Bombay High Court
Deepak Nitrite Limited vs Union Of India Through Advocate For ... on 26 November, 2019
Equivalent citations: AIRONLINE 2019 BOM 2833
Author: G. S. Patel
Bench: G.S. Patel
906-CARAP62-09.DOC
Arun
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMM ARBITRATION APPLICATION NO. 62 OF 2019
Deepak Nitrate Limited ...Applicant
Versus
Union of India ...Respondent
Mr A Mishra, with Mr Aditya Udehsi and Mr Netaji Gawade, i/b M/s
Sanjay Udeshi & Co, for the Applicant.
Mr BB Sharma, with DP Singh and Pawan Patil, for the Respondent.
CORAM: G.S. PATEL, J.
DATED: 26th November 2019 PC:-
1. The petitioner, a Gujarat-based company, participated in an open tender issued by the respondent, the Union of India through the Ministry of Defence ("MOD") on 10th January 2011. The tender was initially for the supply of 6265 metric tones of Ortho Nitro Toluene at the respondent's factory in Khadki. A copy of the tender is annexed. It seems that the tender quantity was reduced to 4094 metric tones. The petitioner sent a fresh quotation on 26th May 2011. There followed certain clarifcations at the petitioner's instance. Finally a supply order was issued by the MOD to the petitioner on 19th September 2011 taking into account all these factors. The entire contract was governed by the terms and Page 1 of 9 26th November 2019 ::: Uploaded on - 27/11/2019 ::: Downloaded on - 28/11/2019 00:20:09 ::: 906-CARAP62-09.DOC conditions incorporated in the tender document read with the terms and conditions set out in the supply order itself. Collectively this is what is called the contract.
2. At this stage, I am not concerned with the details of the disputes. There can be no dispute that clause 21 of the standard terms and conditions has a provision for arbitration. This is how it reads:
"21. Arbitration Clause: All disputes and diferences arising out of or in any way touching or concerning this agreement (Except those for which specifc performance has been made therein) shall be referred Sole Arbitrator to be appointed by the Director General Ordnance, Government of India. The Arbitrator so appointed shall be Government servant who had not deals with the matters to which this agreement relates and in course of his duties had not expressed views on all or any the matter in disputes of diferences. The arbitral award of the sole arbitrator shall be fnal and binding on the parties. The venue of the arbitration shall be Khadki."
3. There is no dispute about the existence of the agreement. In fact, arbitration was invoked on 1st August 2016, and an arbitrator was appointed in terms of the contract, one Ashok Kumar, the Joint General Manager, Ordnance. He did enter upon the reference. There were some questions about his disqualifcation or ineligibility within the meaning of Section 12 read with VIIth schedule of the Arbitration and Conciliation Act. Before the erstwhile arbitrator, it seems that pleadings were fled but nothing further happened. The period of one year elapsed without any further progress in Page 2 of 9 26th November 2019 ::: Uploaded on - 27/11/2019 ::: Downloaded on - 28/11/2019 00:20:09 ::: 906-CARAP62-09.DOC arbitration. The matter in arbitration rested with the directions issued on 28th July 2018. A typed copy of these is at pages 105 to 106 and is counter-signed by representatives of both parties.
4. Obviously this state of afairs cannot be allowed to continue. Before the arbitrator appointed in terms of the contract parties did fle pleadings, and they did sign or counter sign the last procedural order dated 28th July 2018, and they are willing to have their disputes resolved by arbitration. Mr Sharma for the respondent does not oppose arbitration, but has no instructions to agree to a name.
5. It is in these circumstances that the petitioner has been compelled to fle the present petition invoking Section 29-A of the Arbitration and Conciliation Act read with Section 11.
6. Under the Arbitration Act, Section 29-A and in particular 29- A (5) confers a level of discretion on the Court. More importantly for our present purposes is the wording of Section 29-A(6). For easy reference I will reproduced the whole of Section 29-A:
29A. Time limit for arbitral award.-- (1) The award shall be made within a period of twelve months from the date the arbitral tribunal enters upon the reference.
Explanation.-- For the purpose of this sub-section, an arbitral tribunal shall be deemed to have entered upon the reference on the date on which the arbitrator or all the arbitrators, as the case may be, have received notice, in writing of their appointment.Page 3 of 9
26th November 2019 ::: Uploaded on - 27/11/2019 ::: Downloaded on - 28/11/2019 00:20:09 ::: 906-CARAP62-09.DOC (2) If the award is mad within a period of six months from the date the arbitral tribunal enters upon the reference, the arbitral tribunal shall be entitled to receive such amount of additional fees as the parties may agree.
(3) The parties may, by consent, extend the period specifed in sub-section (1) for making award for a further period not exceeding six months.
(4) If the award is not made within the period specifed in sub-section (1) or the extended period specifed under sub-section (3), the mandate of the arbitrator(s) shall terminate unless the Court has, either prior to or after the expiry of the period so specifed, extended the period:
Provided that while extending the period under this sub-section, if the Court fnds that the proceedings have been delayed for the reasons attributable to the arbitral tribunal, then, it may order reduction of fees of arbitrator(s) by not exceeding fve per cent. for each month of such delay.
(5) The extension of period referred to in sub-section (4) may be on the application of any of the parties and may be granted only for sufcient cause and on such terms and conditions as may be imposed by the Court.
(6) While extending the period referred to in sub-
section (4), it shall be open to the Court to substitute one or all of the arbitrators and if one or all of the arbitrators are substituted, the arbitral proceedings shall continue from the stage already reached and on the basis of the evidence and material already on record, and the arbitrator(s) appointed under this section shall be deemed to have received the said evidence and material.
(7) In the event of arbitrator(s) being appointed under this section, the arbitral tribunal thus reconstituted shall be Page 4 of 9 26th November 2019 ::: Uploaded on - 27/11/2019 ::: Downloaded on - 28/11/2019 00:20:09 ::: 906-CARAP62-09.DOC deemed to be in continuation of the previously appointed arbitral tribunal.
(8) It shall be open to the Court to impose actual or exemplary costs upon any of the parties under this section.
(9) An application fled under sub-section (5) shall be disposed of by the Court as expeditiously as possible and endeavour shall be made to dispose of the matter within a period of sixty days from the date of service of notice on the opposite party.
(Emphasis added)
7. Thus there is authority and discretion in the Court not only in terms of sub-section (5) but also in terms of sub-section (6), by which the Court, while extending the period referred to in sub- section (4) may substitute one or all of the arbitrators. This is in fact the power invoked and, having regard to the reasonable approach of both sides, I can see no reason to refuse the relief.
8. There can be no question, however, shifting the venue of arbitration which is at Khadki. The optimal solution, in my view to appoint an advocate from Pune who will be able to attend the matter at that venue. I nominate Mr Yuvraj Narvankar, advocate to act and serve as a sole arbitrator to decide the disputes and diferences between the parties.
(a) Appointment of Arbitrator: By consent, Mr Yuvraj P Narvankar is hereby nominated to act as a Sole Arbitrator to decide the disputes and diferences between the parties.
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(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 today of the order being uploaded.
(ii) In addition, within one week of this order being uploaded, the Registry will forward an ordinary copy of this order to the learned Sole Arbitrator at the following postal and email addresses:
Arbitrator Mr Yuvraj P Narvankar
Address At Mumbai:
101, 1st foor, Natwar Chamber,
94, Nagindas Master Road, Fort,
Mumbai 400 001.
Phone No. 022-22674223.
At Pune:
Shankar Apartment Premises,
113/2 B, Income Tax Lane,
Prabhat Road, Pune
Mobile 9822787631
Email [email protected]
(c) Disclosure: The learned Sole Arbitrator is requested to
forward his statement of disclosure under Section 11(8) read with Section 12(1) of the Arbitration Act to the Prothonotary and Senior Master of this Court, referencing this arbitration application, as soon as Page 6 of 9 26th November 2019 ::: Uploaded on - 27/11/2019 ::: Downloaded on - 28/11/2019 00:20:09 ::: 906-CARAP62-09.DOC possible, and in any case sufciently in advance of his entering upon the reference to his arbitration. That statement will be retained by the Prothonotary & Senior Master on the fle of this application. Copies will be given to both sides.
(d) Appearance before the Arbitrator: Parties will appear before the learned Sole Arbitrator on such date and at such place as he nominates to obtain appropriate directions in regard to fxing 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 within one week of this order being uploaded. The information is to include a valid and functional email address.
(f ) Interim Application/s:
(i) Liberty to both sides 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. Any such application will be decided in such manner and within such time as the learned Sole Arbitrator deems ft.Page 7 of 9
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(ii) The learned Sole Arbitrator is requested to dispose of all interim applications at the earliest.
(g) Fees: The arbitral tribunal's fees shall be governed by the Bombay High Court (Fee Payable to Arbitrators) Rules, 2018.
(h) 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 frst instance.
(i) 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 fnd it necessary.
(j) Venue and seat of arbitration: Parties agree that the venue and seat of the arbitration will be in Khadki.
9. It is clarifed that the arbitral mandate for Mr Narvankar will commence afresh from the date that he enters upon the reference to his arbitration. This is necessary to avoid all complications.
10. Parties are directed to tender before the learned sole arbitrator, Mr Narvankar, true copies of the pleadings that they fled before the previous sole arbitrator. It will be open to the parties to apply before the learned sole arbitrator for leave to fle additional pleadings or to amend the existing pleadings. The learned Sole Page 8 of 9 26th November 2019 ::: Uploaded on - 27/11/2019 ::: Downloaded on - 28/11/2019 00:20:09 ::: 906-CARAP62-09.DOC Arbitrator is requested to dispose of any such application at the earliest possible on merits.
11. The application is disposed of in these terms. There will be no order as to costs.
(G. S. PATEL, J) Page 9 of 9 26th November 2019 ::: Uploaded on - 27/11/2019 ::: Downloaded on - 28/11/2019 00:20:09 :::