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Tripura High Court · body

2021 DIGILAW 143 (TRI)

Ashes Deb, Contractor v. State of Tripura

2021-08-27

AKIL KURESHI

body2021
ORDER 1. The petitioner seeks appointment of an arbitrator to resolve disputes between the petitioner-contractor and the respondents-Government department arising out of the order number F.10(178)/EE/KD/2823-838 dated 21st November 2017. 2. Petitioner is a contractor and was awarded a work order by the Government. During the course of execution of the work, disputes have arisen between the parties. The contract undisputedly contained an arbitration clause. The petitioner having issued a notice to the Government for appointment of an arbitrator and when such request was not accepted, has filed this petition. 3. The respondents have appeared and filed reply mainly opposing the different claims made by the petitioner as also the petitioner's averments on merits of such claims. However, such affidavit does not contain any ground for opposing the appointment of an arbitrator. 4. In the present petition for appointment of arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, the Court would not be concerned with the merits or demerits of the claims of the petitioner which would be the subject matter before the arbitrator when appointed. Only inquiry before me would be whether the contract contains an arbitration clause, whether arbitrable disputes have arisen and the petitioner has followed the procedure provided under the Act before filing this petition for appointment of an arbitrator. When answers to all these questions are in the affirmative, there is a need for appointment of an arbitrator. 5. Considering facts of the case, I request Mr. S Sikdar, former District Judge of Tripura, to act as a sole arbitrator to resolve disputes between the parties arising out of the work order in question. 6. At this stage, learned senior counsel Mr. Somik Deb requested that only the claims of the petitioner be referred for arbitration. He submitted that since it is the contractor who has filed this petition for appointment of an arbitrator, only his disputes should be arbitrated. In other words, according to him, Government counter-claims would be barred and that I should so clarify in this order. In support of his request, he relied on the following decisions: 7. In case of M/s Punj Sons Pvt. Ltd. Vs. National Aluminium Company Ltd. and Anr. reported in AIR 1999 SC 1547 in which I only find that the defendant in an arbitration claim had first raised the counter-claim without there being any reference. In support of his request, he relied on the following decisions: 7. In case of M/s Punj Sons Pvt. Ltd. Vs. National Aluminium Company Ltd. and Anr. reported in AIR 1999 SC 1547 in which I only find that the defendant in an arbitration claim had first raised the counter-claim without there being any reference. The arbitrator held a belief that the same would not be maintainable. The remedy for the defendant would be to raise independent arbitration and both arbitration proceedings can be heard together. This view of the arbitrator was approved by the Supreme Court. 8. Counsel also relied on a decision in case of Booz Allen and Hamilton INC. Vs. SBI Home Finance Limited and Ors. reported in (2011) 5 SCC 532 in which the Supreme Court in the context of the term 'arbitrability' observed that an element whether the parties have referred the disputes to arbitration is also touching the question of the arbitrability. It was observed that whether the disputes fall under the scope of submission to arbitral tribunal or whether they do not arise out of statement of claim and counter-claim filed before the arbitral tribunal would make them non- arbitrable. This judgment again does not support the submission of the counsel for the petitioner that in a petition filed by the contractor for appointment of an arbitrator, the counter-claim of the opponent must be barred. 9. On the other hand, we may refer to two decisions of the Supreme Court which, in my opinion, throw some light on the controversy raised by the counsel for the petitioner. 10. In case of Selvi and Ors. Vs. State of Karnataka & Anr.., reported in (2010) 2 SCC 581, the Court considered two different situations. Situation (a) there 'all disputes' are referred to the arbitrator and a situation (b) there 'specific disputes enumerated only' are referred to arbitration. It was held that in situation (a), prior notice is not required when all disputes are referred to arbitrator or are contemplated by the arbitration clause and the arbitrator is empowered to decide all disputes raised in the proceedings i.e both the claims and counter-claims, if all disputes are referred. It was observed that the assumption that the arbitrator can decide only disputes raised by the applicant under Section 11 application and not the counter-claims of the respondents, is without basis. 11. In case of Voltas Ltd. Vs. It was observed that the assumption that the arbitrator can decide only disputes raised by the applicant under Section 11 application and not the counter-claims of the respondents, is without basis. 11. In case of Voltas Ltd. Vs. Rolta India Ltd., reported in (2014) 4 SCC 516 the Supreme Court referring to and relying upon the decision in case of Praveen Enterprises(supra) observed that general rule is that the date on which counter-claim is made by the respondent before the arbitrator will be the date of its institution. However, this general rule would have an exception where the respondent against whom a claim is made and had also made a claim against the claimant and sought arbitration by serving a notice to the claimant but subsequently raised such a claim as a counter-claim in the arbitration proceedings which initiated by the claimant instead of filing separate application under Section 11, then the limitation for such counterclaim should be computed with reference to the date of service of notice of such claim on the claimant and not with the reference to the date of filing of the counter-claim before the arbitrator. 12. There is no statutory bar on allowing entertainment of a counterclaim of the respondent by the arbitrator who is appointed in a petition under Section 11(6) of the Act. The legal position emerging from the above two decisions is that when an arbitrator is appointed under Section 11(6) of the Act who is requested to decide all disputes, the arbitrator would be authorized to decide the claim of the petitioner as well as the counter-claim of the respondent, if so raised. 13.The contention of the senior counsel for the petitioner that the arbitrator who is appointed under Section 11(6) of the Act on a petition filed by the contractor is debarred from entertaining the counter-claim is thus not valid. There is neither any fetter on powers of the Court while making appointment under Section 11(6) of the Act to require the arbitrator to decide both the claims and the counter-claims. Nor, in facts, senior counsel for the petitioner has made out any case for issuing any direction to the contrary. There is neither any fetter on powers of the Court while making appointment under Section 11(6) of the Act to require the arbitrator to decide both the claims and the counter-claims. Nor, in facts, senior counsel for the petitioner has made out any case for issuing any direction to the contrary. While disposing of this petition, it is thus clarified that the arbitrator will be authorized to entertain the petitioner's claim as well as the counter-claim of the respondents raised, subject of course to all legal questions and opposition by the petitioner. 14. Arbitration petition is disposed of accordingly. Pending application(s), if any, also stands disposed of.