Madhya Pradesh High Court
Paras Jain vs Smt. Preeti on 15 December, 2016
AC-1-2016
(PARAS JAIN Vs SMT. PREETI)
15-12-2016
Shri Vishal Baheti, learned counsel for applicants.
Shri Shashank Sharma, learned counsel for respondents.
Heard finally with consent.
This arbitration case u/S.15(2) of the Arbitration and Conciliation Act, 1996 has been filed for appointment of substitute arbitrator.
The facts in brief are that the applicants and the respondents had entered into a partnership for carrying on the business of providing on rent a garden. The said deed contained the arbitration clause and some dispute had arisen between the parties, therefore, after serving a notice for appointing the arbitrator, the applicant No.1 had earlier approached this court by way of AC No.18/2008 and this court after examining the rival contentions of the parties vide order dated 22 n d December, 2009 had appointed Shri Justice P.D.Muley, Retired Judge of this court to be the sole arbitrator. The Review Petition No.34/2010 against the said order was dismissed on 22 nd August 2013 and the SLP (Civil) CC No.22346-22347/2013 was also dismissed by the supreme court by order dated 6/5/2014. The sole arbitrator by order dated 23/11/2015 had withdrawn subject to deposit of certain amount by the parties and thereafter the present application for appointment of substitute arbitrator has been filed.
Learned counsel for applicants submits that since the arbitrator appointed by this court has withdrawn, therefore, substitute arbitrator be appointed and in the arbitration clause no procedure has been prescribed. As against this, learned counsel for respondents has raised an objection that the order of the learned Arbitrator is a conditional order and unless the conditions are satisfied, substitute arbitrator cannot be appointed and that there was no agreement containing the arbitration clause between the parties and the procedure prescribed for appointment of the arbitrator has not been followed. Having heard the learned counsel for parties and on perusal of the record, it is noticed that the issue relating to the existence of the arbitration agreement has already been decided and concluded by the order dated 22/12/2009 passed in AC No.18/2008. Therefore, it is not open to the respondents to contend at this stage that the arbitration agreement does not exist.
So far as the objection of the respondents that the order of the arbitrator dated 23/11/2015 was a conditional order, such an objection also does not survive in view of the fact that the learned Arbitrator has subsequently left for heavenly abode, therefore, the eventuality for appointment of the substitute arbitrator has arisen. So far as the objection of the respondents that in terms of Sec.15(2), the substitute arbitrator can be appointed according to the rules that were applicable for appointment of the original arbitrator. Supreme court in the matter of Huawei Technologies Company Ltd Vs. Sterlite Technologies Ltd reported in (2016) 3 MPLJ 15 has held that the expression âRulesâ appearing in Sec.15(2) of the Act must be understood with reference to the provisions for appointment contained in the arbitration agreement. In the present case, in the arbitration agreement, no procedure has been prescribed for appointment of the arbitrator and the arbitration clause also does not prohibit the appointment of substitute arbitrator, therefore, there is no impediment in appointing the substitute arbitrator u/S.15 in terms of the requirement of Sec.11(6) of the Act. See San-A Tradubg Company Limited Vs. I.C. Textiles Limited (2012) 7 SCC 192 and ACC Limited Vs. Global Cements Limited (2012) 7 SCC 71. In the aforesaid circumstances, I am of the opinion that the prayer made by the applicants for appointment of the substitute arbitrator deserves to be allowed. Considering the nature of dispute between the parties and circumstances of the case, in my opinion Hon.Mr.Justice I.S.Shrivastava (Retired) can be appointed as substitute arbitrator to resolve the dispute between the parties. Let the declaration in terms of Section 11(8) and 12(1) of the amended Arbitration Act in the prescribed form as contained in 6th Schedule of the Act be obtained from the proposed Arbitrator by the Principal Registrar of this Court before the next date of hearing.
List on 24/1/2017.
(PRAKASH SHRIVASTAVA) JUDGE