Himachal Pradesh High Court
State Of Himachal Pradesh vs Bmd Private Limited on 14 July, 2025
Author: Ajay Mohan Goel
Bench: Ajay Mohan Goel
2025:HHC:24169 IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA CARBC No.16 of 2025 a/w CARBC No.17 of 2025 .
Reserved on: 17.06.2025 Decided on: 14.07.2025 CARBC No.16 of 2025 State of Himachal Pradesh ... Petitioner/Objector Versus BMD Private Limited ... Respondent/Claimant CARBC No.17 of 2025 State of Himachal Pradesh ... Petitioner/Objector Versus BMD Private Limited ... Respondent/Claimant Coram Hon'ble Mr. Justice Ajay Mohan Goel, Judge.
Whether approved for reporting?1Yes ____________________________________________________ _ For the petitioner(s) : Mr. Vinay Kuthiala, Senior Advocate, with M/s Vandana Kuthiala and Devi Singh, Advocates, in both the cases.
For the respondent(s) : Mr. Ankush Dass Sood, Senior Advocate, with M/s Manish Kumar, Abhishek Dulta, Vishal Verma and Gaurav Chaudhary, Advocates, in both the cases.
Ajay Mohan Goel, Judge As common issues of facts and law are involved in both these petitions and as arguments were also jointly heard in these cases, the same are being disposed of vide a common judgment.
2. It is pertinent to mention at this stage that arguments were previously heard in these matters on 14.05.2025 and judgment was reserved. Mr. Vinay Kuthiala, learned Senior Counsel, addressed the arguments on behalf of the petitioner and Mr.Manish 1 Whether reporters of the local papers may be allowed to see the judgment?
::: Downloaded on - 25/07/2025 21:20:49 :::CIS2 2025:HHC:24169 Kumar, learned counsel, addressed the arguments on behalf of the respondent. After the judgment was reserved, a miscellaneous .
application, i.e. CARAP No.53 of 2025, was filed on behalf of the petitioner with the request to place on record subsequent events.
The application was listed in the Court on 28.05.2025, notice was issued and the non-applicant was called upon to file reply thereto.
The application was filed in CARBC No.16 of 2025 only. Reply to the application was filed by the non-applicant. The prayer in the application was to place on record subsequent events, including passing of judgment by Hon'ble Supreme Court of India on 13.05.2025, mentioned in the application, which as per the applicant was not brought to the notice of the Court during the course of arguments, when the judgment was reserved on 14.05.2025. This application was disposed of by the Court on 17.06.2025, when alongwith Mr. Manish Kumar, learned counsel for the respondent/Company, Mr. Ankush Dass Sood, learned Senior Counsel, also assisted the Court. The application was disposed of in the following terms:-
"Having heard learned Senior Counsel for the parties, as agreed, this application is disposed of by observing that the judgments referred to therein shall be taken into consideration while deciding the main case."
Thereafter, the judgment was reserved again.
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3. The State has filed these two petitions against the respective Awards dated 29.04.2023, passed by the learned .
Arbitrator, in the Claim Petitions filed by the respondent herein. The Awards are ex parte Awards.
4. In CARBC No.16 of 2025, the following Award has been passed by learned Arbitrator in favour of the respondent:-
"12.1 Accordingly, award is passed in favour of the claimant and against the respondent, for payment of Rs.8,41,04,572 (Eight Crores Fourty One Lacs Four Thousand Five Hundred Seventy Two) (6,00,73,973 + 2,40,29,589) with interest @15% per annum under claim heads (a) and (b); Nil under claim head (c); and Rs.33,60,668 Thirty Three Lacs Sixty Thousands Six Hundred Sixty Eight) (Rs.13,60,668.00 +20 lacs) under claim head (d).
12.2 The Respondent shall pay the award money to the claimant within a period of three months."
In CARBC No.17 of 2025, the following Award has been passed by learned Arbitrator in favour of the respondent:-
"12.1 Accordingly, award is passed in favour of the claimant and against the respondent, for payment of Rs.8,41,04,572 (Eight Crores Fourty One Lacs Four Thousand Five Hundred Seventy Two) (6,00,73,973 + 2,40,29,589) with interest @15% per annum under claim heads (a) and (b); Nil under claim head (c); and Rs.33,60,668 Thirty Three Lacs Sixty Thousands Six Hundred Sixty Eight) (Rs.13,60,668.00 +20 lacs) under ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 4 2025:HHC:24169 claim head (d).
12.2 The Respondent shall pay the award money to the .
claimant within a period of three months."
5. As per the averments made in the petitions, in response to the Global Bids invited by the Government of Himachal Pradesh, the respondent applied for the allotment of Dhancho Hydro Electric Project (HEP) and Malana-III HEP. On 05.08.2010, the Government of Himachal Pradesh allotted Dhancho HEP for an installed capacity of 12 MW in favour of the respondent on the basis of quoting a higher financial bid, at the rate of 23.21% additional free power over and above normal free royalty with fixed upfront premium @ Rs.20 Lakh/MW amounting to Rs.240 Lakh. On the same date, Government of Himachal Pradesh also allotted to the respondent, Malana-III HEP for an installed capacity of 30 MW on the basis of quoting a higher financial Bid @ 17.61% additional free power, over and above normal free royalty with fixed upfront premium @ 20 Lakh/MW amounting to Rs.600 Lakh.
6. Thereafter, Letters of Allotment with regard to both these projects were issued in favour of the respondent by the petitioner/State on 04.05.2011 and Pre-Implementation Agreements (hereinafter to be referred as "the PIAs") were signed on 26.05.2011.
According to the petitioner, an amount of Rs.1.2 Crore was deposited by the respondent towards the first installment, i.e. 50% of total ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 5 2025:HHC:24169 upfront premium charges on 02.05.2011 and Rs.1.20 Crore towards second installment, i.e. balance 50% of total upfront premium .
charges in the month of May, 2012 with regard to Dhancho HEP.
With regard to Malana-III HEP, an amount of Rs. 3 Crore was deposited by the respondent towards first installment, i.e. 50% of total upfront premium charges on 02.05.2011 and Rs.3 Crore towards second installment, i.e. balance 50% of total upfront premium charges in the month of May, 2012.
7. The Detailed Project Report with an installed capacity of 18 MW qua Dhancho HEP and 30 MW qua Malana-III HEP was submitted by the developer on 28.08.2013 in accordance with the Techno Economic Clearance.
8. According to the petitioner, the respondent failed to sign the Implementation Agreement with regard to both these Projects within the time period allowed in the Pre-Implementation Agreement. On account thereof, the upfront deposited by the respondent was forfeited by the petitioner as per the terms of Pre-
Implementation Agreement.
9. Respondent-Company, vide letter dated 21.01.2019, requested for surrender and refund of 100% upfront premium with interest in respect of both the Projects. The matter was taken up by the Government, wherein the Government vide CMM in its Meeting held on 08.08.2019, approved to cancel the allotment of the said two ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 6 2025:HHC:24169 Projects and terminate the Pre-Implementation Agreement signed on 26.05.2011, as the Company had failed to sign the Implementation .
Agreement within the time period stipulated in the Pre-
Implementation Agreement. Forfeiture of upfront premium deposited by the Company was also approved without any liability of the Government. The termination/cancellation order was accordingly issued to the Company on 03.10.2019.
10. On 30.10.2019, the petitioner received a Legal Notice for the refund of upfront premium for an amount of Rs.2.40 Crore qua Dhancho HEP and Rs.6 Crore qua Malana-III HEP on the ground that the Project had become unviable. It was mentioned in this Legal Notice that if the upfront premium was not refunded, then said Legal Notice be treated as a Notice invoking arbitration by proposing the name of Justice S.N. Jha, (Retired) Chief Justice of the High Court of Rajasthan and Jammu & Kashmir, as the Arbitrator.
11. Thereafter, the petitioner received a copy of letter dated 07.12.2019, addressed by Munish Kumar and Associates Advocates for the respondent to Justice S.N. Jha, (Retired), in terms whereof, the respondent unilaterally requested Justice S.N. Jha, (Retired), to preside as the Sole Arbitrator and adjudicate the dispute between the parties to the Pre-Implementation Agreements, dated 26.05.2011, respectively.
12. Vide letter dated 13.12.2019, the petitioner intimated ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 7 2025:HHC:24169 the respondent that neither Directorate of Energy has consented to the name of Justice S.N. Jha, (Retired) as Sole Arbitrator, as .
proposed by the respondent, nor it should be construed as implied consent of the petitioner for his appointment as such. The respondent was requested to act according to the provisions of the Arbitration and Conciliation Act, 1996. Said letter was sent to the respondent through e-mail as well as by post. Copies of the letter were also sent to Justice S.N. Jha, (Retired) and Munish Kumar and Associates Advocates through Registered A.D.
13. As per the petitioner, an application under Section 13(3) and 13(2) of the Arbitration and Conciliation Act was sent to Justice S.N. Jha, (Retired) and Munish Kumar & Associate Advocates through Registered A.D.. However, to the utter surprise of the petitioner, a Notice dated 19.12.2019 was received from Justice S.N. Jha, (Retired) by the petitioner, wherein Justice S.N. Jha, (Retired) informed that he was appointed as the Sole Arbitrator by the respondent and that he had fixed the matter for 21.01.2020, for preliminary hearing at 2:00 p.m. at his Office, at C/41 (Lower Ground Floor), Jangpura Extension, New Delhi-110014, to decide the modalities of arbitration. The petitioner was directed to appear in person or through a duly a authorized representative and participate in the proceedings.
14. According to the petitioner, feeling dissatisfied and ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 8 2025:HHC:24169 aggrieved,it filed petitions in this Court for appointment of an Arbitrator in terms of Clause-53 of the Pre-Implementation .
Agreement entered into between the petitioner and the respondent.
The petitions filed by the petitioner for appointment of the Arbitrator were dismissed by this Court on 02.06.2022. As per the petitioner as the appointment of learned Arbitrator was illegal and the learned Arbitral Tribunal did not had any jurisdiction to adjudicate the dispute, therefore, the petitioner did not appear before him at any stage except for the purpose of filing an application under Sections 13(1) and 13 (2) of the Arbitration and Conciliation Act for closure of the arbitral proceedings. Further, as per the petitioner learned Arbitrator disregarded the prayer of the petitioner and continued with the arbitral proceedings, resulting in the passing of the impugned Awards, dated 29.04.2023. Feeling aggrieved, the petitioner has filed these two petitions.
15. Learned Senior Counsel appearing for the petitioner argued that the Awards passed by learned Arbitrator are per se bad and non est in the eyes of law. Learned Senior Counsel submitted that Clause-53 of the Pre-Implementation Agreement entered into between the parties, provided that in the event of any difference or dispute between the parties arising out of the PIA/IA, endeavour shall be to resolve the differences mutually, failing which, the matter was to be referred to the Arbitrator, to be appointed as per the ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 9 2025:HHC:24169 provisions of Arbitration and Conciliation Act, 1996. He submitted that in terms of this Clause, no power was vested with either of the .
parties to solely nominate or appoint an Arbitrator. He further submitted that as in the present case, the respondent unilaterally appointed a sole Arbitrator in derogation to the contents of Clause-
53 of the PIA, the Awards passed by such an Arbitrator was non est in the eyes of law. He submitted that once the appointment of learned Arbitrator was not in terms of the agreement entered into between the parties, the Awards passed passed by Arbitrator were not binding on the petitioner, more so, when the petitioner had never accepted the appointment of said Arbitrator by the respondent. He argued that since Justice S.N. Jha, (Retired), who was appointed as a sole Arbitrator unilaterally by the respondent had no jurisdiction to decide the case, his appointment as an Arbitrator was per se bad and the petitioner was not bound to appear before such an Arbitrator and therefore, the Awards passed by the Arbitrator being without any authority in law were liable to be set aside. He also argued that the only course available for the parties was to approach this Court under Section 11 of the Arbitration and Conciliation Act for the appointment of an Arbitrator. As the sole Arbitrator was not appointed by following the procedure prescribed in Section 11 of the Arbitration and Conciliation Act, his nomination by the respondent was not binding upon the petitioner and neither are the Awards ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 10 2025:HHC:24169 passed by him. Learned Senior Counsel also submitted that the dismissal of the applications filed by the petitioner under Section 11 .
of the Arbitration and Conciliation Act for appointment of an Arbitrator by this Court could also not come in the way of the petitioner in assailing the Awards passed by learned Arbitrator because learned Arbitrator had no jurisdiction to decide the claims and therefore, the petitioner had the right to assail the appointment of the Arbitrator in terms of Section 34 of the Arbitration and Conciliation Act and further such liberty was granted to the petitioner even by the High Court while deciding its application filed under Section 11 (6) of the Arbitration and Conciliation Act. Learned Senior Counsel, accordingly, prayed that as the Award under challenge was passed by learned Arbitrator without any legal Authority to pass the same, the present petition be allowed and the Award being passed be quashed and set aside. No other point was urged.
16. On the other hand, learned Counsel for the respondent submitted that there was no infirmity in the appointment of the sole Arbitrator by the respondent, for the reason that said appointment was not unilateral as was being alleged. Learned Counsel submitted that the petitioner was intimated by the respondent that it was proposing the name of Justice S.N. Jha, (Retired) as Arbitrator and the petitioner did not object to the same. He further submitted that ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 11 2025:HHC:24169 in the light of the fact that the applications filed by the petitioner under Section 11(6) of the Arbitration and Conciliation Act for .
appointment of an Arbitrator were rejected by this Court, now on the same plea, the petitioner cannot be allowed to agitate the Awards passed by learned Arbitrator, as the only ground urged before this Court for assailing the Awards passed by learned Arbitrator was that his appointment was not as per Section 11 (6) of the Arbitration and Conciliation Act. Learned Counsel submitted that the findings returned by Hon'ble Coordinate Bench of this Court while deciding this issue were binding upon the parties. Nothing prevented the petitioner from assailing the order passed by Hon'ble Coordinate Bench on the application filed by the State under Section 11 (6) of the Arbitration and Conciliation Act, but they did not do so. Learned counsel submitted that perusal of the order passed by Hon'ble Coordinate Bench would demonstrate that what weighed with the Hon'ble Coordinate Bench while dismissing the application of the petitioner was that the petitioner had submitted to the jurisdiction of the learned Arbitrator. Learned Counsel submitted that in this backdrop when the applications filed by the petitioner under Section 11(6) of the Arbitration and Conciliation for appointment of the Arbitrator in both the matters were dismissed by the Hon'ble Coordinate Bench and said findings have attained finality as the orders passed by the Hon'ble Coordinate Bench were not challenged ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 12 2025:HHC:24169 by the State, the petitioner cannot be allowed to now assail the awards on the same plea.
.
17. I have heard learned counsel for the parties and have also carefully gone through the Awards in issue as well as pleadings of the parties.
18. The moot point for consideration before this Court is as to whether the Awards, passed by the learned Arbitrator are bad in law, for the reasons propounded on behalf of the petitioner or not.
19. The findings returned on merit in the Awards, were not touched by the parties in the course of arguments.
20. The mode and manner in which the learned Arbitrator was appointed in this case has already been mentioned by me in the above paragraphs of the judgment and the same is not repeated for the sake of brevity. The chronology of events is in fact not much in dispute also.
21. It is evident from the events as they happened chronologically that after the respondent-Company vide communication dated 21.01.2019 requested for the surrender and refund of 100% upfront premium with interest, the matter was taken up by the Government and the Council of Ministers in its meeting held on 08.08.2019 approved the cancellation of the allotment of both the projects and terminated the Pre-implementation Agreement which was signed on 26.05.2011. Forfeiture of the upfront premium ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 13 2025:HHC:24169 deposited by the Company was also approved. The termination/ cancellation order was issued on 03.10.2019 upon the Company.
.
The Legal Notices were issued on behalf of the respondent- Company on 30.10.2019 for the refund of upfront premium qua both the projects and it was also mentioned in these Legal Notices that in case the upfront premium was not refunded, then said Legal Notices were to be treated as Notices invoking arbitration by proposing the name of Justice S.N. Jha, (Retired) as the learned Arbitrator. It is also an admitted position that thereafter, the petitioner received a copy of letter dated 07.12.2019 addressed by Manish Kumar and Associate Advocates for the respondent- Company, to the learned proposed Arbitrator, in terms whereof, the Company requested the learned proposed Arbitrator to preside as the sole Arbitrator.
22. To complete the chronology, thereafter, the petitioner intimated the respondent-Company vide letter dated 13.12.2019 that Directorate of Energy had not consented to the name of the learned proposed Arbitrator and as per the petitioner the respondent-
Company was requested to act according to the provisions of Arbitration and Conciliation Act. Copy of the letter is also stated to be sent to the learned proposed Arbitrator.
23. According to the petitioner, an application under Section 13 (2) and 13 (3) of the Arbitration Conciliation Act was also sent to the proposed Arbitrator. However, to the utter surprise of the ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 14 2025:HHC:24169 petitioner on 19.12.2019, a Notice was received from Justice S.N. Jha, (Retired), informing that he stood appointed as the sole .
Arbitrator by the respondents and that he had fixed the matter on 21.01.2020 for preliminary hearing at 2:00 p.m. to decide the moralities of the arbitration. This as per the petitioner, led to the filing of a petitions under Section 11 (6) of the Arbitration and Conciliation Act by the petitioners in both the matters in the High Court.
24. In other words, feeling dissatisfied by the appointment of Justice S.N. Jha, (Retired) as the sole Arbitrator by the respondent-
Company, the petitioner opted to invoke the provisions of Section 11(6) of the Arbitration and Conciliation Act, which as per the petitioner was the right course for the appointment of the Arbitrator, by filing separate petitions in both the matters before this Court.
Now incidentally, it is a matter of record that the petitions filed by the State under Section 11(6) of the Arbitration and Conciliation Act, i.e. Arbitration case No. 5 of 2020 and Arbitration case No.6 of 2020 were dismissed by the Hon'ble Coordinate Bench of this Court vide order dated 02.06.2022. The findings returned by Hon'ble Coordinate Bench while dismissing the petitions filed by the petitioners are quoted herein below:-
"26. Hon'ble Apex Court in S.P. Singla, while placing reliance upon earlier judgment passed in Antrix ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 15 2025:HHC:24169 Corporation Limited v. Devas Multimedia Private Ltd. (2014) 11 SCC 560, reiterated that where the parties fail .
to act in terms of the procedure agreed upon by them, provisions of sub-section (6) of S.11 of the Act can be invoked by any of the parties, praying therein for appointment of arbitrator. However, where in terms of the agreement, arbitration clause has already been invoked by one of the parties thereto, provisions of sub-section (6) of S.11 cannot be invoked and in that case, the aggrieved party has remedy to file petition under S.13 of the Act before r arbitrator laying therein challenge to the appointment of arbitrator by the other party in terms of the agreement. Order passed in the petition under S.13 thereafter can be laid further challenge by way of petition under S.34 of the Act.
27. In the case at hand, it is not in dispute that the respondent by way of legal notice (Annexure P-3), dated 30.12.2019, expressed its intention to invoke arbitration clause i.e. Clause 53 of the PIA. While doing so, it specifically stated in para-15 that in case the notice did not refund the sum of Rs. 6.00 Crore deposited by it as upfront premium, legal notice may be treated as a notice invoking arbitration clause in terms of PIA dated 26.5.2011. In the aforesaid para, respondent proposed the name of Justice S.N. Jha, retired Chief Justice, Rajasthan and Jammu & Kashmir. Though in para-16 of the legal notice, respondent stated that in case the notice i.e. the petitioner fails to concur/agree with its proposal to appoint S.J. Jha as sole arbitrator within 30 days from the date of receipt of notice, it shall be constrained to take appropriate ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 16 2025:HHC:24169 steps for appointment and constitution of arbitral tribunal, but, in the case at hand, petitioner kept on sleeping over .
the matter after expiry of 30 days. Though, in the case at hand, vide communication dated 13.12.2019, addressed to the respondent, petitioner objected to unilateral action of the respondent in as much as appointment of Justice S.N. Jha as sole arbitrator is concerned, but after having received notice dated 19.12.2019, Annexure P-6, from the sole arbitrator, it subjected itself to the jurisdiction of the above named arbitrator by filing an application under S.13 of the Act, laying therein challenge to appointment of the arbitrator. Though, none of the parties to the lis, placed on record petition filed under S.13 of the Act by the petitioner before learned arbitrator, laying therein challenge to the appointment of the arbitrator, but factum with regard to filing of an application under aforesaid provisions of law never came to be refuted by the petitioner.
28. Though, in the case at hand, petitioner specifically admitted the factum with regard to its having received notice dated 19.12.2019 Annexure P-6 from the arbitrator intimating therein factum with regard to listing of arbitration case on 21.1.2020, but at no point of time, disclosed that after having received aforesaid notice, it fled an application under S.13 of the Act, laying therein challenge to appointment of arbitrator and it is only during proceedings of the case at hand the factum with regard to initiation of proceedings under S.13 of the Act by the petitioner before learned arbitrator came to the notice of the Court. Learned counsel appearing for the ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 17 2025:HHC:24169 respondent vehemently argued that once the proceedings under S. 13 of the Act are pending before learned .
arbitrator, petitioner is estopped from filing instant petition seeking therein appointment of arbitrator, as has been taken note herein above.
29. Hon'ble Apex Court in Antrix supra has categorically held that after appointment of the arbitrator, remedy available with the aggrieved party is not under S.11(6) of the Act but under different provision of the Act i.e. Ss. 12 and 13. In the case at hand, as per procedure agreed between the parties, petitioner was under obligation to appoint an arbitrator within 30 days of receipt of the notice from first party i.e. respondent. Though, Mr. Sudhir Bhatnagar, learned Additional Advocate General, while inviting attention of this Court to case decided by Hon'ble Apex Court in Dattar Switchgrears Ltd. v. Tata Finance Ltd. & anr. (2000) 8 SCC 151 argued that once appointment of arbitrator is clearly contrary to the provisions of the law governing appointment of arbitrator, application, if any, filed under S. 13(3) before the arbitrator unilaterally appointed by the respondent for termination of mandate of the arbitrator, is of no relevance.
30. This court, however, is not impressed with the aforesaid argument because, facts in Dattar supra were totally different from the facts of present case. In the aforesaid case, very appointment of arbitrator was found to be contrary to the provisions of the Rules governing appointment of arbitrator at ICADR which the parties had agreed to abide by in such matters. The option given to the ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 18 2025:HHC:24169 respondent Corporation to go beyond the panel submitted by the ICADR and to appoint any person of its choice was .
clearly not in the contemplation of the parties, as such, Hon'ble Apex Court rightly found appointment of above named arbitrator to be nonest in law. Since the appointment of the arbitrator was found to be nonest in law, Supreme Court held that the party aggrieved by appointment of arbitrator is not estopped from invoking jurisdiction of this Court by filing an application under S.11(6) of the Act.
31. In the case at hand, no such ground ever came to be urged in the application filed under S.11(6) of the Act, while seeking appointment of another arbitrator, rather, the petitioner concealed material fact of its having filed application under S. 13(3) read with S.13(2) of the Act before arbitrator praying therein to terminate the mandate of the arbitrator.
32. At this stage, it would be apt to take note of S.13(2) and (3) of the Act, which read as under:
2) Failing any agreement referred to in sub-
section (1), a party who intends to challenge an arbitrator shall, within fifteen days after becoming aware of the constitution of the arbitral tribunal or after becoming aware of any circumstances referred to in sub-section(3) of section 12, send a written statement of the reasons for the challenge to the arbitral tribunal. (3) Unless the arbitrator challenged under sub- section (2) withdraws from his office or the other party agrees to the challenge, the arbitral ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 19 2025:HHC:24169 tribunal shall decide on the challenge."
33. Provisions of S.13(3) clearly provides that the .
challenge if any made to the appointment of the arbitrator shall be decided by the arbitral tribunal and in case challenge under procedure agreed by the parties under sub-section (2) is not successful, arbitral tribunal shall continue arbitration proceedings and shall made an arbitral award.
34. In the case at hand, petitioner in communication dated 13.12.2019 addressed to the respondent, copy whereof was also marked to the arbitrator, nowhere assigned reason, if any, for not concurring with the proposal of the respondent for appointment of arbitrator but only stated it never consented for appointment of arbitrator.
35. S.13(2) provides that a party who intends to challenge appointment of an arbitrator shall, within fifteen days after becoming aware of the constitution of the arbitral tribunal or after becoming aware of any circumstances referred to in sub-section(3) of section 12 shall send a written statement of the reasons for the challenge to the arbitral tribunal. In the case at hand, on one hand, the petitioner subjected itself to the jurisdiction of the learned arbitrator by way of an application under S.13 of the Act, praying therein for termination of the mandate of the arbitrator and, on the other hand, approached this Court in the instant proceedings, under S. 11 of the Act, praying therein for appointment of another arbitrator, which is not permissible, as has been discussed in detail herein above.
36. Consequently, in view of detailed discussion made herein above as well as law taken into consideration, this ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 20 2025:HHC:24169 court does not find present petitions under S.11(6) of the Act to be maintainable and the same are accordingly .
dismissed. All pending applications in both the petitions stand disposed of. Interim directions, if any, also stand vacated."
25. A perusal of the findings returned by Hon'ble Coordinate Bench, clearly demonstrate that Hon'ble Coordinate Bench was pleased to hold that despite having raised an objection to the appointment of Justice S.N. Jha, (Retired) as the sole Arbitrator, vide communication dated 13.12.2019, after having received Notice dated 19.12.2019 from the sole Arbitrator, the petitioner subjected itself to the jurisdiction of the learned Arbitrator by filing applications under Section 13 of the Arbitration and Conciliation Act. Hon'ble Coordinate Bench further went on to hold that the petitioner in the proceedings under Section 11 (6) of the Arbitration and Conciliation Act in this Court, never disclosed the factum of having filed any application under Section 13 of the Act, challenging the appointment of the Arbitrator to the Court, and, it was only during the proceedings of the case at hand that this fact came to the notice of the Court. Hon'ble Coordinate Bench further went on to hold that the reliance placed upon by the learned Additional Advocate General on the judgment of Hon'ble Supreme Court of India in Dattar Switchgrears Ltd. v. Tata Finance Ltd. & anr. (2000) 8 SCC 151, was of no relevance for the reason that the fact situation ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 21 2025:HHC:24169 therein was totally different from the facts of the present case.
Hon'ble Coordinate Bench held in the aforesaid case the .
appointment of the Arbitrator was found to be contrary to the provisions of the rules governing appointment of Arbitrator at ICADR, which the parties had agreed to abide by in such matters and it was in said backdrop that Hon'ble Supreme Court was pleased to hold that appointment of the concerned Arbitrator therein was non est in the eyes of law, however, Hon'ble Coordinate Bench held that no such ground ever came to be urged in the applications filed under Section 11 (6) of the Arbitration and Conciliation Act while seeking appointment of another Arbitrator rather the petitioner concealed material fact of its having filed applications under Section 13 (2) read with Section 13 (3) of the Arbitration and Conciliation Act before the Arbitrator. Accordingly, Hon'ble Coordinate Bench was pleased to dismiss both the petitions by returning the findings which have already been quoted by me hereinabove. These findings returned by the Hon'ble Coordinate Bench have attained finality as the State did not lay any challenge thereto. Therefore, the findings returned by the Hon'ble Coordinate Bench that the petitioner had submitted to the jurisdiction of the learned Arbitrator have attained finality.
26. Now in this backdrop, when one peruses the applications which were filed under Section 13 (2) and (3) of the ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 22 2025:HHC:24169 Arbitration and Conciliation Act by the petitioner before the learned Arbitrator, a perusal thereof demonstrates that all that was prayed .
therein was that as the petitioners had filed petition under Section 11 (6) of the Arbitration and Conciliation Act before the High Court therefore the learned Arbitrator should wait for the outcome thereof.
27. For ready reference, the contents of the applicants are quoted hereinbelow:-
"APPLICATION UNDER SECTION 13(3) READ WITH SECTION FOR CLOSURE OF THE ARBITRAL PROCEEDINGS. 13(2) OF THE ARBITRATION AND CONCILIATION ACT, 1996 Respectfully Sheweth
1. That the aforesaid proceedings are pending before this Hon'ble Arbitrator and fixed for today i.e. 21.01.2020. It is further submitted that the Arbitrator has been nominated by the Non applicant/Claimant himself unilaterally, whereas the Applicant/Respondent has objected for the same.
2. That the applicant vides its Communication dated 13.12.2019, has conveyed to the Non-applicant that Applicant has never consented for the appointment of the Arbitrator and it should not be taken as implied consent on behalf of the Applicant/Respondent. The copy of this letter was also forwarded to your goodself through registered AD.
3. That the applicant has already approached the Hon'ble Chief Justice of High Court of Himachal Pradesh, vide Arbitration Case No. 5 of 2020 titled State of HP through ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 23 2025:HHC:24169 Director, Directorate of Energy Versus M/s BMD Pvt. Ltd. through its Vice President, for the appointment of the .
independent and impartial Arbitrator and the matter was listed before the Hon'ble Court on 10.01.2020 and following order was passed "Notice to the respondent, returnable within Six weeks, on taking steps within one week.
The certified copy of order is enclosed for kind perusal of this Hon'ble Arbitral Tribunal.
4. That the matter is sub-judice before the Hon'ble High Court of Himachal Pradesh. Hence, it would not be appropriate for your good-self to conduct further proceedings in the aforesaid matter, till the final decision of the Hon'ble Court.
5 That we have received a notice dated 19.12.2019 from your good self, whereby it has been informed that 21.01.2020 is fixed for preliminary hearing, to be held at 2:00 PM at your office at Lower Ground Floor, Jangpura Extension, New Delhi-110014.
It is, therefore, humbly prayed that this application may kindly be allowed and keeping in view the fact that the matter is sub-judice before the Hon'ble High Court of H.P, further proceeding in in this matter may kindly be closed."
28. There was no mention therein so as to lay a challenge to the appointment of the learned Arbitrator and calling upon the Arbitrator to adjudicate thereupon . It is also a matter of record that the learned Arbitrator waited for the outcome of the petitions filed by ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 24 2025:HHC:24169 the petitioners under Section 11 (6) of the Arbitration Conciliation Act before this Court and after the said petitions were dismissed, it .
thereafter went on to adjudicate and decide the arbitration claim. It is also a matter of record that after the rejection of the petitions filed under Section 11 (6) of the Arbitration and Conciliation Act by the petitioners, State did not appear before the learned Arbitrator.
29. Therefore, in this backdrop, when the petitions filed by the petitioners for the appointment of an Arbitrator under Section 11 (6) of the Arbitration and Conciliation Act were rejected by this Court and further when the petitioners otherwise also in the application filed under Section 13 of the Arbitration and Conciliation Act had made a limited prayer before the learned Arbitrator to await the outcome of the proceeding filed under Section 11 (6) of the Arbitration and Conciliation Act, the petitioners have no right now to challenge the Award in issue by raking again the plea that the appointment of the Arbitrator was not in-consonance with the Arbitration Clause, as this issue has attained finality in the light of the findings returned by the Hon'ble Coordinate Bench.
30. The contention of the learned Senior Counsel for the petitioners that in terms of the law laid down by the Hon'ble Supreme Court of India, the proceedings under Section 11 (6) of the Arbitration and Conciliation Act are only administrative in nature and therefore, the order passed by the Hon'ble Coordinate Bench ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 25 2025:HHC:24169 cannot be treated as binding and this Court in these proceeding independently has to decide the issue as to whether the appointment .
of the Arbitrator was in-consonance with the Arbitration Clause or not does not impresses this Court. In the considered view of this Court in terms of the law laid down by the Hon'ble Supreme Court of India, though the appointment of an Arbitrator by the Court in terms of the provisions of Section 11 (6) of the Arbitration and Conciliation Act is an administrative act, but the adjudication that is made while deciding an application filed under Section 11 (6) of the Act is judicial in nature and the findings returned therein at least are binding between the parties in collateral proceedings arising between the same parties out of the same contract in which petitions were filed under Section 11 (6) of the Arbitration and Conciliation Act. Otherwise also, in case the contention of learned Senior Counsel for the petitioners is accepted, then the findings written by the Hon'ble Coordinate Bench shall be rendered otios which are binding between the parties in the light of the fact that the State did not choose to assail the order passed by the Hon'ble Coordinate Bench in the petitions filed by it under Section 11 (6) of the Arbitration and Conciliation Act. Therefore, this court does not finds any merit in these petitions.
31. Now I will refer to the judgments cited by the learned Senior Counsel for the petitioners.
::: Downloaded on - 25/07/2025 21:20:49 :::CIS26 2025:HHC:24169
32. As has been mentioned in the above part of the judgment also that earlier arguments in case were heard and the .
judgment in both these cases was reserved on 14.05.2025.
Thereafter, an application was filed by the petitioners in CARBC No.16 of 2025, i.e. CARAP No.53 of 2025, which was disposed of by the Court on 17.06.2025 by passing the following order:-
"Having heard learned Senior Counsel for the parties, as agreed, this application is disposed of by observing that the judgments referred to therein shall be taken into consideration while deciding the main case.
33. Before referring to the other judgments relied upon by learned counsel for the parties, this Court would firstly like to deal with the judgments that are appended with the petition/ referred to in the said miscellaneous application.
34. In terms of this application, there is a reference of the judgment passed by Hon'ble Supreme Court of India in Special Leave Petition (Civil) No.28104 of 2023, titled Office for Alternative Architecture Versus Ircon Infrastructure and Services Limited, as well as S.B.P. & Co. vs Patel Engineering Ltd. & Anr., 2005 (8) Supreme Court Cases 618, as also Vidya Drolia Versus Durga Trading Corporation, (2021) 2 Supreme Court Cases 1.
35. A perusal of the judgment passed by Hon'ble Supreme Court in Special Leave Petition (Civil) No.28104 of 2023 (supra), ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 27 2025:HHC:24169 demonstrates that in the said judgment, Hon'ble Supreme Court reiterated that the Supreme Court or the High Court at the stage of .
appointment of an Arbitrator shall examine the existence of the prima facie arbitration agreement and not other issues.
36. In the considered view of this Court, this judgment of the Hon'ble Supreme Court does not comes to the rescue of the petitioners, for the reason that this Court is not examining the correctness of the judgment passed by the Hon'ble Coordinate Bench of this Court in the petitions filed by the petitioners under Section 11(6) of the Arbitration and Conciliation Act. This Bench being a Coordinate Bench neither can nor has the jurisdiction to do the same. The orders of the Hon'ble Coordinate Bench in the aforesaid proceedings having attained finality, are binding between the parties and also on this Court in the present collateral proceedings.
37. The judgments of the Hon'ble Supreme Court in S.B.P. & Co. vs Patel Engineering Ltd. & Anr., 2005 (8) Supreme Court Cases 618, as also Vidya Drolia Versus Durga Trading Corporation, (2021) 2 Supreme Court Cases 1, also have no bearing on the present adjudication because this Court is not estopping or refusing to adjudicate the present petitions filed under Section 34 of the Arbitration and Conciliation Act by the petitioners and the adjudication being made is on merit in the light of the conduct of the petitioners as well as the adjudications made by the Hon'ble ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 28 2025:HHC:24169 Coordinate Bench in the petitions preferred by the petitioners under Section 11 (6) of the Arbitration and Conciliation Act. This Court is .
not holding that the petitioners have no right to invoke the jurisdiction of this Court under Section 34 of the Arbitration and Conciliation Act. All that this Court is holding is that in the peculiar facts and circumstances of the case, the Awards passed by the learned Arbitrator cannot set aside on the plea of the petitioners that the appointment of the learned Arbitrator was not good enough.
38. Now, I will refer to the other judgments relied upon by the learned Senior Counsel for the petitioner.
39. In Interplay Between Arbitration Agreements under Arbitration and Conciliation Act, 1996 and Stamp Act, 1899, IN RE, (2024) 6 Supreme Court Cases 1, Hon'ble Supreme Court has been pleased to hold as under:-
"92. The Arbitration Act is a self-contained code inter alia with respect to matters dealing with appointment of arbitrators, commencement of arbitration, making of an award and challenges to the arbitral award, as well as execution of such awards.88 When a self-contained code sets out a procedure, the applicability of a general legal procedure would be impliedly excluded. 89 Being a self- contained and exhaustive code on arbitration law, the Arbitration Act carries the imperative that what is permissible under the law ought to be performed only in the manner indicated, and not otherwise. Accordingly, ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 29 2025:HHC:24169 matters governed by the Arbitration Act such as the arbitration agreement, appointment of arbitrators and .
competence of the Arbitral Tribunal to rule on its jurisdiction have to be assessed in the manner specified under the law. The corollary is that it is not permissible to do what is not mentioned under the Arbitration Act. Therefore, provisions of other statutes cannot interfere with the working of the Arbitration Act, unless specified otherwise."
40. In N.N. Global Mercantile Private Limited Vs. Indo Unique Flame Limited and others, (2021) 4 Supreme Court Cases 379, Hon'ble Supreme Court has been pleased to hold in Para-18 thereof as under:-
"18. Section 11 was amended by the 2016 Amendment Act, which inserted sub-section (6-A), which now provides that notwithstanding any judgment, decree or order of any court, the examination would be confined only to the existence of an arbitration agreement. The amendment of 2016 legislatively overruled the position with respect to the jurisdiction under Section 11 of the Arbitration Act, and confined the examination only to the existence of an arbitration agreement. In Duro Felguera S.A. v. Gangavaram Port Ltd. 19 it was held that the legislative intent was clear that at the pre-reference stage, there must be minimal judicial intervention, and the only issue to be decided would be the existence of the arbitration agreement, and nothing more. This position was affirmed by a three-Judge Bench in Mayavati Trading (P) Ltd. v. Pradyuat Deb Burman"::: Downloaded on - 25/07/2025 21:20:49 :::CIS
30 2025:HHC:24169
41. In Perkins Eastman Architects DPC and another Vs. HSCC (India) Limited, (2020) 20 Supreme Court Cases 760, Hon'ble .
Supreme Court has been pleased to hold as under:-
"26. The further question that arises is whether the power can be exercised by this Court under Section 11 of the Act when the appointment of an arbitrator has already been made by the respondent and whether the appellant should be left to raise challenge at an appropriate stage in terms of remedies available in law. Similar controversy was gone into by a Designated Judge of this Court in Walter Bau AG¹ and the discussion on the point was as under: (SCC pp. 805-06, paras 9-10) "9. While it is correct that in Antrix 16 and Pricol Ltd.
17, it was opined by this Court that after appointment of an arbitrator is made, the remedy of the aggrieved party is not under Section 11(6) but such remedy lies elsewhere and under different provisions of the Arbitration Act (Sections 12 and
13), the context in which the aforesaid view was expressed cannot be lost sight of. In Antrix16, appointment of the arbitrator, as per the ICC Rules, was as per the alternative procedure agreed upon, whereas in Pricol Ltd. 17, the party which had filed the application under Section 11(6) of the Arbitration Act had already submitted to the jurisdiction of the arbitrator. In the present case, the situation is otherwise.
10. Unless the appointment of the arbitrator is ex facie valid and such appointment satisfies the Court ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 31 2025:HHC:24169 exercising jurisdiction under Section 11(6) of the Arbitration Act, acceptance of such appointment as a .
fait accompli to debar the jurisdiction under Section 11(6) cannot be countenanced in law. In the present case, the agreed upon procedure between the parties contemplated the appointment of the arbitrator by the second party within 30 days of receipt of a notice from the first party. While the decision in Datar Switchgears Ltd. 18 may have introduced some flexibility in the time-frame agreed upon by the parties by extending it till a point of time anterior to the filing of the application under Section 11(6) of the Arbitration Act, it cannot be lost sight of that in the present case the appointment of Shri Justice A.D. Mane is clearly contrary to the provisions of the Rules governing the appointment of arbitrators by ICADR, which the parties had agreed to abide by in the matter of such appointment. The option given to the respondent Corporation to go beyond the panel submitted by ICADR and to appoint any person of its choice was clearly not in the contemplation of the parties. If that be so, obviously, the appointment of Shri Justice A.D. Mane is non est in law. Such an appointment, therefore, will not inhibit the exercise of jurisdiction by this Court under Section 11(6) of the Arbitration Act. It cannot, therefore, be held that the present proceeding is not maintainable in law. The appointment of Shri Justice A.D. Mane made beyond 30 days of the receipt of notice by the petitioner, though may appear to be in conformity with the law ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 32 2025:HHC:24169 laid down in Datar Switchgears Ltd. 18, is clearly contrary to the agreed procedure which required the .
appointment made by the respondent Corporation to be from the panel submitted by ICADR. The said appointment, therefore, is clearly invalid in law."
27. It may be noted here that the aforesaid view of the Designated Judge in Walter Bau AG¹ was pressed into service on behalf of the appellant in TRF Ltd. and the opinion expressed by the Designated Judge was found to be in consonance with the binding authorities of this Court. It was observed: (TRF case², SCC p. 397, paras 32-
33) "32. Mr Sundaram, learned Senior Counsel for the appellant has also drawn inspiration from the judgment passed by the Designated Judge of this Court in Walter Bau AG¹, where the learned Judge, after referring to Antrix Corpn. Ltd. 16, distinguished the same and also distinguished the authority in Pricol Ltd. v. Johnson Controls Enterprise Ltd. 17 and came to hold that: (Walter Bau AG case¹, SCC p. 806, para 10) "Unless the appointment of the arbitrator is ex facie valid and such appointment satisfies the Court exercising jurisdiction under Section 11(6) of the Arbitration Act, acceptance of such appointment as a fait accompli to debar the jurisdiction under Section 11(6) cannot be countenanced in law....'
33. We may immediately state that the opinion expressed in the aforesaid case is in consonance ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 33 2025:HHC:24169 with the binding authorities we have referred to hereinbefore.""
.
42. In Walter Bau AG, Legal Successor, of The Original Contractor, Dyckerhoff and Widmann A.G. Vs. Municipal Corporation of Greater Mumbai and another, (2015) 3 Supreme Court Cases 800, Hon'ble Supreme Court has been pleased to hold as under:-
"9. While it is correct that in Antrix¹ and Pricol Ltd., it was opined by this Court that after appointment of an arbitrator is made, the remedy of the aggrieved party is not under Section 11(6) but such remedy lies elsewhere and under different provisions of the Arbitration Act (Sections 12 and 13), the context in which the aforesaid view was expressed cannot be lost sight of. In Antrix¹, appointment of the arbitrator, as per the ICC Rules, was as per the alternative procedure agreed upon, whereas in Pricol Ltd., the party which had filed the application under Section 11(6) of the Arbitration Act had already submitted to the jurisdiction of the arbitrator. In the present case, the situation is otherwise.
10. Unless the appointment of the arbitrator is ex facie valid and such appointment satisfies the Court exercising jurisdiction under Section 11(6) of the Arbitration Act, acceptance of such appointment as a fait accompli to debar the jurisdiction under Section 11(6) cannot be countenanced in law. In the present case, the agreed upon procedure between the parties contemplated the appointment of the arbitrator by the second party within 30 days of receipt of a notice from the first party. While the decision in Datar Switchgears Ltd. may have ::: Downloaded on - 25/07/2025 21:20:49 :::CIS
34 2025:HHC:24169 introduced some flexibility in the time frame agreed upon by the parties by extending it till a point of time anterior to .
the filing of the application under Section 11(6) of the Arbitration Act, it cannot be lost sight of that in the present case the appointment of Shri Justice A.D. Mane is clearly contrary to the provisions of the Rules governing the appointment of arbitrators by ICADR, which the parties had agreed to abide by in the matter of such appointment.
The option given to the respondent Corporation to go beyond the panel submitted by ICADR and to appoint any person of its choice was clearly not in the contemplation of the parties. If that be so, obviously, the appointment of Shri Justice A.D. Mane is non est in law. Such an appointment, therefore, will not inhibit the exercise of jurisdiction by this Court under Section 11(6) of the Arbitration Act. It cannot, therefore, be held that the present proceeding is not maintainable in law. The appointment of Shri Justice A.D. Mane made beyond 30 days of the receipt of notice by the petitioner, though may appear to be in conformity with the law laid down in Datar Switchgears Ltd.³, is clearly contrary to the agreed procedure which required the appointment made by the respondent Corporation to be from the panel submitted by ICADR. The said appointment, therefore, is clearly invalid in law."
43. In Datar Switchgears Ltd. Vs. Tata Finance Ltd. and another, (2000) 8 Supreme Court Cases 151, Hon'ble Supreme Court has been pleased to hold as under:-
"23. When parties have entered into a contract and settled ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 35 2025:HHC:24169 on a procedure, due importance has to be given to such procedure. Even though rigor of the doctrine of "freedom of .
contract" has been whittled down by various labour and social welfare legislation, still the court has to respect the terms of the contract entered into by parties and endeavour to give importance and effect to it. When the party has not disputed the arbitration clause, normally he is bound by it and obliged to comply with the procedure laid down under the said clause."
44. In TRF Limited Vs. Energo Engineering Projects Limited, (2017) 8 Supreme Court Cases 377, Hon'ble Supreme Court has been pleased to hold as under:-
"23. In Newton Engg. and Chemicals Ltd. v. Indian Oil Corpn. Ltd., a two-Judge Bench was dealing with an arbitration clause in the agreement that provided that all disputes and differences between the parties shall be referred by any aggrieved party to the contract to the sole arbitration of ED (NR) of the respondent Corporation. The arbitration clause further stipulated that if such ED (NR) was unable or unwilling to act as the sole arbitrator, the matter shall be referred to the sole arbitration of some other person designated by ED (NR) in his place who was willing to act as sole arbitrator. It also provided that no person other than ED (NR) or the person designated by ED (NR) should act as an arbitrator. When the disputes arose between the parties, the appellant therein wrote to the Corporation for appointment of ED (NR) as the sole arbitrator, as per the arbitration clause. The Corporation informed the contractor that due to internal reorganisation ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 36 2025:HHC:24169 in the Corporation, the office of ED (NR) had ceased to exist and since the intention of the parties was to get the .
dispute settled through the arbitration, the Corporation offered to the contractor the arbitration of the substituted arbitrator, that is, the Director (Marketing). The Corporation further informed the contractor that if he agreed to the same, it may send a written confirmation giving its consent to the substitution of the named arbitrator. The contractor informed that he would like to have the arbitration as per the provisions of the Act whereby each of the parties would be appointing one arbitrator each. The Corporation did not agree to the suggestion given by the company and ultimately appointed Director (Marketing) as the arbitrator. The contractor, being aggrieved, moved the High Court of Delhi for appointment of arbitrator under Section 11(6)(c) of the Act and the learned Single Judge dismissed 13 the same and observed that the challenge to the appointment of the arbitrator may be raised by the contractor before the Arbitral Tribunal itself. Interpreting the agreement, this Court held: (Newton Engg. and Chemicals case 12, SCC p. 46, paras 7-8) "7. Having regard to the express, clear and unequivocal arbitration clause between the parties that the disputes between them shall be referred to the sole arbitration of ED (NR) of the Corporation and, if ED (NR) was unable or unwilling to act as the sole arbitrator, the matter shall be referred to the person designated by such ED (NR) in his place who was willing to act as sole arbitrator and, if none of ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 37 2025:HHC:24169 them is able to act as an arbitrator, no other person should act as arbitrator, the appointment of Director .
(Marketing) or his nominee as a sole arbitrator by the Corporation cannot be sustained. If the office of ED (NR) ceased to exist in the Corporation and the parties were unable to reach to any agreed solution, the arbitration clause did not survive and has to be treated as having worked its course. According to the arbitration clause, sole arbitrator would be ED (NR) or his nominee and no one else. In the r circumstances, it was not open to either of the parties to unilaterally appoint any arbitrator for resolution of the disputes. Sections 11(6)(c), 13 and 15 of the 1996 Act have no application in the light of the reasons indicated above.
8. In this view of the matter, the impugned order dated 8-11-200613 has to be set aside and it is set aside. The appointment of Respondent 3 as sole arbitrator to adjudicate the disputes between the parties is also set aside. The proceedings, if any, carried out by the arbitrator are declared to be of no legal consequence. It will be open to the contractor, the appellant to pursue appropriate ordinary civil proceedings for redressal of its grievance in accordance with law."
The aforesaid decision clearly lays down that it is not open to either of the parties to unilaterally appoint an arbitrator for resolution of the disputes in a situation that had arisen in the said case."
45. In Bharat Broadband Network Limited Vs. United ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 38 2025:HHC:24169 Telecoms Limited, (2019) 5 Supreme Court Cases 755, Hon'ble Supreme Court has been pleased to hold as under:-
.
"14. From a conspectus of the above decisions, it is clear that Section 12(1), as substituted by the Arbitration and Conciliation (Amendment) Act, 2015 ["the Amendment Act, 2015"], makes it clear that when a person is approached in connection with his possible appointment as an arbitrator, it is his duty to disclose in writing any circumstances which are likely to give rise to justifiable doubts as to his independence or impartiality. The disclosure is to be made in the form specified in the Sixth Schedule, and the grounds stated in the Fifth Schedule are to serve as a guide in determining whether circumstances exist which give rise to justifiable doubts as to the independence or impartiality 9 of an arbitrator.
Once this is done, the appointment of the arbitrator may be challenged on the ground that justifiable doubts have arisen under sub-section (3) of Section 12 subject to the caveat entered by sub-section (4) of Section 12. The challenge procedure is then set out in Section 13, together with the time-limit laid down in Section 13(2). What is important to note is that the Arbitral Tribunal must first decide on the said challenge, and if it is not successful, the Tribunal shall continue the proceedings and make an award. It is only post award that the party challenging the appointment of an arbitrator may make an application for setting aside such an award in accordance with Section 34 of the Act."
46. In Newton Engineering and Chemicals Limited Vs. Indian Oil Corporation Limited and others, (2013) 4 Supreme Court Cases ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 39 2025:HHC:24169 44, Hon'ble Supreme Court has been pleased to hold as under:-
"7. Having regard to the express, clear and unequivocal .
arbitration clause between the parties that the disputes between them shall be referred to the sole arbitration of the ED (NR) of the Corporation and, if ED (NR) was unable or unwilling to act as the sole arbitrator, the matter shall be referred to the person designated by such ED (NR) in his place who was willing to act as sole arbitrator and, if none of them is able to act as an arbitrator, no other person should act as arbitrator, the appointment of Director (Marketing) or his nominee as a sole arbitrator by the Corporation cannot be sustained. If the office of ED (NR) ceased to exist in the Corporation and the parties were unable to reach to any agreed solution, the arbitration clause did not survive and has to be treated as having worked its course. According to the arbitration clause, sole arbitrator would be ED (NR) or his nominee and no one else. In the circumstances, it was not open to either of the parties to unilaterally appoint any arbitrator for resolution of the disputes. Sections 11(6)(c), 13 and 15 of the 1996 Act have no application in the light of the reasons indicated above.
8. In this view of the matter, the impugned order dated 8-11-2006 has to be set aside and it is set aside. The appointment of Respondent 3 as sole arbitrator to adjudicate the disputes between the parties is also set aside. The proceedings, if any, carried out by the arbitrator are declared to be of no legal consequence. It will be open to the contractor, the appellant to pursue appropriate ordinary civil proceedings for redressal of its ::: Downloaded on - 25/07/2025 21:20:49 :::CIS
40 2025:HHC:24169 grievance in accordance with law."
47. None of the judgments cited by learned Senior Counsel .
for the petitioners are of assistance to the petitioner, for the reason that in none of the said cases the fact position was akin to that in the present petitions. In none of the judgments cited on behalf of the petitioner Hon'ble Supreme Court has been pleased to hold that after the rejection of an application filed by a party under Section 11 (6) of the Arbitration and Conciliation Act for appointment of an Arbitrator and without raising a formal protest in terms of the provisions of Section 13 (2) (3) of the Act, challenging the Arbitral Tribunal in the mode an manner in which it should be challenged, such like party can still assail the Award under Section 34 of the Arbitration and Conciliation Act, on the ground that appointment of the Arbitrator was bad more so when the party did not even choose to appear before the learned Arbitrator after dismissal of its petitions under Section 11(6) of the Arbitration and Conciliation Act by the High Court.
48. On the other hand, in the judgment referred by learned counsel for the respondent Hon'ble Supreme Court of India has been pleased to hold in Haryana Tourism Limitd Vs. Kandhari Beverages Limited, (2022) 3 Supreme Court Cases 237, Hon'ble Supreme Court in Para-7 thereof has been pleased to hold on the question of jurisdiction of the Arbitrator that once issue was raised and dealt ::: Downloaded on - 25/07/2025 21:20:49 :::CIS 41 2025:HHC:24169 with by the High Court and the objection of the party was overruled by the High Court against which no Appeal was preferred by the .
party, thereafter it was not open for the said party to challenge the jurisdiction of the Arbitrator.
49. As already observed hereinabove, otherwise also, nothing prevented the petitioner from appearing before the learned Arbitrator in the arbitral proceedings after the rejection of its petitions filed under Section 11 (6) of the Arbitration and Conciliation Act and therein raising an objection with regard to the validity of constitution of the Arbitral Tribunal. It is reiterated that in the application which was filed by the petitioner before the learned Arbitrator all that was mentioned was that as the petitioner was filing applications under Section 11(6) of the Act, therefore, the Arbitrator should await the outcome thereof.
50. Accordingly, in the light of the above discussion and observations, as this Court does not finds any merit in these petitions, the same are dismissed. Pending miscellaneous application(s), if any also stand disposed of accordingly.
(Ajay Mohan Goel) Judge July 14, 2025 (Rishi) ::: Downloaded on - 25/07/2025 21:20:49 :::CIS