M/s Nice International Ltd. , Formerly Nice Diesel Engines Pvt. Ltd. , v. Bharat Sanchar Nigam Limited
2025-02-21
SUDESH BANSAL
body2025
DigiLaw.ai
ORDER : 1. Instant arbitration application under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (for short "A&C Act") has been filed by the petitioner, praying to annul the appointment of sole Arbitrator Mr. Sanjeev Singhvi, appointed by the respondent and to appoint a neutral and impartial Arbitrator to adjudicate the claims of petitioner. 2. Heard learned counsel for both parties and perused the record. 3. It appears from the record that four Master Rate Contract Agreements (for short “the Master Agreements”) in the year 2009-10 were entered into and executed between the petitioner and respondent whereby and whereunder petitioner agreed with the respondent to provide comprehensive maintenance and operation under BSNL, Electrical Division Udaipur and Kota of Rajasthan Telecom Circle and on raising a dispute by the petitioner, sole Arbitrator Mr. Sanjeev Singhvi was appointed by the respondent, following the procedure of appointment of Arbitrator envisaged under Clause 25 of BSNL Master Rate Contract Agreements. The first hearing of arbitration proceedings before the sole Arbitrator of Mr. Sanjeev Singhvi took place on 03.12.2012 which has been placed on record by the respondent with reply to the arbitration application as Annexure-R/2. A perusal of proceedings dated 03.12.2012 goes to show that petitioner accepted the appointment of Mr. Sanjeev Singhvi as a sole Arbitrator and submitted to his jurisdiction by participating in the arbitration proceedings for adjudication of its claims. 4. It appears that during the ongoing proceedings of arbitration before the sole Arbitrator Mr. Sanjeev Singhvi, petitioner raised some additional dispute/ claim through letter dated 18.11.2014 and requested the respondent to appoint Arbitrator, whereupon the respondent proposed to appoint new Arbitrator but petitioner through its letter dated 20.02.2015, requested the respondent to refer the additional dispute/ claim to the erstwhile appointed Arbitrator Mr. Sanjeev Singhvi and prayed to publish award immediately. The copy of the letter dated 20.02.2015 written by and on behalf of petitioner to the Chief Engineer (E) BSNL Electrical Zone has been placed on record by the respondent with reply as Annexure-R/3.It is noteworthy that in furtherance to the request of petitioner vide letter dated 18.11.2014, for appointment of Arbitrator, respondent appointed Mr. Tulsi Kumar Parihar as sole Arbitrator but he resigned to act as Arbitrator and appointed Mr. Sanjeev Singhvi as sole Arbitrator exercising his jurisdiction as Chief Engineer (E) BSNL, Jaipur as per Clause 25 of the Master Agreement.
Tulsi Kumar Parihar as sole Arbitrator but he resigned to act as Arbitrator and appointed Mr. Sanjeev Singhvi as sole Arbitrator exercising his jurisdiction as Chief Engineer (E) BSNL, Jaipur as per Clause 25 of the Master Agreement. Thus, for deciding the additional claim/ dispute of petitioner, Mr. Sanjeev Singhvi was appointed as sole Arbitrator under order dated 16.03.2015 with whom the original claim of petitioner was already subjudice. Respondent had also made counter claim. 5. It has further transpired from the record as also undisputed fact that as many as 11 hearings have taken place before the Arbitrator Mr. Sanjeev Singhvi and according to petitioner, last hearing took place on 24.08.2016, thereafter no proceedings have taken place. The last procedural order dated 24.08.2016 passed by the Arbitrator, concluding the 11 th hearing of arbitration proceedings has been placed on record by the petitioner as Annexure-5 with the arbitration application.From bare perusal of the proceedings of arbitration, drawn in the 11 th hearing dated 24.08.2016 (Ann.5), it appears that the deliberations took place on 10 issues indicated therein and the proceedings culminated with observation that “the next date of hearing will be fixed after confirmation of desired requirements as per these minutes”. 6. It is the case of petitioner that Arbitrator has not conducted any hearing after 24.08.2016 although petitioner itself has pleaded in para No.15 of the arbitration application that thereafter communication dated 12.01.2021 was received from the Arbitrator, asking both the parties to provide specific reply and therein it was mentioned that respondent had submitted his reply vide letter dated 09.10.2017 pursuant to the last drawn proceedings dated 24.08.2016. It is worthy to note here that petitioner has not placed on record the communication dated12.01.2021. 7. It has been pleaded and argued on behalf of petitioner that in the meanwhile, the Arbitration and Conciliation (Amendment) Act, 2015 came in force w.e.f. 23.10.2015 and thereby Section 12 (5) has been amended and since the Arbitrator Mr. Sanjeev Singhvi has not conducted the hearing of arbitration proceedings after 24.08.2016, it means for last over six years, hence by virtue of amended Section 14 of A&C Act, 1996, he has lost his mandate to act as sole Arbitrator due to becoming de jure and de facto unable to perform his functions.
Sanjeev Singhvi has not conducted the hearing of arbitration proceedings after 24.08.2016, it means for last over six years, hence by virtue of amended Section 14 of A&C Act, 1996, he has lost his mandate to act as sole Arbitrator due to becoming de jure and de facto unable to perform his functions. In addition, submission of counsel for the petitioner is that amended Section 12 (5) r/w 7 th Schedule appended with the Act, prohibits the continuance of arbitration proceedings before Mr. Sanjeev Singhvi because he is the government servant and employee of BSNL and having nexus with the respondent-BSNL, is an interested person to the dispute. Thus, as per amended Section 12 and 14 of the Act, 1996, sole Arbitrator Mr. Sanjeev Singhvi has become de jure or de facto incapable to continue the office of the Arbitrator and has become ineligible to continue proceedings as an independent and neutral Arbitrator. Thus, the prayer has been made to appoint an independent, impartial and neutral sole Arbitrator and the appointment of Mr. Sanjeev Singhvi as sole Arbitrator by the respondent be declared annuled, since mandate of his arbitration stood terminated. 8. In support of his submission, learned counsel for the petitioner has relied upon the judgment of Hon'ble Supreme Court in case of Ellora Paper Mills Limited Vs. The State of Madhya Pradesh [ (2022) 3 SCC 1 ]. 9. Respondent-BSNL has filed reply to the arbitration application stating inter alia, firstly Arbitrator in the present matter of dispute was appointed by the Chief Engineer of BSNL in exercise of his power and jurisdiction vested by virtue of Clause 25 of the Master Agreements and secondly, before the appointed sole Arbitrator Mr. Sanjeev Singhvi, as many as 11 hearings of the arbitration have been conducted i.e. first hearing was held on 03.12.2012 and last hearing held on 24.08.2016. Petitioner has accepted appointment of Mr. Sanjeev Singhvi as sole Arbitrator as much as submitted to his jurisdiction and further it is fault and negligence on the part of petitioner for not responding before the Arbitrator, in furtherance to the last drawn proceedings on 24.08.2016, due to which proceedings of arbitration could not be conducted. 10.
Petitioner has accepted appointment of Mr. Sanjeev Singhvi as sole Arbitrator as much as submitted to his jurisdiction and further it is fault and negligence on the part of petitioner for not responding before the Arbitrator, in furtherance to the last drawn proceedings on 24.08.2016, due to which proceedings of arbitration could not be conducted. 10. Learned counsel for the respondent drew attention of this Court to the letter dated 04.09.2023 (enclosed with the reply to this arbitration application as Annexure-R/4) written by the Arbitrator, pointing out that the claimant submitted his response of 11 th hearing before him vide letter dated 18.04.2022, in response to the proceedings of 11 th hearing held on 24.08.2016, i.e. after almost six years and thereafter, due to some other assignment, Arbitrator could not be fixed for the hearing. 11. Learned counsel for the respondent pointed out that now he has received information from the Arbitrator that letter/ notice has been issued by the Arbitrator to the parties to appear in arbitration proceedings and now next date 24.03.2025 is fixed in the matter but the petitioner has declined to turn up before the Arbitrator. 12. Learned counsel for the petitioner, in his rebuttal submission, does not dispute the receipt of letter/ notice sent by the Arbitrator for proceeding further in the matter but his submission is that since mandate of learned Arbitrator stood terminated with efflux of time, he cannot continue/ proceed with the pending arbitration proceedings and in such eventuality, new Arbitrator is required to be appointed. 13. Having pondered over the rival submissions made by and on behalf of both the parties and from perusal of the pleadings and documents placed on record by both the parties, this Court finds that this is an undisputed fact that petitioner had accepted the appointment of Mr. Sanjeev Singhvi as sole Arbitrator in the present matter, appointed by the Chief Engineer (E) BSNL in exercise of his power and jurisdiction as per Clause 25 of the Master Agreements. Further from the letter dated 20.02.2015 (Annexure-R/3) written by and on behalf of petitioner, it appears that the petitioner himself requested to refer his additional claim/ dispute before the Arbitrator Mr. Sanjeev Singhvi and prayed for publication of award by him immediately. This is also an undisputed fact that before the sole Arbitrator Mr. Sanjeev Singhvi, 11 hearings of arbitration proceedings have taken place.
Sanjeev Singhvi and prayed for publication of award by him immediately. This is also an undisputed fact that before the sole Arbitrator Mr. Sanjeev Singhvi, 11 hearings of arbitration proceedings have taken place. The minutes of first hearing dated 03.12.2012 (Annexure-R/2) and the minutes of 11 th hearing conducted on 24.08.2016 (Ann.5)are available on record. 14. This Court finds that petitioner has prayed to annul the appointment of sole Arbitrator Mr. Sanjeev Singhvi, taking resort to the amended provisions of Section 12 and 14 of the A&C Act, 1996, introduced by virtue of Arbitration and Conciliation (Amendment) Act, 2015 which came in force w.e.f. 23.10.2015, it means during course of the pending arbitration proceedings before Mr. Sanjeev Singhvi and has taken a ground that he has become ineligible to act as Arbitrator as much as has lost his mandate due to not concluding the arbitration proceedings within timeline. Though, the counsel for the petitioner, during the course of argument has taken resort to Section 29-A to show the time limit for passing an arbitral award but this Court is not convinced with his contention that the mandate of the sole Arbitrator Mr. Sanjeev Singhvi stood terminated automatically. The resort taken by the petitioner to Section 12 (5) r/w Section 14 and 29-A of the A&C Act, 1996, for annulling the appointment of sole Arbitrator Mr. Sanjeev Singhvi, has been repelled by the counsel for the respondent and such issues which involve question of fact and law, require adjudication on merits. This Court, in exercise of its jurisdiction under Section 11 (6) of the A&C Act, 1996, may not assume and declare for termination of mandate of the Arbitrator or to annul his appointment, for which petitioner ought to have approached before the Principal Civil Court defined under Section 2 (e) of the A&C Act, 1996. The Rajasthan High Court, does not exercise its original Civil Jurisdiction and is not a Court defined under Section 2 (e) of the A&C Act, 1996. 15. The High Court of Delhi in the matter of Mother Boon Foods Pvt. Ltd. Vs.
The Rajasthan High Court, does not exercise its original Civil Jurisdiction and is not a Court defined under Section 2 (e) of the A&C Act, 1996. 15. The High Court of Delhi in the matter of Mother Boon Foods Pvt. Ltd. Vs. Ready Roti India Pvt. Ltd. Arbitration Petition 176/2023 and I.A. 2890/2023 [MANU/DE/0988/2023] decided on 14.02.2023, held and observed that the appointment of erstwhile appointed sole Arbitrator has to be discharged from his position to act as Arbitrator, before accepting the prayer for appointment of a new Arbitrator in the same matter to conduct arbitration proceedings. This Court concurs with such view and finds that in the present matter, indisputably, Arbitral Tribunal of sole Arbitrator Mr. Sanjeev Singhvi has been appointed by the Chief Engineer (E), BSNL, following procedure envisaged under Clause 25 of the Master Agreement and petitioner has appeared before the Arbitrator and accepted his appointment as also submitted to his jurisdiction, then until and unless, Arbitrator Mr. Sanjeev Singhvi is not discharged from his position to act as Arbitral Tribunal, the application for appointment of a new Arbitrator in the same subject matter cannot be allowed. The High Court of Delhi, relied upon a judgment of the Chhattisgarh High Court and the relevant portion of the judgment reads as under:- “15. The Chhattisgarh High Court in the matter J.B. Construction Company v. South Eastern Central Railway, MANU/CG/0155/2020 , dealt with a similar matter pertaining to the appointment of an Arbitrator when there exists a previous mandate of appointment. The relevant paragraph is reproduced below:- "17. Relying upon the aforesaid two judgments of the Supreme Court, this High Court also on a similar issue in Arbitration Appeal No. 80 of 2016 in case of Rahul Somani v. Ramgopal Somani, wherein this court in its judgment dated 06.01.2017 has reached to the conclusion that so far as the termination of mandate is concerned, it would lie only before the Principal Civil Court of original jurisdiction and with only those High Courts which exercise ordinary original civil jurisdiction. In the said case, in para graphs 12 and 17 to 20 held as under: 12.
In the said case, in para graphs 12 and 17 to 20 held as under: 12. 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." XXX XXX XXX 17. In the present case, learned counsel for the applicant has raised another ground to press his application before this Court on submission that the present is a joint application for termination of mandate as well as for appointment of new Arbitrator, therefore, for the remaining part of the prayer, the application is maintainable. 18. I am not impressed with the arguments advanced by learned counsel for the applicant, because, as long as an Arbitrator is functioning under the deed of joint consent for appointment of Arbitrator and is seized of the matter, a second application for appointment of fresh Arbitrator is not maintainable unless the mandate of the earlier appointed Arbitrator is terminated in accordance with Section 14 of the Act, 1996. 19. I am not commenting on the jurisdiction of this Court under Section 11(6) of the Act, 1996, once the mandate is terminated, but for the present, this Court has no jurisdiction to entertain an application for appointment of fresh Arbitrator. 20. For the foregoing, the application is dismissed, as not maintainable. However, the applicant would be at liberty to approach the principal Civil Court of original jurisdiction seeking prayer to terminate the mandate of the Arbitrator." 16. The appointed Sole Arbitrator has to be discharged from his position in the Tribunal, in order to approach the Court for the appointment of a new arbitrator to conduct the Arbitral proceedings.” 16. In the recent judgment dated 13.05.2024 passed by the Hon'ble Supreme Court in case of Chief Engineer (NH) PWD (Roads) Vs. M/s BSC & C and C JV, in Special Leave to Appeal (C) No. 10544/2024 , it has held that:- "The power under sub-section (4) of Section 29A of the Arbitration Act vests in the Court as defined in section 2(1)(e) of the Arbitration Act. It is the principal civil court of original jurisdiction in a district which includes a High Court provided the High Court has ordinary original civil jurisdiction." 17.
It is the principal civil court of original jurisdiction in a district which includes a High Court provided the High Court has ordinary original civil jurisdiction." 17. This Court is of opinion that, above referred proposition of law govern to the facts of present case.The judgment referred by the learned counsel for the petitioner in case of Ellora Paper Mills Limited (supra), does not apply to the facts of present case because in the facts of that case, the Hon’ble Supreme Court had clearly observed the factual matrix in para No. 14 and 15 that Stationary Purchase Committee- Arbitral Tribunal had not commence the arbitration proceedings and technically, it cannot be said that the arbitration proceedings by the Arbitral Tribunal- Stationary Purchase Committee has commenced. Whereas, in the present case, indisputably, arbitration proceedings before the sole Arbitrator Mr. Sanjeev Singhvi has commenced and admittedly as many as 11 hearings have taken place before him and petitioner has accepted his appointment as sole Arbitrator, before filing the present application for appointment of a new Arbitrator. 18. In the light of proposition of law referred hereinabove, this Court is of opinion that petitioner ought to have approached before the Principal Civil Court, defined under Section 2(e) of the A&C Act, 1996 for seeking annulment of the appointment of sole Arbitrator Mr. Sanjeev Singhvi either on the ground of his ineligibility to continue arbitration proceedings due to falling under the prohibition provided under Section 12 (5) r/w 7 th Schedule of the A&C Act or for declaring his mandate terminated due to efflux of timeline as per Section 14 r/w 29-A of A&C Act; once the competent court declares his appointment annulled or terminate his mandate, thereafter only the prayer of petitioner for appointment of a fresh Arbitration Tribunal can be entertained. 19. In view of foregoing discussions, this Court finds that the prayer for appointment of Arbitrator made by the petitioner in the instant arbitration application cannot be accepted and allowed at this stage, however it is open for the petitioner to approach the Principal Civil Court of original jurisdiction to press his prayer for annulling the appointment of sole Arbitrator Mr. Sanjeev Singhvi and then may ask for a fresh appointment of Arbitrator. 20. Accordingly, the present arbitration application stands disposed of. 21. Pending application, if any, also stands disposed of.