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2014 DIGILAW 889 (MP)

Mohan Agrawal Construction v. Union of India

2014-07-24

PRAKASH SHRIVASTAVA

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Judgment Prakash Shrivastava, J.:- 1. This application under Section 11(6) read with Section 15(2) of the Arbitration and Conciliation Act, 1996 (for short "the Act") has been filed for appointment of the substitute arbitrator. In brief, the case of the applicant is that an agreement was entered into between the parties for the construction work. Since the dispute had arisen between the parties, therefore, in terms of the arbitration clause, the sole arbitrator was appointed and the arbitration proceedings had started but the sole arbitrator Shri A.P. Singh had resigned on 28.6.2010, therefore, the substitute arbitrator be appointed under Section 15(2) of the Act. 2. The respondents have filed their reply raising the plea that the substitute arbitrator has already been appointed in terms of the arbitration clause and the arbitration proceedings before the substitute arbitrator are in progress, therefore, nothing survives in the present application. 3. Learned counsel appearing for the applicant submits that the agreement does not provide for appointment of the substitute arbitrator and that the substitute arbitrator has been appointed after filing of the present application, therefore, right to appoint substitute arbitrator does not survive in view of the judgment of the Supreme Court in the matter of Bharat Sanchar Nigam Ltd. & Anr. Vs. Dhanurdhar Champtiray reported in 2010 AIR SCW 311. 4. As against this counsel for the respondent has submitted that there is specific provision in the agreement for appointment of the substitute arbitrator and, therefore, the applicant has no case. 5. I have heard the learned counsel for the parties and perused the record. 6. It is undisputed that in terms of the arbitration clause in the agreement Shri A.P. Singh was appointed as the sole arbitrator. The reply filed by the respondents reveals that Shri A.P. Singh had resigned on 28.6.2010 and thereafter Mr. Divakar Garg was appointed as sole arbitrator on 19.8.2010. The present application for appointment of substitute arbitrator was filed at that stage on 9.8.2010 but much water has flown thereafter. The substitute arbitrator Mr. Divakar Garg had resigned on 23.5.2011 and another substitute arbitrator Mr. Rajeev Kumar has been appointed on 14.10.2011. 7. The Clause 25(ii) of the agreement which has been quoted by the respondents in their reply providing for appointment of the substitute arbitrator has not been disputed by counsel for the applicant. The substitute arbitrator Mr. Divakar Garg had resigned on 23.5.2011 and another substitute arbitrator Mr. Rajeev Kumar has been appointed on 14.10.2011. 7. The Clause 25(ii) of the agreement which has been quoted by the respondents in their reply providing for appointment of the substitute arbitrator has not been disputed by counsel for the applicant. The said clause reads as under: "25(ii) Except where the decision has become final, binding and conclusive in terms of Sub Para (i) above, disputes or differences shall be referred for adjudication through arbitration by a sole arbitrator appointed by the Chief Engineer, CPWD, in charge of the work or if there be no Chief Engineer, the Additional Director General of the concerned region of CPWD or if there be no Additional Director General, the Director General of Works, CPWD. If the arbitrator so appointed is unable or unwilling to act or resigns his appointment or vacates his office due to any reason whatsoever, another sole arbitrator shall be appointed in the manner aforesaid. Such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor." 8. The respondents have acted in accordance with the said clause and have appointed the substitute arbitrator. It is also not disputed by counsel for the applicant that the proceedings are in progress before the said substitute arbitrator. 9. Counsel for the applicant has placed reliance upon the judgment of the Supreme Court in the matter of Bharat Sanchar Nigam Ltd. (supra) wherein referring to Section 11(5) of the Act, the Supreme Court has taken the view that if one party demands for appointment of an arbitrator and other party does not appoint any Arbitrator within thirty days of such demand, the right to make appointment of an arbitrator is not forfeited but continues, but such appointment should be made before the other party files application under Section 11. The present case relates to appointment of the substitute arbitrator. It is also not the applicant's case that inspite of the demand by the applicant for appointment of the substitute arbitrator, no substitute arbitrator was appointed within 30 days of the demand. The said judgment of the Supreme Court thus stands on different footing. The present case relates to appointment of the substitute arbitrator. It is also not the applicant's case that inspite of the demand by the applicant for appointment of the substitute arbitrator, no substitute arbitrator was appointed within 30 days of the demand. The said judgment of the Supreme Court thus stands on different footing. Even otherwise in terms of the judgment of the Supreme Court, the emphasis is on the terms of the agreement being adhered to and/or given effect as closely as possible. Thus in the circumstances of the case I am of the opinion that no case for appointment of any sole substitute arbitrator under Section 11(6) read with Section 15(2) of the Act by this Court is made out. Arbitration case is accordingly rejected.