Bombay High Court
Gati Limited vs Union Of India on 22 January, 2021
Author: G. S. Patel
Bench: G.S. Patel
21-CARAPL-9069-2020.DOCX
Arun
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMM ARBITRATION APPLICATION (L) NO. 9069 OF 2020
Gati Ltd ...Applicant
Versus
Union of India (Through Central Railways) ...Respondent
Mr Simil Purohit, with Ms Nikita Vardan, Mr Akash Mehta and Mr
Vishal Tiwari, i/b Kanga & Co, for the Applicant.
Mr TJ Pandian,i/b TC Subramanian, for the Respondent.
CORAM: G.S. PATEL, J.
DATED: 22nd January 2021
PC:-
1. Heard.
2. There was an Award dated 10th September 2013 on eight claims made by the present Applicant, a Courier and Transport ARUN RAMCHANDRA Company, under an Agreement of 4th October 2010 with the SANKPAL Digitally signed by Respondents acting through the Senior Divisional Commercial ARUN Manager of the Central Railways.
RAMCHANDRA SANKPAL Date: 2021.01.25 10:46:24 +0530
3. Further details are unimportant at this stage. That Award was by a serving officer of the Railways as contemplated by the Arbitration Clause in the Agreement. Of the eight claims presented by the Page 1 of 7 22nd January 2021 21-CARAPL-9069-2020.DOCX Claimant, one was granted in favour of the present Applicants. The other seven were rejected.
4. The Applicants challenged the Award under Section 34 of the Arbitration and Conciliation Act 1996. By an order of 31st January 2019, a learned Single Judge of this Court set aside the Award on all but three claims viz., Claims 5, 6 and 7.
5. Believing this order of the Single Judge to be erroneous, i.e. that the entire Award ought to have been set aside, the Applicants carried the matter in appeal. According to them, therefore, the Award was bad in so far as it rejected Claims 5, 6 and 7 also. The Division Bench in Appeal agreed. By its order of 6th January 2020, it set aside the Award on the remaining three claims (5, 6 and 7) as well.
6. For my purposes today, what is important is paragraph 8 and paragraph 16 of the Appellate Order which read thus:
"8. But the victory for the Appellants means that said claims would have to be re-adjudicated.
16. Meaning thereby, the Award is set aside insofar it rejects Claims Nos. 1, 2, 4, 5, 6 and 7 on account of the Award being a non-reasoned Award and the Award overlooking the relevant material evidence. Needless to state issue of interest would also require to be re-adjudicated upon for the reasons depending upon whether the amounts covered by the said issues are awarded or not interest issue would be decided."
(Emphasis added) Page 2 of 7 22nd January 2021 21-CARAPL-9069-2020.DOCX
7. This clearly means that the claims of the Applicant require to be re-adjudicated and this re-adjudication would also extend to the question of interest. There is no ambiguity at all about the wording of the appellate order.
8. The question now remains about the appointment of an Arbitrator to decide the remaining seven claims and the question of interest. The Arbitration Clause in so far as it seeks to appoint a serving officer of the Railways is self-evidently not tenable in view of the current position in law as summarised in Lite Bite Foods Pvt Ltd v AAI,1 following the decisions in Perkins Eastman Architect DPC & Anr vs HSSC (India) Ltd;2 Voestalpine Schienen GmbH v Delhi Metro Rail Corporation Ltd;3 and TRF Limited v Energo Engineering Products Ltd.4
9. This will require one of two modes of appointing an Arbitrator. Either both sides agree, or the Court must appoint an Arbitrator. Given that one of the two sides is the Central Railways, I believe an agreement is impossible, and Mr Pandian correctly leaves the choice of the Arbitrator to this Court.
10. The disputes and differences between the parties under the Agreement of 4th October 2010 is referred to the sole arbitration of Mr Mahernosh Humranwala, learned Advocate of this Court.
12019 SCC OnLine Bom 5163.
22019 (9) SCC OnLine SC 1517.
3(2019) 4 SCC 665.
4(2017) 8 SCC 377.
Page 3 of 722nd January 2021 21-CARAPL-9069-2020.DOCX TERMS OF APPOINTMENT
(a) Appointment of Arbitrator: Mr Mahernosh Humranwala, learned Advocate of this Court is hereby nominated to act as a Sole Arbitrator to decide the disputes and differences between the parties under Agreement dated 4th October 2010.
(b) Communication to Arbitrator of this order:
(i) A copy of this order will be communicated to the learned Sole Arbitrator by the Advocates for the Applicant within one week from the date this order is uploaded.
(ii) The Advocates for the Applicant will forward an ordinary copy of this order to the learned Sole Arbitrator at the following postal and email addresses:
Arbitrator Mahernosh Humranwala, Advocate Address C/o Tatva Legal, 101, 10th Floor, Sakhar Bhavan, Nariman Point, Mumbai 400 021.
Mobile 98200 62124
Email mehernosh.humranwala@gmail.
com
(c) Disclosure: The learned Sole Arbitrator is requested to forward, in hard copy or soft copy (or both), the Page 4 of 7 22nd January 2021 21-CARAPL-9069-2020.DOCX necessary statement of disclosure under Section 11(8) read with Section 12(1) of the Arbitration Act to Advocates for the parties as soon as possible. The Advocates for the Applicant will arrange to file the original statement in the Registry. If the statement is forwarded in soft copy, a print out of the covering email is also to be filed in the registry.
(d) Appearance before the Arbitrator: Parties will appear before the learned Sole Arbitrator on such date and at such place as the learned Sole Arbitrator nominates to obtain appropriate directions in regard to fixing a schedule for completing pleadings, etc.
(e) Contact/communication information of the parties:
Contact and communication particulars are to be provided by both sides to the learned Sole Arbitrator. The information is to include functional email addresses and mobile numbers.
(f) Section 16 application: The Respondent is at liberty to raise all questions of jurisdiction within the meaning of Section 16 of the Arbitration Act. All contentions are left open.
(g) Interim Application/s:
(i) Liberty to the parties to make an interim application or interim applications including (but not limited to) interim applications under Section 17 of the Arbitration & Conciliation Act, 1996 before the learned Sole Arbitrator.Page 5 of 7
22nd January 2021 21-CARAPL-9069-2020.DOCX Any such application will be decided in such manner and within such time as the learned Sole Arbitrator deems fit.
(ii) The learned Sole Arbitrator is requested to dispose of all interim applications at the earliest.
(h) Fees: The learned Sole Arbitrator's fees shall be governed by the Bombay High Court (Fee Payable to Arbitrators) Rules, 2018.
(i) Sharing of costs and fees: Parties agree that all arbitral costs and the fees of the arbitrator will be borne by the two sides in equal shares in the first instance.
(j) Consent to an extension if thought necessary. Parties immediately consent to a further extension of up to six months to complete the arbitration should the learned Sole Arbitrator find it necessary.
(k) Venue and seat of arbitration: Parties agree that the venue and seat of the arbitration will be in Mumbai.
(l) Procedure: These directions are not in derogation of the powers of the learned Sole Arbitrator to decide and frame all matters of procedure in arbitration.
11. The Commercial Arbitration Application is disposed of in these terms. No costs.
Page 6 of 722nd January 2021 21-CARAPL-9069-2020.DOCX
12. This order will be digitally signed by the Personal Assistant of this Court. All concerned will act on production of a digitally signed copy of this order.
(G. S. PATEL, J) Page 7 of 7 22nd January 2021