arbitrator. 7. 6. Thereafter, another Writ Petition No. 70270 of 2011 was filed by the petitioner for getting the award made at the earliest. It was dismissed on 7.12.2011 with the clear observation that the petitioner may approach the arbitrator or the Court for the appointment of a fresh arbitrator. 7. It is in the above background when the Chief Engineer had not proceeded with the arbitration that the petitioner pressed this application for appointment of arbitrator on the ground that the mandate of the Chief Engineer as arbitrator stood terminated under Section 14 of the Act as he was unable to perform his functions and had unnecessarily delayed the proceedings. 8. Learned Standing has not disputed the existence of the arbitration clause and that the Chief Engineer so far has failed to make an award. 9. Section 14 of the Act provides that the mandate of an arbitrator shall terminate if he is de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay. Section 15 of the Act lays down that where the mandate of an arbitrator terminates, a substitute arbitrator shall be appointed in accordance with the rules. 10. In view of the above facts and circumstances, it is clear that the arbitrator named in the agreement by designation is unable to perform his functions and there is no controversy that his mandate stands determined and as such there is no need under Section 14(2) of the Act to get his mandate terminated by the Court. 11. In the case of Decon India Pvt. Ltd. v. Union of India, 2005 (II) Recent Arbitration Judgment 584 (Cal), it has been held that when the arbitrator appointed fails to act without undue delay despite an order from the High Court it can safely be ruled that the arbitrator had taken the matter in a casual manner which is against the very object and principle of the Act itself and his mandate would stand terminated. 12. The similar view has been taken by the Andhra Pradesh High Court in the case of M/s. Deepak Galvanising & Engineering Industries Pvt. Ltd. v. Government of India, 1998 (1) Recent Arbitration Judgment 55 (AP). 12. The similar view has been taken by the Andhra Pradesh High Court in the case of M/s. Deepak Galvanising & Engineering Industries Pvt. Ltd. v. Government of India, 1998 (1) Recent Arbitration Judgment 55 (AP). In the aforesaid case when the arbitrator named in the agreement had failed to proceed with the arbitration despite reminders issued to him it was held that the mandate of the named arbitrator should be deemed to have terminated on the ground that he failed to act without undue delay and the Chief Justice of the High Court or his delegate is empowered to appoint a substitute arbitrator. In view of the aforesaid facts and circumstances, I am satisfied that it is a case where the mandate of the named arbitrator stand terminated under Section 14 (1) of the Act and a substitute arbitrator is required to be appointed. In view of the above, I appoint Hon’ble Mr. Justice Shishir Kumar, R/o Flat No. 24, Anpurna Vihar, 3-D, Beli Road Allahabad a former judge of this Court as an arbitrator. The Registrar General is directed to provide a copy of this order to the learned arbitrator. ——————