Delhi High Court - Orders
Shri Ram Pistons & Rings Ltd vs M/S. Kaushik Fabricators & Anr on 11 August, 2020
Author: Jyoti Singh
Bench: Jyoti Singh
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB. P. 648/2019
SHRI RAM PISTONS & RINGS LTD. ..... Petitioner
Through Mr. Abhishek Bhardwaj, Advocate
versus
M/S. KAUSHIK FABRICATORS & ANR. ..... Respondents
Through None
CORAM:
HON'BLE MS. JUSTICE JYOTI SINGH
ORDER
% 11.08.2020 Hearing has been conducted through Video Conferencing.
IA No.5887/2020This is an application filed by the Petitioner seeking recall of the order dated 30.01.2020 passed by this Court. Prayers in the Application are as under :
a) Allow the present application and pass appropriate orders for appointment of a neutral arbitrator in place of Sh Brijesh Sharma and may also refer the matter to Delhi International Arbitration Centre, in the interest of justice.
b) pass any other orders as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case in favour of the petitioner and against the respondent."
Applicant/Petitioner in the Application has averred in para 3 that the relief sought is to the limited extent that a neutral Arbitrator in place of the Arbitrator already appointed, pursuant to the Order of this Court under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') be appointed and the matter be referred to Delhi International Arbitration Centre. For ready reference para 3 of the application is extracted hereunder :
"3. That therefore the present application is being moved to the limited extent that a neutral arbitrator in place of Mr. Brijesh Sharma be appointed to adjudicate the arbitration between the parties and the matter be referred to Delhi International Arbitration Centre, Delhi High Court."
In sum and substance, Petitioner is seeking directions of this Court for appointing a substitute Arbitrator. In my view, no such power exists with this Court to recall the order passed under Section 11(6) of the Act and appoint a substitute Arbitrator. The law as laid down repeatedly in various judgements is that Section 11(6) of the Act can be invoked only once. Arbitrator in the present case has also entered Reference as mentioned in the Application, on 04.03.2020.
I am supported in my view by a judgement of the Supreme Court in Antrix Corporation Ltd. Vs. Devas Multimedia Pvt. Ltd., (2014) 11 SCC
560. Supreme Court has in so many words clearly held that once the Arbitration Agreement has been invoked by a party and a nominee Arbitrator had also been appointed by it, the Arbitration Agreement could not have been invoked for a second time by the Petitioner. It would lead to an anomalous state of affairs if the appointment of an Arbitrator once made, could be questioned in subsequent proceedings initiated by the other party for appointment of an Arbitrator. Supreme Court held that while the Petitioner was certainly entitled to challenge the appointment of the Arbitrator at the instance of the Petitioner, it could not do so by way of independent proceedings under Section 11(6) of the Act. While power has been vested in the Chief Justice to appoint an Arbitrator under Section 11(6) of the Act, such appointment can be questioned under Section 13 of the Act. In a proceeding under Section 11 of the Act, the Chief Justice cannot replace one Arbitrator already appointed in exercise of the Arbitration Agreement.
Supreme Court further held that once the power has been exercised by a Court under the Arbitration Agreement, there is no power left to, once again, refer the same disputes to Arbitration under Section 11 of the Act, unless the order closing the proceedings is subsequently set aside. Relevant paras of the judgement of the Supreme Court are extracted hereunder :
"31. The matter is not as complex as it seems and in our view, once the arbitration agreement had been invoked by Devas and a nominee arbitrator had also been appointed by it, the arbitration agreement could not have been invoked for a second time by the petitioner, which was fully aware of the appointment made by the respondent. It would lead to an anomalous state of affairs if the appointment of an arbitrator once made, could be questioned in a subsequent proceeding initiated by the other party also for the appointment of an arbitrator. In our view, while the petitioner was certainly entitled to challenge the appointment of the arbitrator at the instance of Devas, it could not do so by way of an independent proceeding under Section 11(6) of the 1996 Act. While power has been vested in the Chief Justice to appoint an arbitrator under Section 11(6) of the 1996 Act, such appointment can be questioned under Section 13 thereof. In a proceeding under Section 11 of the 1996 Act, the Chief Justice cannot replace one arbitrator already appointed in exercise of the arbitration agreement.
xxx xxx xxx
33. Sub-section (6) of Section 11 of the 1996 Act, quite categorically provides that where the parties fail to act in terms of a procedure agreed upon by them, the provisions of sub-section (6) may be invoked by any of the parties. Where in terms of the agreement, the arbitration clause has already been invoked by one of the parties thereto under the ICC Rules, the provisions of sub-section (6) cannot be invoked again, and, in case the other party is dissatisfied or aggrieved by the appointment of an arbitrator in terms of the agreement, his/its remedy would be by way of a petition under Section 13, and, thereafter, under Section 34 of the 1996 Act.
34. The law is well settled that where an arbitrator had already been appointed and intimation thereof had been conveyed to the other party, a separate application for appointment of an arbitrator is not maintainable. Once the power has been exercised under the arbitration agreement, there is no power left to, once again, refer the same disputes to arbitration under Section 11 of the 1996 Act, unless the order closing the proceedings is subsequently set aside. In Som Datt Builders (P) Ltd. v. State of Punjab [AIR 2006 P&H 124 : (2006) 3 RAJ 144] , the Division Bench of the Punjab and Haryana High Court held, and we agree with the finding, that when the Arbitral Tribunal is already seized of the disputes between the parties to the arbitration agreement, constitution of another Arbitral Tribunal in respect of those same issues which are already pending before the Arbitral Tribunal for adjudication, would be without jurisdiction.
35. In view of the language of Article 20 of the arbitration agreement which provided that the arbitration proceedings would be held in accordance with the rules and procedures of the International Chamber of Commerce or Uncitral, Devas was entitled to invoke the Rules of Arbitration of ICC for the conduct of the arbitration proceedings. Article 19 of the agreement provided that the rights and responsibilities of the parties thereunder would be subject to and construed in accordance with the laws of India. There is, therefore, a clear distinction between the law which was to operate as the governing law of the agreement and the law which was to govern the arbitration proceedings. Once the provisions of the ICC Rules of Arbitration had been invoked by Devas, the proceedings initiated thereunder could not be interfered with in a proceeding under Section 11 of the 1996 Act. The invocation of the ICC Rules would, of course, be subject to challenge in appropriate proceedings but not by way of an application under Section 11(6) of the 1996 Act. Where the parties had agreed that the procedure for the arbitration would be governed by the ICC Rules, the same would necessarily include the appointment of an Arbitral Tribunal in terms of the arbitration agreement and the said Rules. Arbitration Petition No. 20 of 2011 under Section 11(6) of the 1996 Act for the appointment of an arbitrator must, therefore, fail and is rejected, but this will not prevent the petitioner from taking recourse to other provisions of the aforesaid Act for appropriate relief."
Learned Counsel for the Petitioner seeks to rely on a judgement passed by Orissa High Court in Kishore Kumar Sahoo vs. Lafarge India Pvt. Ltd. and Ors., CLT (2007) Supplement 213. Relevant part of the judgment reads as under :-
"9. I am of the opinion that even if the power under Section 11 of the said Act is not a power given to a Court, but is a power given to the Chief Justice. The Chief Justice, being the highest judicial authority of the State, has the inherent power of doing justice and in a given case, the power of recall of an order passed by him-previously, which is a judicial one, is incidental to such inherent power of the Chief Justice. Therefore, Misc. Application No. 17 of 2007, which is an application for recalling the previous order is maintainable."
Reliance on the judgment of the Orissa High Court cannot inure to the advantage of the Petitioner. In the said case the recall application was filed on the ground that the Court had no territorial jurisdiction to entertain the petition and in any case the recall application was dismissed. Moreover, in view of the dicta of the Supreme Court in the judgement referred to above in Antrix Corporation Ltd. (supra), the present application cannot be entertained by this Court. Learned counsel has also relied on Article 215 of the Constitution of India to contend that this Court has wide powers of recall/review of its order. Section 11(6) of the Act which has been invoked herein is a provision under the Arbitration and Conciliation Act, 1996 and as per the law laid down by the Supreme Court in Antrix Corporation Ltd. (supra), the Arbitrator appointed can neither be substituted nor his mandate can be terminated and therefore, there is no merit in the contention of the Petitioner that the general powers available to a Court for recall / review can be exercised to appoint a fresh Arbitrator.
The Petitioner may have a remedy in law to seek substitution of the Arbitrator or for termination of his mandate but the said remedy lies elsewhere and Section 11(6) of the Act cannot be invoked for the said purpose.
The application has no merit and is accordingly dismissed giving liberty to the Petitioner to take recourse to any other remedy available to it under law.
JYOTI SINGH, J AUGUST 11, 2020 yg