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2019 DIGILAW 433 (TS)

B. Girdapathi Reddy and Co. v. Madhucon Projects Ltd.

2019-12-03

A.RAJASEKHAR REDDY

body2019
ORDER : A. Rajasekhar Reddy, J. 1. This application is filed seeking appointment of an Arbitrator, in the place of 2nd respondent, to resolve the disputes between the applicant and the 1st respondent. 2. Brief facts of the case are as follows : The petitioner is a Partnership Firm, registered as Special Class Contractor with Government of Andhra Pradesh for executing the contract works in Mining & Irrigation Departments. The 1st respondent is a Company incorporated under the provisions of Companies Act, 1956 and also registered as Special Class & Category-I Contractors in Government of Andhra Pradesh (erstwhile Andhra Pradesh) and executing contract works of E.P.C (Engineering Procurement & Construction) and B.O.T (Build, Operate & Transfer). The 1st respondent was granted contract by the erstwhile Government of Andhra Pradesh through L.S. Agreement No. 78/2004-2005, dated 23.03.2005. Subsequently, the 1st respondent executed Piece Rate Contract Agreement (PRCA) dated 18.02.2006 in favour of the petitioner at Hyderabad in the office of the 1st respondent. The value of the contract is Rs. 70,68,60,000/-. Subsequently, differences arose between the petitioner and the 1st respondent, the 1st respondent terminated the contract on 08.02.2008 and further appointed a Sole Arbitrator i.e., 2nd respondent on 01.04.2009 and again on 27.04.2009 in pursuant to clause No. 21.3.1 in the agreement. Petitioner filed objections to the 2nd respondent on 28.07.2009. When the 2nd respondent was proceeding with the proceedings, petitioner filed OS No. 1153 of 2009 on the file of IV Additional Senior Civil Judge at City Civil Court, Hyderabad for declaring the impugned letters 01.04.2009 & 27.04.2009 appointing 2nd respondent as sole arbitrator. An injunction in IA No. 709 of 2009 was granted on 19.02.2010 against 2nd respondent. Aggrieved by the same, 1st respondent preferred CRP No. 3335 of 2010, which is allowed on 06.10.2010. Against the same, petitioner filed SLP No. 36520-36521/2010 before the Hon'ble Supreme Court. The Hon'ble Supreme Court declined to interfere in the matter. Subsequently, the suit was dismissed as infructuous on 24.01.2011, by referring the parties to arbitration U/s. 8 of Arbitration and Conciliation Act, 1996 (for short 'the Act of 1996') as per orders in CRP No. 3335 of 2010. The 2nd respondent directed the parties to hold its sitting on 25.03.2011 and the petitioner filed IA No. 2/2011 under Sections 12, 13 & 14 of the act of 1996 wherein the 1st respondent filed counter. The 2nd respondent directed the parties to hold its sitting on 25.03.2011 and the petitioner filed IA No. 2/2011 under Sections 12, 13 & 14 of the act of 1996 wherein the 1st respondent filed counter. After filing rejoinder by the petitioner on 31.03.2011, it was dismissed on 14.06.2011. The petitioner filed defence statement along with Counter Claim on 28.09.2011. Last meeting was held on 09.01.2013. Though the 2nd respondent directed the 1st respondent on 16.03.2013 for depositing of amounts towards fees and expenses, the 1st respondent failed to comply the said order. After lapse of 6½ years, the 2nd respondent addressed letter dated 20.06.2019 to the parties informing that the 1st respondent deposited Rs. 5.00 lakhs as part fees and Rs. 2.00 lakhs towards expenses and proposed to conduct meetings on 7th to 14th of July, 2019 and further stated in his e-mail dated 20.06.2019 that IA No. 10/2013 filed by the petitioner in 2013 would be heard. The petitioner submitted objections on 26.06.2019 stating that the mandate of Arbitrator shall terminate if he fails to act without undue delay as per Section 14(1)(a) of the Act of 1996 and that the 2nd respondent is not at liberty to condone the delay of 6½ years and to continue Arbitration proceedings without granting extension by the Civil Court, which had referred the parties to Arbitration under Section of 8 of the Act of 1996. Section 29(A) of the Act 3 of 2016 with effect from 23.10.2015 provides for time limits and the mandate of the Arbitrator shall stands terminated unless the court extends the period for the reasons mentioned in Sub-Section. The 2nd respondent, vide impugned letter dated 03.07.2019 rejected the objections of the petitioner. That the 1st respondent has no jurisdiction to impose a Sole Arbitrator of his choice, without complying the provisions of Sections 12, 13 and 14 of the Act. Hence, the present application is filed. 3. Counter affidavit is filed by the 1st respondent denying the averments in the affidavit filed in support of the Application stating that the present application is filed to delay the arbitration proceedings. The 2nd respondent was validly appointed by the 1st respondent by following the procedure. Hence, the present application is filed. 3. Counter affidavit is filed by the 1st respondent denying the averments in the affidavit filed in support of the Application stating that the present application is filed to delay the arbitration proceedings. The 2nd respondent was validly appointed by the 1st respondent by following the procedure. If any of the parties aggrieved by the appointment of the arbitrator in terms of the contract, they can move a petition under Section 13 of the Act of 1996 so also under Section 34 of the Act. Since the applicant had already filed an application under Section 13 of the Act, which was dismissed by the sole arbitrator, he cannot file an application under Section 11 of the Act. As per Section 29A of the Act, the mandate of the arbitrator shall terminate if an award is not passed within the 12 months period. It is stated that Section 26 of the Amendment Act provides that the application of the amendment will not have any retrospective effect on the arbitration proceedings that commenced before the amendment. The present arbitration proceedings commenced on 01.04.2009 i.e., much before the Amendment Act came into existence, as such, on this ground alone, this application is liable to be dismissed; that due to the inaction and multiple delays caused by the applicant, the contract was terminated in accordance with the procedure and subsequently, invoked the arbitration clause by appointing 2nd respondent. Since a challenge to an arbitrator by the applicant under Section 13 of the Act was dismissed by the Sole Arbitrator on 14.06.2011, the party challenging the arbitrator may make an application for setting aside the arbitral award under Section 34 of the Act. Section 29A of the Act is not applicable to the present arbitration proceedings as it was introduced vide the Amendment Act, which specifically states that it is prospective in nature. As the present arbitration proceedings commenced much prior to the enactment of the Amendment Act, the mandate of the sole arbitrator was not terminated and same is continued. It is stated that no court other than the Principal Civil Court of original jurisdiction in a district has jurisdiction to entertain an application and sought for dismissal of the application. 4. As the present arbitration proceedings commenced much prior to the enactment of the Amendment Act, the mandate of the sole arbitrator was not terminated and same is continued. It is stated that no court other than the Principal Civil Court of original jurisdiction in a district has jurisdiction to entertain an application and sought for dismissal of the application. 4. Rejoinder is filed by the applicant to the counter filed by the 1st respondent denying the averments in the counter stating that the party deposing to the counter affidavit has no proper authorization. The authorized representative of both the parties under litigation cannot be altered or substituted without following due process of law and that the representation for the 1st respondent through a different person other than the person representing in the arbitration proceedings, cannot be entertained. The petitioner never opposed the proposal of adjudication of disputes through arbitration, but the 2nd respondent tried to resume the arbitration proceedings after lapse of 6½ years and sent email only on 20.06.2019 about resumption of arbitration proceedings. The 2nd respondent failed to perform his functions as per the provisions of Section 14 of the Act and withdrew his office voluntarily in the middle of the proceedings due to non-payment of his fee. The appointment of 2nd respondent as Arbitrator is deemed to be terminated as per Section 15 (1)(a) of the Act. The 2nd respondent has voluntarily proceeded to resume the Arbitration proceedings without permission from the Court, which referred the parties to Arbitration under Section 8 of the Act. The 1st respondent had agreed to abide by a clause 21.3.2 in the PRCA, which states that in the event of any statutory modification or re-enforcement thereof and the rules made thereunder and for the time being in force shall apply to the conciliation and arbitration proceedings under this clause. The 2nd respondent had already invoked the modified provisions of Act, which came into force with effect from 23.10.2015 and fixed arbitration fees as per the IV Schedule of the Amended Act. 5. Heard Sri Ch. Purnachandra Rao, learned counsel for the applicant and Sri Avinash Desai, learned counsel for the 1st respondent. 6. Learned counsel for the applicant submits that there is an undue delay in completing the arbitration proceedings, as such, same shall stands terminated and fresh arbitrator needs to be appointed. 5. Heard Sri Ch. Purnachandra Rao, learned counsel for the applicant and Sri Avinash Desai, learned counsel for the 1st respondent. 6. Learned counsel for the applicant submits that there is an undue delay in completing the arbitration proceedings, as such, same shall stands terminated and fresh arbitrator needs to be appointed. He further submits that no extension of time was granted for completing the arbitral proceedings by the Civil Court. He also submits that by virtue of Sections 29A and 14(1)(a) of the Amended Act 3 of 2016, if the arbitral proceedings are not concluded within a period of twelve months, then the mandate of arbitrator shall stands terminated. He further submits that the provisions of Amendment Act 3 of 2016 are applicable to the pending arbitration proceedings, which commenced prior to the Amendment Act came into force i.e., prior to 23.10.2015. In support of his contention he relied on the judgments reported in Shailesh Dhairyawan v. Mohan Balkrishna Lulla (2016) 3 Supreme Court Cases 619 and NBCC Limited v. J.G. Engineering Private Limited (2010) 2 Supreme Court Cases 385. 7. On the other hand, learned counsel for the 1st respondent submits that since the fees and other expenses could not be paid by the 1st respondent to the 2nd respondent, the 2nd respondent failed to continue the arbitration proceedings and that since the 1st respondent paid the fees, the 2nd respondent-Arbitrator preceded with the arbitration proceedings; therefore, there is no undue delay in conducting the arbitration proceedings by the arbitrator. He also submits that the proper forum for termination of the mandate of the arbitrator is principal civil court of original jurisdiction, but no other court. He also submits that the Amendment Act has no application to the present case, since there is no subsequent agreement between the petitioner and the 1st respondent, making the Amendment Act applicable to the pending arbitration proceedings. In support of his contentions, he relied on the judgments reported in Antrix Corporation Limited v. Devas Multimedia Private Limited (2014) 11 Supreme Court Cases 560 and SP Singla Constructions Pvt. Ltd., v. State of Himachal Pradesh, Civil Appeal Nos.11824-11825 of 2018. 8. In support of his contentions, he relied on the judgments reported in Antrix Corporation Limited v. Devas Multimedia Private Limited (2014) 11 Supreme Court Cases 560 and SP Singla Constructions Pvt. Ltd., v. State of Himachal Pradesh, Civil Appeal Nos.11824-11825 of 2018. 8. In this case, it is to be seen that the 1st respondent was granted contract by the erstwhile Government of Andhra Pradesh through L.S. Agreement No. 78/2004-2005, dated 23.03.2005 for executing work of investigation, soil exploration, preparation of designs and drawings and estimates including construction of spillway of length 985.50m consisting of 48 vents each of size 16m x 15m on the right flank to discharge 36 cusecs with FRL at 45.72m for Indira Sagar Project across river Godavari at Ramayyapet village in West Godvari District. An agreement i.e., Piece Rate Contract Agreement (PRCA) dated 18.02.006 was entered into by the 1st respondent with the petitioner at Hyderabad. The value of the contract is Rs. 70,68,60,000/-. Due to differences between the petitioner and the 1st respondent, the latter terminated the contract on 08.02.2008 and appointed a Sole Arbitrator i.e., 2nd respondent on 01.04.2009 and again on 27.04.2009 in terms of clause 21.3.1 of the agreement. The petitioner filed objections to the 2nd respondent on 28.07.2009 and subsequently filed OS No. 1153 of 2009 on the file of IV Additional Senior Civil Judge, City Civil Court for challenging the impugned proceedings appointing arbitrator i.e., 01.04.2009 & 27.04.2009 along with IA No. 709 of 2009, which was allowed on 19.02.2010 granting injunction against 2nd respondent not to proceed further in the matter. Aggrieved by the same, the 1st respondent filed CRP No. 3335 of 2010, which was allowed by this Court on 06.10.2010. Though the petitioner carried the matter to the Hon'ble Supreme Court, by way of SLP No. 36520-36521/2010, the Hon'ble Supreme Court declined to interfere in the matter and subsequently, the suit filed by the petitioner was dismissed as infructuous on 24.01.2011, by referring the parties to arbitration under Section 8 of the Act of 1996. An application filed by the petitioner in IA No. 2 of 2011 under Sections 12, 13, & 14 of the Act of 1996, was dismissed by the 2nd respondent on14.06.2011. An application filed by the petitioner in IA No. 2 of 2011 under Sections 12, 13, & 14 of the Act of 1996, was dismissed by the 2nd respondent on14.06.2011. Subsequently, the petitioner also filed defence statement along with counter claim on 28.09.2011 and the 2nd respondent conducted proceedings on 09.01.2013, wherein he directed the 1st respondent to deposit amounts towards fees and expenses on 16.03.2013. However, the 2nd respondent addressed letter dated 20.06.2019 to the parties stating that the 1st respondent had deposited amounts towards fees and expenses and he proposed to conduct meetings between 07.07.2019 to 14.07.2019. 9. Learned counsel for the petitioner vehemently contended that since there is an undue delay of 6½ years in concluding the arbitral proceedings by the 2nd respondent-sole arbitrator, his mandate terminates in view of Section 14(1)(a) of the Act of 1996 and that 2nd respondent cannot condone the delay of 6½ years and continue the proceedings after lapse of 6½ years, without granting extension of time by the Civil Court. He submits that Section 29A of the Amended Act 3 of 2016, which came into effect from 23.10.2015, provides that the award shall be made within a period of 12 months from the date the arbitral tribunal enters upon the reference. 10. Per contra, learned counsel for the 1st respondent submits that there is no undue delay in conducting the arbitral proceedings and that Section 29A of the Amendment Act 3 of 2016 has no application to the present arbitral proceedings, which is only prospective in nature and is applicable to the arbitral proceedings commenced after enactment of Act 3 of 2016 and that this Court has no jurisdiction to entertain this application, except the civil Court of original jurisdiction. 11. A perusal of the averments in the counter affidavit filed by the 1st respondent goes to show that there is no plausible explanation from the 1st respondent, for delay in conducting the arbitral proceedings. In fact, in the counter affidavit filed by the 1st respondent, it is categorically stated that they could not pay the fees and other expenses to the 2nd respondent and same was paid only in the year 2019. 12. In fact, in the counter affidavit filed by the 1st respondent, it is categorically stated that they could not pay the fees and other expenses to the 2nd respondent and same was paid only in the year 2019. 12. Under sub-section (1) of Section 14 of the Act, 1996, the mandate of an Arbitrator shall be terminated 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. Under sub-section (2), if a controversy remains concerning any of the grounds referred to in clause (a) of subsection (1) of Section 14, a party may, unless otherwise agreed by the parties, apply to the Court to decide on the termination of the mandate. 13. The word "Court" has been defined under Section 2(1) (e) (i) of the Act, 1996, which reads as under: "(e) "Court" means-(i) in the case of an arbitration other than international commercial arbitration, 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, or any Court of Small Causes;" 14. A conjoint reading of the provisions contained in Section 14(2) and Section 2(1) (e) (i) of the Act, 1996, would manifest that a prayer for termination of mandate would lie before the Principal Civil Court of original jurisdiction or with the High Court where the High Court is exercising ordinary original civil jurisdiction. In this case, as already stated supra, the arbitral proceedings commenced on 27.04.2009 and last meeting was held on 09.01.2013. The 2nd respondent resumed the proceedings only on 20.06.2019 after paying fees and expenses by the 1st respondent. Therefore, the contention of the learned counsel for the 1st respondent that except principal civil Court of original jurisdiction, no other court can have jurisdiction to entertain an application, cannot be accepted. 15. In Union of India v. Uttar Pradesh State Bridge Corporation Limited (2015) 2 Supreme Court Cases 52, the Hon'ble Supreme Court held as follows: "12. Therefore, the contention of the learned counsel for the 1st respondent that except principal civil Court of original jurisdiction, no other court can have jurisdiction to entertain an application, cannot be accepted. 15. In Union of India v. Uttar Pradesh State Bridge Corporation Limited (2015) 2 Supreme Court Cases 52, the Hon'ble Supreme Court held as follows: "12. As is clear from the reading of Section 14, when there is a failure on the part of the Arbitral Tribunal to act and it is unable to perform its function either de jure or de facto, it is open to a party to the arbitration proceedings to approach the court to decide on the termination of the mandate. Section 15 provides some more contingencies when mandate of an arbitrator can get terminated. In the present case, the High Court has come to a categorical finding that the Arbitral Tribunal failed to perform its function, and rightly so. It is a clear case of inability on the part of the members of the Tribunal to proceed in the matter as the matter lingered on for almost four years, without any rhyme or justifiable reasons. The members did not mend their ways even when another life was given by granting three months to them. Virtually a peremptory order was passed by the High Court, but the Arbitral Tribunal remained unaffected and took the directions of the High Court in a cavalier manner. Therefore, the order of the High Court terminating the mandate of the Arbitral Tribunal is flawless. This aspect of the impugned order [U.P. State Bridge Corpn. Ltd. v. Union of India, (2011) 108 AIC 676] is not even questioned by the appellant at the time of hearing of the present appeal. However, the contention of the appellant is that even if it was so, as per the provisions of Section 15 of the Act, substitute arbitrators should have been appointed "according to the rules that were applicable to the appointment of the arbitrator being replaced". On this basis, it was the submission of Mr. Mehta, learned ASG, that the High Court should have resorted to the provision contained in Clause 64 of GCC." 16. In NBCC Limited v. J.G. Engineering Private Limited (supra), the Hon'ble Supreme Court held as follows: "14. Arbitration is an efficacious and alternative way of dispute resolution between the parties. On this basis, it was the submission of Mr. Mehta, learned ASG, that the High Court should have resorted to the provision contained in Clause 64 of GCC." 16. In NBCC Limited v. J.G. Engineering Private Limited (supra), the Hon'ble Supreme Court held as follows: "14. Arbitration is an efficacious and alternative way of dispute resolution between the parties. There is no denying the fact that the method of arbitration has evolved over the period of time to help the parties to speedily resolve their disputes through this process and in fact the Act recognises this aspect and has elaborate provisions to cater to the needs of speedy disposal of disputes. The present case illustrates that in spite of adopting this efficacious way of resolving the disputes between the parties through the arbitration process, there was no outcome and the arbitration process had lingered on for a considerable length of time which defeats the notion of the whole process of resolving the disputes through arbitration. The contention of the appellant therefore cannot be justified that since the dispute was highly technical in nature, it had to be dealt with elaborately by the arbitrator and thus, he was justified in being late. The High Court had thus correctly fixed the time for the arbitration to be concluded within a period of six months from the appointment of the fourth arbitrator Shri A.K. Gupta considering the time that had been spent for the arbitration process prior to Mr. Gupta's appointment." 17. In the instant case, the arbitral proceedings commenced in the year 2009, conducted till the year, 2013, but the same were again resumed only in the year 2019 i.e., after lapse of more than 6½ years. Admittedly, the 2nd respondent-sole arbitrator was appointed by the 1st respondent and the same could not be proceeded with, due to non payment of fees and other expenses by the 1st respondent, which obviously goes to show that the 1st respondent deliberately delayed the proceedings and the 2nd respondent-sole arbitrator could not complete the arbitral proceedings, within a reasonable time. Though there is no time limit prescribed in the agreement between the parties for conclusion of the arbitral proceedings, since arbitration is an efficacious and alternative way of dispute resolution between the parties, the same cannot be prolonged for an extended period of time. Though there is no time limit prescribed in the agreement between the parties for conclusion of the arbitral proceedings, since arbitration is an efficacious and alternative way of dispute resolution between the parties, the same cannot be prolonged for an extended period of time. In the instant case, though almost nine years lapsed, the same could not be concluded. In view of the principle laid down in the aforesaid judgment, this Court is of the considered opinion that the 2nd respondent failed to complete the arbitral proceedings without undue delay, as such, his mandate is liable to be terminated and accordingly, terminated. 18. As far as applicability of Section 29A of the Act of 2015 is concerned, it is the contention of the learned counsel for the petitioner that as per Clause 21.3.2 "Subject to the aforestated conditions, the provisions of the Arbitration and Conciliation Act, 1996 or any statutory modification or re-enactment thereof and the rules made thereunder and for the time being in force shall apply to the conciliation and arbitration proceedings under this clause" Amendment Act, 2015 is applicable to the arbitral proceedings commenced prior to the Amendment Act came into force. For better appreciation, the Clause 21.3.1 & 21.3.2 of the agreement is reproduced as under: "21.3.1: If the efforts to resolve all or any of the dispute through conciliation fails, such dispute shall be referred to the sole Arbitrator to be appointed by the Managing Director, Madhucon. There shall be no objection to the PRC if the sole Arbitrator so appointed is an employee of Madhucon. In case the Arbitrator so appointed is unable to act for any reason, Managing Director of Madhucon in the event of such inability, shall appoint another person to act as an Arbitrator in accordance with the terms of the contract. Such persons shall be entitled to proceed with reference from the stage at which it was left incomplete by his predecessor. 21.3.2: Subject to the aforestated conditions, the provisions of the Arbitration and Conciliation Act, 1996 or any statutory modification or re-enactment thereof and the rules made thereunder and for the time being in force shall apply to the conciliation and arbitration proceedings under this clause." 19. The Hon'ble Supreme Court in the case of SP Singla Constructions Pvt. Ltd., v. State of Himachal Pradesh (supra) held as follows: "15. The Hon'ble Supreme Court in the case of SP Singla Constructions Pvt. Ltd., v. State of Himachal Pradesh (supra) held as follows: "15. Considering the facts and circumstances of the case, we are not inclined to go into the merits of this contention of the appellant nor examine the correctness or otherwise of the above view taken by the Delhi High Court in Ratna Infrastructure Projects case; suffice it to note that as per Section 26 of the Arbitration and Conciliation (Amendment) Act, 2015 the provisions of the Amendment Act, 2015 shall not apply to the arbitral proceedings commenced in accordance with the provisions of Section 21 of the Principal Act before the commencement of the Amendment Act unless the parties otherwise agree." 16. In Board of Control for Cricket in India v. Kochi Cricket Private Limited and others, (2018) 6 SCC 287 , this Court has held that the provisions of Amendment Act, 2015 (with effect from 23.10.2015) cannot have retrospective operation in the arbitral proceedings already commenced unless the parties otherwise agree and held as under:- "37. What will be noticed, so far as the first part is concerned, Which states- "26. Act not to apply to pending arbitral proceedings: Nothing contained in this Act shall apply to the arbitral proceedings commenced, in accordance with the provisions of Section 21 of the Principal Act, before the commencement of this Act unless the parties otherwise agree.." Is that : (1) "the arbitral proceedings" and their commencement is mentioned in the context of Section 21 of the principal Act; (2) the expression used is "to" and not "in relation to", and (3) parties may otherwise agree. So far as the second part of Section 26 is concerned, namely, the part which reads, "..but this Act shall apply in relation to arbitral proceedings commenced on or after the date of commencement of this Act" makes it clear that the expression "in relation to" is used; and the expression "the" arbitral proceedings and "in accordance with the provisions of Section 21 of the principal Act" is conspicuous by its acceptance." 20. In the instant case, the arbitration proceedings commenced in the year 2009, much prior to the enactment of Amendment Act, 2015 under Section 21 of the Principal Act. Admittedly, there is no subsequent agreement between the parties for the applicability of the Amendment Act, 2015. 21. In the instant case, the arbitration proceedings commenced in the year 2009, much prior to the enactment of Amendment Act, 2015 under Section 21 of the Principal Act. Admittedly, there is no subsequent agreement between the parties for the applicability of the Amendment Act, 2015. 21. As rightly contended by the learned counsel for the 1st respondent, in view of principle of law laid down in the aforesaid decision, unless there is an agreement between the parties with regard to applicability of the Amendment Act, the same will not be applicable to the pending arbitration proceedings. Though clause 21.3.2 provides for subsequent modifications and re-enactment of the Act apply to the pending arbitration proceedings, but there is no agreement between the parties to that effect, subsequent to the Amendment Act. In view of the same, this Court is of the opinion that the provisions of the Amendment Act does not apply to the proceedings. 22. It is next contended by the learned counsel for the petitioner that the 2nd respondent-sole arbitrator fixed arbitration fees as per the fourth schedule of the Act 3 of 2016, as such, the 1st respondent cannot contend that the Amendment Act, which came into effect from 23.10.2015 has no application. There is some force in the contention of the learned counsel for the petitioner. Since the 1st respondent strenuously contended that the Amendment Act 3 of 2016 has no application to the arbitral proceedings commenced prior to 23.10.2015 as it has prospective effect, the 2nd respondent cannot collect the fees by invoking fourth schedule of the Act 3 of 2016. 23. Section 11 of the Act of 1996 provides for appointment of an arbitrator. Clause (a) of sub-Section 6 of Section provides that where, under an appointment procedure agreed upon by the parties, and a party fails to act as required under that procedure, a party may request the Supreme Court, or, as the case may be, the High Court or any person or institution designated by such Court to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment. 24. In Union of India v. Uttar Pradesh State Bridge Corporation Limited (supra), the Hon'ble Supreme Court held as follows: "19. 24. In Union of India v. Uttar Pradesh State Bridge Corporation Limited (supra), the Hon'ble Supreme Court held as follows: "19. The appointment of the arbitrator by the Court, of its own choice, departing from the arbitration clause, is therefore not unknown and has become an acceptable proposition of law which can be termed as a legal principle which has come to be established by a series of judgments of this Court. Reasons for debating such a course of action are not far to seek and already taken note of above. 20. In the present case, we find the fact situation almost same as in Tripple Engg. Works [North Eastern Railway v. Tripple Engg. Works, (2014) 9 SCC 288 : (2014) 5 SCC (Civ) 30] and Singh Builders Syndicate [Union of India v. Singh Builders Syndicate, (2009) 4 SCC 523 : (2009) 2 SCC (Civ) 246]. If the contention of the appellant is allowed, it would amount to giving premium to the appellant for the fault of the Arbitral Tribunal's members who were appointed by none else but by the appellant itself. As pointed above, the appellant has not questioned the order of the High Court insofar as it has terminated the mandate of the earlier Arbitral Tribunal because of their inability to perform the task assigned to them. In such a situation, leaving the respondent at the mercy of the appellant thereby giving the power to the appellant to constitute another Arbitral Tribunal would amount to adding insult to the serious injury already suffered by the respondent because of non-conclusion of the arbitral proceedings even when the dispute was raised in the year 2007. In case, the cherished and benevolent purpose and objective of speedy resolution of the disputes by arbitral proceedings is to be accomplished, it becomes the bounden duty of the persona designata to appoint such arbitrators who have sufficient time at their disposal to attend to this task assigned to them and to conclude the arbitral proceedings in a speedy manner. It is a common sight that the officers who are awfully busy in their other routine functions, because of their status and position, are made arbitrators. For them, discharge of their other duties assumes more importance (and naturally so) and their role as the arbitrators takes a back seat. It is a common sight that the officers who are awfully busy in their other routine functions, because of their status and position, are made arbitrators. For them, discharge of their other duties assumes more importance (and naturally so) and their role as the arbitrators takes a back seat. This kind of behaviour showing casual approach in arbitration cases is anathema to the very genesis of arbitration. Therefore, where the Government assumes the authority and power to itself, in one-sided arbitration clause, to appoint the arbitrators in the case of disputes, it should be more vigilant and more responsible in choosing the arbitrators who are in a position to conduct the arbitral proceedings in an efficient manner, without compromising with their other duties. Time has come when the appointing authorities have to take call on such aspects failing which (as in the instant case), Courts are not powerless to remedy such situations by springing into action and exercising their powers as contained in Section 11 of the Act to constitute an Arbitral Tribunal, so that interest of the other side is equally protected." 25. In the instant case, as per clause 21.3.1 of the agreement between the parties, the sole arbitrator-2nd respondent was appointed by the 1st respondent, who is none other than the employee of the 1st respondent. As already stated supra, since the mandate of the 2nd respondent-sole arbitrator terminated, if the 1st respondent is allowed to appoint another arbitrator in the place of 2nd respondent, it would amount to condoning the delay in completing the arbitral proceedings by the 2nd respondent, who was appointed by none else but by the 1st respondent himself. As already stated supra, the petitioner has no objection with regard to the appointment of sole arbitrator-2nd respondent, by the 1st respondent, but because of his inability to conclude the arbitral proceedings without undue delay. In such circumstances, leaving the petitioner at the mercy of the 1st respondent thereby giving the power to the him to constitute another arbitrator, would amount to adding insult to the serious injury already suffered by the petitioner because of non-conclusion of the arbitral proceedings even when the dispute was raised in the year 2009. In such circumstances, leaving the petitioner at the mercy of the 1st respondent thereby giving the power to the him to constitute another arbitrator, would amount to adding insult to the serious injury already suffered by the petitioner because of non-conclusion of the arbitral proceedings even when the dispute was raised in the year 2009. In view of the foregoing discussion, since the mandate of the 2nd respondent-sole arbitrator terminates, Sri Justice Madan B. Lokur, former Judge, Supreme Court of India, is appointed as sole arbitrator to resolve the dispute between the applicant and the 1st respondent, from the date of receipt of a copy of this order. Accordingly, this application is allowed. There shall be no order as to costs. As a sequel thereto, miscellaneous petitions, if any, shall stands closed.