Cubix Ventures (P) Ltd. v. BHEL (R&D) Employees Co-op. Housing Society Ltd.
2014-02-28
KALYAN JYOTI SENGUPTA
body2014
DigiLaw.ai
ORDER Kalyan Jyoti Sengupta, C.J. 1. This application has been taken out by the petitioner for appointment of an Arbitrator. In this matter there is no dispute as to the existence of the arbitration clause. It is the contention of the petitioner that in spite of applying for appointment of Arbitrator, no steps have been taken by the respondents. 2. Learned Counsel for the petitioner says that there are two limbs of arbitration agreement. First limb is that single Arbitrator shall be appointed by mutual consent of the parties failing which each party will be entitled to nominate their own Arbitrator and the two Arbitrators will form the Arbitral Tribunal. In case of disputes arise between them, they are entitled to nominate an Umpire to adjudicate upon the difference of opinion. In spite of fulfilling condition mentioned therein, the respondent did not do anything. 3. Learned Counsel for the respondents, on the other hand, says that actually the respondents are not ready and willing to go to arbitration nor they have performed in terms of the arbitration clause. 4. The petitioner at one point of time has nominated one Mr. Ashok Verma as Sole Arbitrator and the respondents have also agreed to such appointment and Mr. Ashok Verma is still seized over the matter. Under such circumstances, question of appointment of Arbitrator by me does not and cannot arise. 5. In any view of the matter, in the event Mr. Ashok Verma does not proceed with the matter, the petitioner should choose his nominee in terms of the second limb of the arbitration so also the respondent would do. When this was not done the petitioner has no right to proceed with the arbitration, as such the arbitration application is not maintainable. 6. As I have already stated that there is no dispute about the arbitration agreement. Only dispute is whether the petitioner has acted upon in terms of the arbitration agreement or not. I therefore set out the arbitration agreement being clause (11), which reads as follows: "Any dispute arising out of or in interpretation of the terms of this agreement or the work to be carried out as per the terms of this agreement shall be referred to the mutually acceptable Arbitrator.
I therefore set out the arbitration agreement being clause (11), which reads as follows: "Any dispute arising out of or in interpretation of the terms of this agreement or the work to be carried out as per the terms of this agreement shall be referred to the mutually acceptable Arbitrator. If the parties are not agreeable to the Sole Arbitrator, the party raising the dispute shall be entitled to nominate one Arbitrator and the other party shall be entitled to appoint another Arbitrator. In case of any dispute or difference of opinion among the Arbitrators, such question shall be referred to an Umpire, who shall be appointed by the consent of both the Arbitrators or failing such consent, the Society shall suggest any three names, who have been the Heads of the Department of Architecture or Civil Engineering working in any University or University College and the Company shall choose one of them as the Umpire. The Arbitrator shall enter arbitration within a period of one month of the reference and shall pass the Award within three months thereafter. Similarly, the Umpire shall commence the proceedings within one month of the proceedings and pass award within three months thereafter. The remuneration for Arbitrator shall be 1% of the value of the dispute or Rs. 1,00,000/- (Rupees one lakh only) per Arbitrator, whichever is higher. The remuneration shall be shared initially by both the parties, which shall be subject to the Award as to who has to bear and in what proportion. The venue of the arbitration shall Hyderabad and shall be subject to the jurisdiction of the Courts at Ranga Reddy District." 7. As it has been rightly said that to appoint Arbitrator there should be an agreement between the parties about choice of personnel. 8. Learned Counsel for the respondents says that Mr. Ashok Verma was chosen by the petitioner. 9. I have checked up the records. I am not able to find that the petitioner has referred the dispute to Mr. Ashok Verma or for that matter the respondents have not been able to satisfy me that they have also agreed to above appointment except making a statement in the counter-affidavit. 10.
Ashok Verma was chosen by the petitioner. 9. I have checked up the records. I am not able to find that the petitioner has referred the dispute to Mr. Ashok Verma or for that matter the respondents have not been able to satisfy me that they have also agreed to above appointment except making a statement in the counter-affidavit. 10. The statement in the counter-affidavit at the belated stage cannot be entertained by the Court unless it is supported by some document for the consensus to be arrived at by mutual consent recorded in a document, however, in this matter there is none. Moreover, as I noticed from a letter sent by Mr. Ashok Verma clarifying his position to the applicant that he was never appointed as an Arbitrator. No one agreed to the appointment of Ashok Verma, as such question of his acting as Arbitrator does not and cannot arise. I therefore set out the relevant portion of the aforesaid communication dated 19.8.2013: "With reference to your message, I wish to state that my role was purely voluntary as a well-wisher of both the parties i.e., BHEL (R & D) Employees' Cooperative Housing Society Limited and Cubix Ventures Private Limited. While I am not quite aware of the internal processes and proceedings of the R & D Housing Society, I clarify that I was not appointed as an Arbitrator by them or by any other agency." 11. The contents of the aforesaid letter have not been denied and disputed as to the correctness thereof. In that view of the matter, I hold that Mr. Ashok Verma was never appointed as an Arbitrator by the parties and the parties have not come to any solution and conclusion. Today, when the Court asked the parties to come to a consensus as to the appointment of sole Arbitrator, learned Counsel for the respondents, on instructions, says that he is not agreeable. 12. In these circumstances, the second limb of the arbitration has come into operation. Therefore, I allow the parties to choose their nominee Arbitrators within a period of two weeks from the date of receipt of this order. If any of the parties fail to nominate their Arbitrator, a retired Judge of this Court viz., Hon'ble Sri Justice Yethirajulu will be the second Arbitrator and both the joint Arbitrators shall enter upon the reference to adjudicate the disputes.
If any of the parties fail to nominate their Arbitrator, a retired Judge of this Court viz., Hon'ble Sri Justice Yethirajulu will be the second Arbitrator and both the joint Arbitrators shall enter upon the reference to adjudicate the disputes. In case of differences and disputes between them in terms of the arbitration agreement they will be free to choose an Umpire. In case of failure to appoint Umpire by the two Arbitrators, appointment of Umpire will be made in terms of Arbitration Agreement forthwith. 13. The learned Arbitrators shall fix their own remuneration upon deliberation and consultation with the parties. They will also estimate the cost and expenses for the secretarial assistance and other incidental expenditure of the arbitration proceedings. The parties will bear the expenses of the arbitration proceedings in equal share. I hope and desire that the learned Arbitrators will complete the arbitration proceedings by making and publishing an award within a period of five months from the date of entering upon the reference. The application is accordingly disposed of.