Madras High Court
V. Dinesh Prasad vs / on 7 December, 2021
Author: Senthilkumar Ramamoorthy
Bench: Senthilkumar Ramamoorthy
Arb.O.P.(Comm.Div).No.169 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 07.12.2021
Coram:
THE HONOURABLE MR. JUSTICE SENTHILKUMAR RAMAMOORTHY
Arbitration Original Petition (Comm.Div).No.169 of 2021
V. Dinesh Prasad,
S/o.Velusamy,
Partner M/s.Hotel Royal Castle Inn,
D.No.26A, BKR Nagar,
Gandhipuram, Coimbatore. ... Petitioner
/versus/
K.B.Prabhu,
S/o.C.Balasubramanian,
Partner M/s.Hotel Royal Castle Inn,
No.145, 7th Street Extension,
Gandhipuram, Coimbatore. ... Respondent
Prayer: This Arbitration Original Petition is filed under Section 11(5) of the
Arbitration and Conciliation Act, 1996, praying to appoint an impartial and
independent Arbitrator in terms of clause 17 of the Deed of Partnership dated
27.08.2010, between the petitioner and the respondent and to direct the respondent
to pay the costs of this petition.
For Petitioner : Mr.P.Saravana Sowmiyan
For Respondent : Mr.A.Thiyagarajan
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Arb.O.P.(Comm.Div).No.169 of 2021
ORDER
The petitioner seeks appointment of an arbitrator in terms of clause 17 of the Partnership Deed dated 27.08.2010 between the petitioner and the respondent.
2. The petitioner states that a dispute arose between the petitioner and the respondent with regard to the affairs of the partnership firm, which carried on business under the name and style of M/s.Hotel Royal Castle Inn. By notice dated 16.10.2020, the respondent invoked the arbitration clause and called upon the petitioner to consent to the proposed appointment of a retired District Judge as a sole arbitrator. By a subsequent notice dated 30.12.2020, the respondent proposed the name of a different retired District Judge in view of the death of the person whose name was proposed earlier. The petitioner states that he sent a reply dated 08.07.2021 objecting to the unilateral appointment of a sole arbitrator.
3. Meanwhile, it appears that the sole arbitrator proposed by the respondent entered upon reference and scheduled the first hearing on 31.05.2021. The petitioner asserts that he objected to the conduct of proceedings by the sole arbitrator and, in fact, filed a petition under Section 16 of the Arbitration and Conciliation Act 1996 (the Arbitration Act) before such arbitrator. The present Page 2 of 6 https://www.mhc.tn.gov.in/judis Arb.O.P.(Comm.Div).No.169 of 2021 petition is filed under these facts and circumstances.
4. Learned counsel for the petitioner relies on the judgment of the Hon'ble Supreme Court in Perkins Eastman Architects DPC and another -vs- HSCC (India) Ltd reported in 2019 SCC Online SC 1517 and contends that the Hon'ble Supreme Court frowned upon such unilateral appointments. He further contends that he had objected to the conduct of proceedings by the sole arbitrator and even preferred a petition under Section 16 of the Arbitration Act in respect thereof.
5. The respondent refutes the above contentions. He submits that he had duly issued a notice to the petitioner on 30.12.2020 with regard to the proposed appointment of the sole arbitrator. In spite of receiving notice, it is stated that the petitioner herein did not reply to the same. The respondent further contends that the sole arbitrator entered upon reference and conducted about 16 hearings. Therefore, it is stated that the petitioner acquiesced in the conduct of arbitration proceedings and impliedly waived his right to object to the constitution of the arbitral tribunal.
6. Pursuant to the notice dated 30.12.2020, it appears that the statement of Page 3 of 6 https://www.mhc.tn.gov.in/judis Arb.O.P.(Comm.Div).No.169 of 2021 claim was filed by the respondent. Shortly thereafter, by communication dated 08.07.2021, the petitioner has stated categorically that he has not consented to the appointment of the arbitrator. In light of the said communication, it cannot be said that the petitioner herein acquiesced in the conduct of arbitration proceedings by the sole arbitrator or waived his right in such regard.
7. As correctly contended by learned counsel for the petitioner, a petition under Section 11 of the Arbitration and Conciliation Act is maintainable if one party to the arbitration agreement makes an unilateral appointment in contravention of the arbitration agreement. Although learned counsel for the respondent points out that the petitioner herein appeared before the arbitral tribunal and even filed a vakalatnama through counsel, an inference of waiver or acquiescence cannot be drawn on such basis in light of the communication dated 08.07.2021, and the submission that a petition was filed under Section 16 of the Arbitration Act subsequently.
8. In the above facts and circumstances, the present petition is liable to allowed. Accordingly, T.Balakrishnan retired District Judge, No.1/103, Vasantha Nagar Extension, Somarasampettai, Tiruchirappalli 620102 (Mobile Page 4 of 6 https://www.mhc.tn.gov.in/judis Arb.O.P.(Comm.Div).No.169 of 2021 No.9443174737) is hereby appointed as the sole arbitrator to adjudicate the dispute between the parties. The sole arbitrator is directed to enter upon reference and fix his fees and expenses in accordance with law. As a corollary to the above conclusion, it is recorded that the mandate of the present sole arbitrator stands terminated. It is open to the respondent herein to include amounts paid as fees to the present sole arbitrator in his cost claim in the arbitral proceedings.
07.12.2021
Index : No.
Internet : Yes.
bsm
SENTHILKUMAR RAMAMOORTHY,J.
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Arb.O.P.(Comm.Div).No.169 of 2021
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Arb.O.P.(Comm.Div).No.169 of 2021
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