Delhi High Court
Shri Ravinder Singh Chauhan vs Shri Prashant Mamgain & Anr. on 7 September, 2009
Author: Shiv Narayan Dhingra
Bench: Shiv Narayan Dhingra
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Reserve: September 01, 2009
Date of Order: September 07, 2009
+ AA No.270/2008
% 07.09.2009
SHRI RAVINDER SINGH CHAUHAN .... Petitioner
Through : Mr. K.K.Jha, Adv.
Versus
SHRI PRASHANT MAMGAIN & ANR. .... Respondents
Through: Mr. Varun Agarwal, Adv.
JUSTICE SHIV NARAYAN DHINGRA
1. Whether reporters of local papers may be allowed to see the
judgment?
2. To be referred to the reporter or not?
3. Whether judgment should be reported in Digest?
JUDGMENT
1. This petition has been filed under Section 8 of the Arbitration and Conciliation Act. Section 8 has been wrongly mentioned while the petition is under Section 14 of the Arbitration and Conciliation Act wherein the petitioner has made a prayer that the Court should appoint an independent Arbitrator to resolve the dispute between the parties and the arbitration proceedings initiated by Mr. M.L. Aggarwal be stayed since Mr. M.L.Aggarwal had no mandate to arbitrate between the parties.
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2. Brief facts relevant for purpose of deciding this petition are that agreement dated 15th March, 2009 between the parties provided for appointment of Arbitrator in following terms:-
"And whereas if any time any dispute may arise between the parties, then they shall appoint a mutually decided person, whose decision shall be binding on both the parties or Shri ________________(left blank)_________ shall act as a arbitrator, whose decision will be binding on both the parties in every circumstances."
3. The petitioner herein vide a notice dated 17th June, 2006 invoked arbitration clause and called upon the respondent to appoint an independent Arbitrator in terms of the agreement for resolution of the dispute. The respondent vide letter dated 8th May, 2008 informed the petitioner that he has appointed Mr. M.L.Aggarwal, a retired Judge of UP Higher Judicial Services as the Arbitrator for hearing and adjudicating the dispute. Thereafter, Mr. M.L. Aggarwal, initiated proceedings and the petitioner sought an adjournment from the Arbitrator and later on counsel for the petitioner vide notice informed the Arbitrator that the appointment of the Arbitrator was not in terms of the agreement. The Arbitrator was to be appointed with the consent of both the parties and since he was not appointed with consent of the petitioner therefore the petitioner would be approaching the appropriate forum for appointment of an independent Arbitrator and told the Arbitrator to adjourn the proceedings. The present petition has been filed by the petitioner, though under Section 8, with a request that Court should appoint an independent Arbitrator since the AA No.270/2008 Page 2 of 5 Arbitrator, Mr. M.L.Aggarwal does not have mandate to proceed with the arbitration proceedings.
4. The respondent pleaded that the Arbitrator was appointed in response to the petitioner's letter to the respondent for appointment of Arbitrator, the petitioner cannot take a plea that consent of the petitioner was not obtained since the petitioner himself wrote to the respondent for appointment of an independent Arbitrator.
5. An Arbitrator has to be appointed in accordance with the terms of the agreement. The agreement provided that an Arbitrator has to be a person mutually decided by both the parties. In the present case, the respondent did not obtain consent of the petitioner for appointing Mr. M.L.Aggarwal and did not ask if the name of Mr. M.L.Aggarwal was agreeable to him or not and appointed Mr. M.L.Agarwal as the Arbitrator. Section 11(5) provides that where an agreement is there between the parties for appointing the Arbitrator, the parties have to abide by the agreement and in case there was no agreement between the parties regarding appointment of the sole Arbitrator by mutual agreement and parties fail to agree on the Arbitrator within 30 days from receipt of a request by one party from the other party, the appointment shall be made on the request of a party, by the Chief Justice or any person or institution designated by him.
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6. Thus, section 11(5) provides the remedy where notice is given by one party to appoint an Arbitrator in terms of the arbitration agreement (by mutual consent) but the other party does not act on this notice. The remedy is to approach the Court for appointment of Arbitrator. The respondent in this case was obliged to obtain the consent of the petitioner on the name of Mr. M.L. Aggarwal and in case the petitioner gave his consent then only Mr. M.L.Aggarwal could have acted as an Arbitrator. Merely because Mr. M.L. Aggarwal, on being appointed by the respondent, started arbitration proceedings and the petitioner appeared before him and sought an adjournment would not mean that the petitioner gave consent to the name of Mr.M.L.Aggarwal. The petitioner in this case practically did not participate in the arbitration proceedings and on the first hearing itself he sought an adjournment though on the ground of illness but the next step taken by the petitioner was to send a notice to the Arbitrator and to the respondent that he was not agreeable to the name of the Arbitrator. Under these circumstances, I consider that the Arbitrator appointed by the respondent, without consent of the petitioner, had no authority to proceed with the arbitration proceedings and de jure was not an Arbitrator in accordance with the terms of the agreement between the parties. I therefore allow this application and the mandate of Mr. M.L. Aggarwal, Arbitrator is terminated. Since a request has also been made for appointment of an Arbitrator in terms of Section 11(5), I appoint Sh.D.S.Pawaria, retired Additional District AA No.270/2008 Page 4 of 5 Judge (Mobile No. 9810433390) as the Arbitrator between the parties to adjudicate the dispute.
The parties shall appear before Sh.D.S.Pawaria within 30 days of this order and file their respective claims and counter claims. The Arbitrator shall fix his own reasonable fee.
September 07, 2009 SHIV NARAYAN DHINGRA J.
ak
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