Manish Engineering Enterprises v. Indian Farmers Fertilizers Corporative Ltd.
2018-11-26
SAUMITRA DAYAL SINGH
body2018
DigiLaw.ai
JUDGMENT : Saumitra Dayal Singh, J. 1. The present application has been filed describing it as one under section 11 of the Act. By this application, the applicant seeks appointment of the substitute independent arbitrator to decide the dispute that had arisen between the applicant and the opposite parties with respect to a work order No. 43/82520/P1/2694-B1/9802362 dated 12.1.1999. 2. Undisputedly, earlier this Court had appointed an arbitrator under section 11 of the Act by 16.3.2007 passed in Arbitration Case No. 32 of 2005 which stood disposed of by that order. 3. It is the case of the petitioner that the arbitration proceedings dragged but that the award could not be pronounced. In such circumstances, an application was filed on 31.10.2015 requesting the arbitrator to withdraw from the proceedings. While certain other facts have been stated in that application, the same are not being noted in view of the order that was passed by the arbitrator. On 7th November, 2015 the learned arbitrator was refused from the arbitration proceedings by the following order: "The applicant-petitioner and opposite parties took adjournments after adjournment. The proceedings remained suspended for more than four years from 20th January, 2011 to 17th May, 2015 under section 38(2) of Arbitration and Conciliation Act, 1996 for non-payment of Arbitrators fee by applicant-petitioner. The applicant-petitioner filed written arguments of about 582 pages beside oral arguments. The Award was reserved on 19th July, 2015. Now the applicant-petitioner desires not to participate in arbitration and desires, in effect, release from arbitration. He has filed application for release of arbitration proceedings. I withdraw myself as Arbitrator and release present arbitration proceedings. Accordingly the arbitration petition is permitted to be withdrawn as released." 4. Relying on section 15(2) of the Act, submission has been advanced that once the arbitrator had thus withdrawn, a fresh arbitrator has to be necessarily appointed. 5. It is thus submitted that the learned arbitrator having withdrawn from the proceedings, it is now for this Court to exercise its power under section 11 of the Act and appoint a fresh arbitrator. For such prayer the present application has been filed. 6. Sri V.R. Agarwal, learned Counsel for the respondents has opposed the application on two grounds : First, it has been submitted, the arbitrator was forced to withdraw from the proceedings in view of the conduct offered by the applicant.
For such prayer the present application has been filed. 6. Sri V.R. Agarwal, learned Counsel for the respondents has opposed the application on two grounds : First, it has been submitted, the arbitrator was forced to withdraw from the proceedings in view of the conduct offered by the applicant. He therefore submits that the present application is not maintainable. 7. Second, it has been submitted, even if the present application were to be held maintainable, due to the procedure prescribed under section 11 of the Arbitration and Conciliation Act, 1996, hereinafter referred to as the Act, would have to be necessarily followed. Inasmuch as no notice has been issued to the respondents upon the learned arbitrator having withdrawn and the present application having been filed directly seeking appointment of the arbitrator, the same is not maintainable, inasmuch as, the valuable right of the respondents to object to the arbitration sought and in the alternative to appoint an arbitrator of its own has been foreclosed. 8. Having considered the argument so advanced by the learned Counsel for the parties, in the first place, it is difficult to hold the arbitration proceedings stood terminated on merits, inasmuch as, the order passed by the learned arbitrator does not indicate that he had terminated the proceedings on merits. 9. Perusal of the order as quoted above clearly indicates that the learned Arbitrator chose to recuse himself in view of the application filed by the applicant. 10. That being the position of fact, the legal consequence is well taken care of by the provisions of section 15(1) read with section 2 of the Act which provides, where the Arbitrator withdraws from office for any reason a substitute arbitrator should be appointed according to the Rules that were applicable to the appointment of the arbitrator being replaced. 11. Therefore in the first place a substitute arbitrator may be appointed in view of the clear provisions of law in that regard. Second as to the procedure to be followed, again there is no doubt that it would have to remain the same as had been followed at the time of the appointment of the arbitrator who has recused himself. 12.
Second as to the procedure to be followed, again there is no doubt that it would have to remain the same as had been followed at the time of the appointment of the arbitrator who has recused himself. 12. Thus in the facts of the present case, it being admitted that no fresh notice was issued by the applicant to the respondents in terms of the procedure that had been invoked and applied for the purpose of appointment of the earlier arbitrator, the present application filed directly is not maintainable. 13. If such a procedure had been adopted, the respondents could have a right to object to the fresh arbitration being sought and in the alternative it may have chosen to appoint an arbitrator of its choice, that being permissible under section 11 of the Act. 14. Thus the present application is not maintainable. 15. The present petition, is accordingly, dismissed leaving it open to the petitioner to adopt the procedure under section 11 of the Act to the extent, it may be available.