Himachal Pradesh High Court
Roshan Thakur vs State Of H.P. & Others on 2 December, 2022
Author: A.A. Sayed
Bench: A.A. Sayed
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
Arbitration Case No.184 of 2022
.
Decided on: 02.12.2022
Roshan Thakur ...Petitioner
Versus
State of H.P. & others ...Respondents
Coram
The Hon'ble Mr. Justice A.A. Sayed, Chief Justice
Whether approved for reporting?
For the petitioner:
r Mr. Neeraj Sharma, Advocate.
For the respondents: Mr. Yudhvir Singh Thakur, Deputy
Advocate General.
A.A. Sayed, Chief Justice (Oral)
This is an application filed by the petitioner, under Section 11(6) of the Arbitration and Conciliation Act, 1996, (for short 'the Act'), seeking appointment of an Arbitrator to adjudicate the disputes and differences between the parties.
2. Pursuant to a tender issued by the respondents, the petitioner was awarded work of widening of Chaned Bhanota Road Km. 0/0 to 3/0 (SH:- Formation Cutting, Retaining Walls, Breast Walls, Cross Drainage work, Construction of PCC Drain and providing/laying metalling/tarring).
3. An Agreement was executed between the parties. It is not in dispute that Clause 25 of the Agreement provides for ::: Downloaded on - 24/12/2022 10:01:02 :::CIS 2 reference of the disputes to arbitration. Under Clause 25, the disputes between the parties are to be referred to arbitration of a .
person appointed by the Engineer-in-Chief/Chief Engineer, HPPWD.
4. Disputes and differences arose between the parties under the Agreement. The petitioner invoked arbitration vide notice dated 3rd December, 2021, proposing the name of an Advocate to act as Arbitrator. The respondents failed to reply to the said notice invoking arbitration and did not act upon the said notice.
5. Learned Deputy Advocate General has placed on record written instructions dated 16th November, 2022. Prima facie, I am not inclined to accept the contention of the learned Deputy Advocate General that the claim of the petitioner would be barred by limitation. It is, however, left open to the respondents to raise the issue of limitation before the learned Arbitrator appointed by this order.
6. In Datar Switchgears Ltd. Versus Tata Finance Ltd. and another, (2000) 8 Supreme Court Cases 151, the Supreme Court has held in paragraph 19 that upon the filing of the application under Section 11(6) of the Act, the right of the ::: Downloaded on - 24/12/2022 10:01:02 :::CIS 3 opposite side to make appointment of Arbitrator ceases/is forfeited.
.
7. Moreover, in Perkins Eastman Architects DPC and another Versus HSCC (India) Limited, (2020) 20 Supreme Court Cases 760, in paragraphs 20 and 21, the Supreme Court has held as follows:-
"20. We thus have two categories of cases. The first, similar to the one dealt with in TRF Limited where the Managing Director himself is named as an arbitrator with an additional power to appoint any other person as an arbitrator. In the second category, the Managing Director is not to act as an arbitrator himself but is empowered or authorised to appoint any other person of his choice or discretion as an arbitrator. If, in the first category of cases, the Managing Director was found incompetent, it was because of the interest that he would be said to be having in the outcome or result of the dispute. The element of invalidity would thus be directly relatable to and arise from the interest that he would be having in such outcome or decision. If that be the test, similar invalidity would always arise and spring even in the second category of cases. If the interest that he has in the outcome of the dispute, is taken to be the basis for the possibility of bias, it will always be present irrespective of whether the matter stands under the first or second category of cases. We are conscious ::: Downloaded on - 24/12/2022 10:01:02 :::CIS 4 that if such deduction is drawn from the decision of this Court in TRF Limited, all cases having clauses similar to that with which we are .
presently concerned, a party to the agreement would be disentitled to make any appointment of an Arbitrator on its own and it would always be available to argue that a party or an official or an authority having interest in the dispute would be disentitled to make appointment of an Arbitrator.
21. But, in our view that has to be the logical deduction from TRF Limited. Para 50 of the r decision shows that this Court was concerned with the issue, "whether the Managing Director, after becoming ineligible by operation of law, is he still eligible to nominate an Arbitrator" The ineligibility referred to therein, was as a result of operation of law, in that a person having an interest in the dispute or in the outcome or decision thereof, must not only be ineligible to act as an arbitrator but must also not be eligible to appoint anyone else as an arbitrator and that such person cannot and should not have any role in charting out any course to the dispute resolution by having the power to appoint an arbitrator. The next sentences in the paragraph, further show that cases where both the parties could nominate respective arbitrators of their choice were found to be completely a different situation. The reason is clear that whatever advantage a party may derive by nominating an arbitrator of its choice would get counter- balanced by equal power with the other party.::: Downloaded on - 24/12/2022 10:01:02 :::CIS 5
But, in a case where only one party has a right to appoint a sole arbitrator, its choice will always have an element of exclusivity in determining or .
charting the course for dispute resolution.
Naturally, the person who has an interest in the outcome or decision of the dispute must not have the power to appoint a sole arbitrator. That has to be taken as the essence of the amendments brought in by the Arbitration and Conciliation (Amendment) Act, 2015 (Act 3 of 2016) and recognised by the decision of this Court in TRF Limited."
8. In view of Section 12(5) of the Act and enunciation of law by the Supreme Court in the aforesaid case, the Engineer-in-
Chief/Chief Engineer, HPPWD, would be ineligible to nominate an Arbitrator.
9. In the facts and circumstances, a case has been made out by the petitioner for this Court to exercise jurisdiction under Section 11(6) of the Act to appoint an independent Arbitrator. Hence, the following order: -
ORDER
(i) Mr. Ankush Dass Sood, Senior Advocate, is appointed as a sole Arbitrator to adjudicate the disputes and differences between the parties;
(ii) The learned Arbitrator, before entering the arbitration reference, shall forward a statement ::: Downloaded on - 24/12/2022 10:01:02 :::CIS 6 of disclosure as per the requirement of Section 11(8) read with Section 12(1) of the Arbitration .
and Conciliation Act, 1996, to the Registrar (Judicial) of this Court (to be placed on record of this application) and a copy thereof be forwarded to the parties;
(iii) The parties shall appear before the learned r to Arbitrator on a date which may be fixed by the learned Arbitrator, not later than four weeks from the date of receipt of copy of this order by him;
(iv) The fees payable to the Arbitral Tribunal shall be as prescribed in the Fourth Schedule appended to the Arbitration and Conciliation Act, 1996;
(v) Office to forward a copy of this order to the learned Arbitrator on the following address:
"Mr. Ankush Dass Sood, Senior Advocate, New House, Jama Masjid, The Mall, Shimla-171001"
9. The application is allowed in the above terms.
( A.A. Sayed ) Chief Justice December 02, 2022 (vt) ::: Downloaded on - 24/12/2022 10:01:02 :::CIS