Andhra HC (Pre-Telangana)
Deepak Galvanising & Engineering ... vs Government Of India And Anr. on 10 September, 1997
Equivalent citations: 1997(5)ALT640
Author: R. Bayapu Reddy
Bench: R. Bayapu Reddy
JUDGMENT R. Bayapu Reddy, J.
1. These two arbitration applications are filed by the same petitioner against the same respondents seeking appointment of an Arbitrator to adjudicate the disputes that have arisen between the petitioner and the respondents in connection with the two separate contract works entered into between them.
2. The petitioner in both the applications is M/s. Deepak Galvanising and Engineering Industries Private Limited, Secunderabad and the respondents relate to the Department of Telecommunications, the 1st respondent being the Government of India, represented by Secretary, Department of Telecommunications, New Delhi and the 2nd respondent being the Director General, Department of Telecommunications, Government of India, New Delhi. The petitioner company undertook the work of fabrication and structuring of Micro Wave Towers as required by the Telecommunications Department. The Telecommunications Department issued Notification dated 27-7-1992 inviting tenders for the manufacture of self supporting towers of the height of 60 mts. and 80 mts. The tenders submitted by the petitioner for both the said works were accepted by the respondent, which issued an advance purchase order dated 24-3-1993 and placed provisional order with the petitioner Company for the supply of 26 Nos. of 60 mts. SS towers and 22 Nos. of 80 mts. SS towers. As per the advance purchase order, the petitioner Company had to furnish a performance security bond in the form of bank guarantee for Rs. 17,00,000/- for both the works. The petitioner accordingly furnished the bank guarantee for Rs. 17,00,000/- on 18-8-1993, which was valid upto 18-8-1996 and it was extended till 18-2-1997. The respondents thereupon placed a firm order on 27-8-1993 with the petitioner-Company for the supply of 26 Nos. of 60 mts. SS towers for a value of Rs. 1,38,84,000/- and the said work had to be completed within six months from the date of purchase order. But on account of the delay occurred on the part of the respondent-Department at every stage namely, supply of drawings, inspecting the towers, giving consignee details etc., the petitioner had to seek extension of time for delivering the towers as agreed upon. Having noticed some defects in the structural stability of the towers constructed by the petitioner, the respondent-Department instructed the petitioner to stop production during the contract period. The respondent-Department took considerable time for the petitioner to complete the work undertaken by him. Inspite of several requests by the petitioner, there was delay on the part of the Department in sending the list of consignees by various State Units and in sending the required forms. There was also diversions of the items from one State to another on the last minute. On account of such lapses on the part of the respondent-Department and also on account of the Department in not discharging the bank guarantee in favour of the petitioner, the petitioner was put to heavy loss under various heads. The disputes thus arose between the petitioner and the respondent-Department relating to the contract for supply of 26 Nos. of 60 mts. SS towers, which were in fact supplied, though with some delay, to the respondent.
3. Regarding the second contract for the supply of 22 Nos. of 80 mts. SS towers, the respondent-Department issued purchase order on 25-11-1994, thereby placing firm order on the petitioner-Company for the supply of 22 Nos. of 80 mts. SS towers, for a value of Rs. 1,99,76,572/- within a period of six months from the date of the purchase order. But on account of the delay, on the part of the respondent-Department involved at every stage, namely, supply of drawings, according approval, inspecting the towers, etc., the petitioner had to seek extension of time for delivering the towers as agreed upon. Having noticed some defects in the structural stability of the towers the respondent-Department instructed the petitioner-Company to stop production of the towers during the contract period. The Department took considerable time to examine the entire designs and drawings, and finally issued new designs and drawings, by which the entire structure was changed, by virtue of which the requirement of raw-material was increased. The Department gave time of six months for delivering the towers and such time was given without imposing any liquidated damages. Subsequently, the Department issued another letter dated 21-9-1995 reducing the time from six months to three months for delivery. The petitioner thereupon expressed its inability to supply the towers in view of the abovesaid circumstances within the time specified by the respondent-Department. Thereupon, the respondent-Department by its proceedings dated 1-11-1996 cancelled the purchase order with respect to the supply of 22 Nos. of 80 mts. SS towers and invoked the entire bank guarantee for Rs. 17,00,000/- given by the petitioner relating to both the contract works. Disputes thus arose between the petitioner and the respondents relating to the executing of the contract for the supply of 22 Nos. of 80 mts. SS towers also between the parties, and as a result of such disputes, the 22 Nos. of 80 mts. SS towers were not supplied to the respondent.
4. As per Clause 20 of Section 3 of the bid documents, the petitioner requested the 2nd respondent by representation dated 17-1-1997 for referring the disputes for arbitration relating to both the contracts. But inspite of such request and inspite of subsequent reminders dated 3-2-1997 and 24-2-1997, the 2nd respondent failed to appoint an Arbitrator as per Clause 20 of Section 3 of the bid documents. As such the present applications are filed under Section 11(5) of the Arbitration and Conciliation Act, 1996 (for short 'the new Arbitration Act') requesting Hon'ble the Chief Justice of the High Court to appoint an independent Arbitrator for deciding the disputes between the parties. A.A.No. 11 of 1997 relates to the contract for supply of 26 Nos. of 60 mts. SS towers and A.A. No. 12 of 1997 relates to contract for supply of 22 Nos. of 80 mts. SS towers.
5. The respondents who represent Department of Telecommunications filed the counters separately in both the applications admitting the contracts entered into between them and the petitioner, but denying the various allegations made in the applications regarding the claims put forward by the petitioner relating to both the contracts and disputing such claims put forward by the petitioner and further contending that the representation dated 17-1-1997 submitted by the petitioner seeking Arbitration was duly considered and the claims were found to be baseless and untenable having regard to the terms and conditions of purchase order read with general conditions of contract and as such the appointment of an Arbitrator is found to be not necessary. It is further contended in the counters filed in both the applications that the relevant clause of the general conditions of contract annexed to the purchase orders contemplated appointment of an Arbitrator by the Chairman of Telecommunications Department alone and as such the request for appointment of an independent Arbitrator by the Court is improper and is not in accordance with law and that, therefore, the applications may be dismissed.
6. As the point involved for consideration in both the applications is the same, they are heard together and are being disposed of by a common order.
7. The point that arises for consideration is whether there are valid grounds for appointment of an Arbitrator, and if so whether the Court can appoint a person of its choice as such Arbitrator.
8. It is seen from the averments made in both the applications that the petitioner who is the same in both the applications had entered into two separate contracts with the respondents for manufacture of self-supporting towers of 26 Nos. of 60 mts. and 22 Nos. of 80 mts. and furnished bank guarantee for Rs. 17,00,000/- on 18-8-1993 covering both the works and that the respondents also issued advance purchase orders authorising the petitioner to commence the work. The contract relating to the supply of 26 Nos. of 60 mts. SS towers, which is the subject matter in A.A. No. 11 of 1997 is of the value of Rs. 1,38,84,000/- while the contract relating to the supply of 22 Nos. of 80 mts. SS towers, which is the subject matter in A.A. No. 12 of 1997 is of the value of Rs. 1,99,76,572/-. The petitioner has alleged in his applications that on account of some laches and delays on the part of the respondents, he has suffered loss relating to the claims, which are enumerated in both the applications and that the respondents are liable to pay such amounts, which are enumerated in both the applications under various claims. The value of such claims put forward by the petitioner is Rs. 53,95,801/- relating to the contract for supply of 26 Nos. of 60 mts. SS towers and Rs. 45,60,485/- relating to the contract for supply of 22 Nos. of 80 mts. SS towers. The supply of 26 Nos. of 60 mts. SS towers was effected while the supply of 22 Nos of 80 mts SS towers could not be effected, as the contract was cancelled by the respondents. It is clear from such allegations made in the applications that the petitioner is making various claims against the respondents relating to both the works of contract on account of some alleged lapses on the part of the respondents. It is clear from the counters filed in both the applications that the respondents are specifically disputing such claims made by the petitioner and further contending that the claims made by the petitioner are baseless and untenable and cannot be considered. It is, therefore, clear from such circumstances that disputes have arisen between the petitioner and the respondents relating to the execution and performance of the work entrusted to the petitioner under both the contracts. Clause 15 of the terms and conditions of the purchase order entered into between the parties relating to the supply of 26 Nos. of 60 mts. SS towers, which is the subject matter in A.A. No. 11 of 1997 and Clause 20 of the terms and conditions of the purchase order entered into between the parties relating to the supply of 22 Nos. of 80 mts. SS towers which is the subject matter in A.A. No. 12 of 1997 relate to Arbitration. It is mentioned in the said clauses relating to Arbitration, that in the event of any dispute or difference arising under the agreement or in connection therewith (except as to matters, the decisions to which is specifically provided under the agreement), the same shall be referred to the Sole Arbitration of the Director General, Department of Telecommunications and that the Award of the Arbitrator shall be final and binding on both the parties to the agreement. This is admitted by both the parties. The contention of the learned Counsel for the respondents however is, as seen from the counters, that the claims made by the petitioner relating to the performance and execution of work under both the contracts are baseless and untenable and as such the Arbitrator cannot be appointed for deciding disputes relating to such alleged claims. On the other hand, the contention of the Counsel for the petitioner is that whether a claim made by the petitioner is untenable or baseless cannot be decided by the Court at the time of appointment of an Arbitrator and that such contentions can be put forward only before the Arbitrator after his appointment and that the Arbitrator alone has to decide during the course of his enquiry as to whether a particular claim made by the petitioner is ill-founded or can be accepted. Such contention of the learned Counsel for the petitioner has to be accepted. The only point that will have to be decided in the applications filed for arbitration is whether there are any valid grounds for appointment of an Arbitrator and not whether a particular claim made by the petitioner against the respondents is genuine and valid or whether it is baseless or untenable. Such considerations regarding the truth and validity of the claims made by the petitioner relating to which the disputes have arisen will have to be decided only by the Arbitrator after he is appointed. In the decision of this Court reported in Y. Parthasarathy Firm v. General Manager, Railway Electrification, Allahabad , it was observed that what is the nature of the claims put forward by the petitioner and whether such claims are covered by the exclusion clauses in the contract are matters for consideration and decision by the Arbitrator and the Court cannot embark upon an enquiry into those aspects at the time of appointment of an Arbitrator. Therefore, the first objection of the respondents that appointment of an arbitrator cannot be made is quite untenable and misconceived and cannot be accepted.
9. It is the specific contention of the petitioner that he addressed the letter dated 17-1-1997 (copy of which is enclosed to both the applications) to the Director General, Department of Telecommunications, who is said to have been now designated as Chairman of Telecommunications Department informing him about the loss suffered by him in connection with the execution of the work under the contracts on account of lapses on the part of the respondents and the various claims made by him relating to such loss and requested him to settle such claims and that in case the Department of Telecommunications is not inclined for any reason to settle such disputes in full as requested by him, the Department may refer such disputes for arbitration in accordance with the clause contained in the terms and conditions of the purchase order, that inspite of service of such notice upon the Director General of Telecommunications he did not choose to appoint any such Arbitrator as contemplated under the relevant arbitration clause of the agreement and that, therefore, he is entitled to seek appointment of an independent Arbitrator by approaching the Chief Justice of the High Court under Section 11(5) of the new Arbitration Act. It is seen from the abovesaid letter dated 17-1-1997, which was admittedly served on the Director General of Telecommunications, who is the Head of the Telecommunications. Department, that the petitioner has put forward all his claims in detail and the loss said to have been suffered by him and demanded him to settle such claims and, in case, the Department is not willing to consider such claims, the disputes may be referred to arbitration as per the relevant clause in the terms and conditions of the purchase order. The Director General of Telecommunications, to whom such letters were addressed in both the cases admittedly did not issue any reply to the petitioner. The petitioner, therefore, issued reminders on 4-2-1997 and 24-2-1997, reiterating his request for settlement of the claims and for referring the disputes to the Arbitrator as contemplated in the relevant clause of the agreement, in case his claims were not accepted by the Department. Those reminders dated 4-2-1997 and 24-2-1997 were also admittedly received by the Director General of Telecommunications, to whom they were addressed. Inspite of such repeated reminders and requests made by the petitioner, the Director General of Telecommunications, who is the Head of the Department, did not make any efforts to refer the disputes to the Arbitrator as per the relevant clause of the terms and conditions of the agreement. As already stated above, Clause 15 of the terms and conditions of the purchase order concerning A.A. No. 11 of 1997 and Clause 20 of the terms and conditions of the purchase order concerning A.A. No. 12 of 1997 relate of the arbitration and it is specifically mentioned in the said clauses that in case any dispute or difference arises under the agreement between the parties, the same shall be referred to the named arbitrator, who is the Director General of the Department of Telecommunications. Inspite of such letter addressed on 17-1-1997 and two subsequent reminders issued by the petitioner requesting the Head of the Telecommunications Department, to refer the disputes to the Arbitrator as contemplated in the relevant clause in the terms and conditions of the purchase order, the respondent-Department did not move in the matter and did not take any steps for referring such disputes to the Arbitrator as contemplated in the said clause relating to arbitration. When there is an agreement between the parties naming a particular person as an Arbitrator and when the respondents failed to refer such disputes to such Arbitrator inspite of several requests made by the petitioner, the petitioner is entitled to move the Chief Justice of the High Court seeking appointment of an Arbitrator under Section 11(5) of the New Arbitration Act of 1996, which alone admittedly governs the present case.
10. Section 11 of the New Act deals with the case of appointment of Arbitrators. Sections 11(2) and (5) of the New Arbitration Act, which are relevant for our purpose, are as follows :
"11(2). Subject to sub-section (6), the parties are free to agree on the procedure for appointing the Arbitrator or Arbitrators.
xxx xxx xxx (5) Failing any agreement referred to in sub-section (2), in an arbitration with a sole Arbitrator, if the parties fail to agree on the Arbitrator within thirty days from receipt of a request by one party from the other party to so agree the appointment shall be made, upon request of a party, by the Chief Justice or any person or Institution designated by him."
Section 14(1)(a) of the Act provides that the mandate of an Arbitrator shall terminate if he becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay. In the present case, as already stated above, the Director General of Telecommunications who is the Head of the respondent-Department and who is also the named Arbitrator as per the arbitration clause and to whom the notice dated 17-1-1997 as well as the reminders dated 4-2-1997 and 24-2-1997 were issued by the applicant requesting him to refer the matter to the named Arbitrator, did not make any efforts to refer the disputes to the Arbitrator as per the arbitration clause in the agreement. Under those circumstances, the applicant waited till 28-4-1997 expecting some action on the part of the respondents to refer the matter to the Arbitrator, who is no other than the Director General of Telecommunications as per the arbitration, clause, and as there was no response from the respondents inspite of such lapse of time for more than three months, the applicant filed both the present applications on 28-4-1997 requesting the Chief Justice of the High Court for appointment of an Arbitrator. Under those circumstances, it can clearly be said that the mandate of the named Arbitrator shall be deemed to have been terminated as he failed to act without undue delay as contemplated under Section 14(1)(a) of the New Arbitration Act. Section 15(2) of the Act provides that where the mandate of an Arbitrator terminates, a substitute Arbitrator shall be appointed according to the Rules that were applicable to the appointment of the arbitrator being replaced. Such rules which are applicable to the appointment of the Arbitrator being replaced, are contained in Section 11(5) of the Act, which is already extracted above. Therefore, the present applications filed by the petitioner requesting the Chief Justice of the High Court for appointment of an arbitrator are maintainable and an Arbitrator has to be appointed to decide the disputed claims.
11. The next contention of the learned Counsel for the respondents, as seen from the averments in the counter and also as put forward during the course of arguments, is that even if the petitioner is entitled to seek appointment of an Arbitrator by filing an application in the High Court, the High Court has to appoint the Director General of Telecommunications Department alone as such Arbitrator, as he was named in the relevant arbitration clause as an Arbitrator to decide the disputes that may arise between the parties and that an independent Arbitrator of the choice of the High Court cannot, therefore, be appointed as requested by the petitioner. But this contention has also no substance in view of the facts and circumstances of the case and on account of the views expressed by the Supreme Court and various High Court, in that regard.
12. In the decision of the Supreme Court reported in P.G. Agencies v. Union of India , where also there was a named Arbitrator by designation, as in the present case, it is observed by their Lordships that if the agreement is silent as regards supplying the vacancy, the law presumes that the parties intend to supply the vacancy and that to take the case out of Section 8(1)(b), what is required is not the intention of the parties to supply the vacancy, but their intention not to supply the vacancy. As already stated above, in that case also, the Arbitrator was named by designation. Their Lordships observed that such fact of the Arbitrator having been, named in the arbitration clause did not afford any indication that the parties to the agreement intended not to supply the vacancy if the named Arbitrator refused to act or was incapable of acting. The abovesaid decision was relied upon in another subsequent decision of the Supreme Court reported in Union of India v. Raghunath Singh & Co. , wherein also it was observed by their Lordships that when there was a named Arbitrator, even though he was named by office, it was open to the Court to supply the vacancy in this place under Section 8(1)(b) of the Old Arbitration Act. In the decision of the Allahabad High Court reported in State v. Sardul Singh Kulwart Singh , following the above cited decision of the Supreme Court reported in P.G. Agencies v. Union of India, (supra), it was observed that if the agreement is silent as regards supplying the vacancy, the law presumes that the parties intended to supply the vacancy. In the present case also the named Arbitrator in the arbitration clause, who is no other than the Director General of Telecommunications and to whom the notice dated 17-1-1997 as well as the reminders dated 4-2-1997 and 24-2-1997 were issued by the applicant, did not respond to the request of the applicant for arbitration of the disputes that have arisen and on account of such failure on the part of the Arbitrator to take up the arbitration, the applicant has approached the Chief Justice of the High Court seeking appointment of an Arbitrator and such applications are maintainable inspite of the fact that there was a named Arbitrator in the arbitration clause.
13. In the decision of the Supreme Court reported in Nandyal Co-op. Spinning Mills Ltd. v. K. V. Mohan Rao , the contractor requested the Administrative Head of the Department of appoint an Arbitrator within 15 days from the date of his request as per the arbitration clause, and as such request was not considered, he renewed his request by another letter seeking appointment of an Arbitrator. As there was no response from the Department, he filed petition before the Subordinate Judge, Nandyal seeking appointment of an Arbitrator under the Old Arbitration, Act, 1940. The learned Subordinate Judge appointed an independent Arbitrator by allowing the petition. When the matter came up before the Supreme Court, it was sought to be contended on behalf of the Department that an independent Arbitrator cannot be appointed by the Court in view of the terms of the arbitration clause as per which an officer of a particular designation alone was to be appointed as an Arbitrator and that even the Court has to appoint only such person as an Arbitrator. Their Lordships of the Supreme Court rejected such contention of the Department and upheld the orders of the Trial Court appointing that as the Arbitrator was not appointed by the Administrative Head of the Department in terms of the contract within 15 days from the date of receipt of the notice, he had abdicated himself of the power to appoint Arbitrator under the contract and that the Court gets jurisdiction to appoint an Arbitrator in place of the contract and that rejecting such request of the applicant for appointment of an Arbitrator by the Court under such circumstances amounts to putting premium on inaction depriving the applicant of the remedy of arbitration frustrating the contract itself.
14. In another decision of the Supreme Court reported in G. Rama Chandra Reddy & Co. v. Chief Engineer, M.E.S. Madras Zone , a similar point arose for consideration and it was observed by their Lordships :
"Thus when the notice was given to the opposite contracting party to appoint an Arbitrator in terms of the contract and if no action had been taken, it must be deemed that he neglected to act upon the contract when no agreement was reached, even in the Court between the parties, the Court gets jurisdiction and power to appoint an Arbitrator, Even if Section 8(a) per se, does not apply, notice was an intimation to the opposite contracting party to act upon the terms of the contract and its non-availments entails the forfeiture of the power to appoint an Arbitrator in terms of the contract and gives right to the other party to invoke the Court's jurisdiction under Section 20. In the instant case the respondent did not appoint an Arbitrator, after the notice was received. The respondent averred in the written statement that it was under consideration. Even before the learned Single Judge he did not even state that he was willing to appoint an Arbitrator. The learned Single Judge rightly exercised the power under Section 20(4) of the Act and appointed the arbitrator."
In the said decision, their Lordships referred to an earlier decision of the Supreme Court reported in Union of India v. Prafulla Kumar Sangai . And distinguished the said case on facts and observed that the observations made by the Supreme Court in the decision referred to 7 supra were in view of the particular facts of that case and in view of the agreed course between the parties and such observations made by their Lordships in that decision cannot be made applicable to the case before them.
15. In another decision of the Supreme Court reported in State of West Bengal v. M/s. National Builders , also it was observed by their Lordships :
"Where the agreement provides for appointment of a specific person either by name or by designation and that person refuses to act then the question of appointing him again cannot arise. Refusal by such a person results in the agreement clause ceasing to operate. When two parties agree for appointment of 'A' of 'B' by name or designation and the person so named refuses to act, then the agreement shall be deemed to have exhausted itself. The person so named having refused to act he cannot be asked again to arbitrate. That would be contrary to the very basis of arbitration that no one can be forced to act against his free Will. It would also be contrary to the agreement and if there is no agreement to appoint another person, the only remedy is to approach the Court to exercise its statutory power and appoint another Arbitrator."
16. The same view was expressed by various High Courts also in similar cases. In the decision of the Orissa High Court reported in Union of India v. Prahallad Moharana (AIR 1996 Orissa 19 = 1996 (Suppl.) Arb. LR 267), it was observed by his Lordship, by relying upon the abovesaid decisions of the Supreme Court referred to 5 and 6 supra and also referring to the other decision of the Supreme Court referred to 7 supra as follows :
"In the case before this Court, the defendant-Railway did not respond to the notice though admittedly they received the same. The non-response to the plaintiff's notice for appointing the named Arbitrator in the agreement amounts, as has been held by the Apex Court, to forfeiture of the right to appoint an Arbitrator so named in the agreement. Therefore, I have no hesitation to hold that the Court is competent to appoint an arbitrator of its own choice in a given situation as is found in the present case."
17. In the decisions of the High Court of Punjab and Haryana reported in Banarsi Dass Mittal v. Housing Board, Haryana (1988(1) Arb. LR 170 (P&H)), and Union of India v. M/s. Amarnath Aggarwal Construction Pvt. Ltd. (1988(2) Arb. LR 337 (P&H)), also it is observed by their Lordships that when the party does not exercise its option to appoint the Arbitrator as per the arbitration clause within the specified period after the receipt of the notice, it is for the Court to exercise its jurisdiction to appoint an Arbitrator. It is clear from such circumstances and from the facts of this case that the respondents did not respond to the notice and reminders issued by the petitioner for taking any steps to refer the disputes to the named Arbitrator in the arbitration clause, and such conduct on the part of the respondents, therefore, amounts to forfeiture of their right to appoint an Arbitrator named in the arbitration clause, as opined by the Apex Court in the above cited decisions and that the Court is, therefore, competent to appoint an independent Arbitrator of its own choice in view of the facts and circumstances of the present case.
18. The learned Counsel for the respondents has tried to rely upon the Full Bench decision of this Court reported in Government of A.P. v. N. V. Choudary (1993(2) ALT 391 (F.B.)), and the decision of the Supreme Court referred to 7 supra, which is also referred to above, in support of his contention that the Court has to appoint only the named Arbitrator in the arbitration clause inspite of the fact that the respondent-Department had not chosen to respond to the request of the petitioner for appointment of an Arbitrator before the present applications are filed in this Court. In view of the facts and circumstances of that particular case concerned in the decision of this particular case concerned in the decision of this Court referred to 12 supra, it was observed by their Lordships that while effecting appointment of an Arbitrator, the Court will have to see whether it is desirable or feasible to appoint an Arbitrator in accordance with or as nearly as possible to the intention of the parties. If it is not possible, it is open to the Court to appoint an Arbitrator of its own choice. It is seen from the said Full Bench decision of this Court that their Lordships relied upon the earlier decision of the Supreme Court referred to 7 supra in support of their view. But as already stated above, the decision of the Supreme Court referred to 7 supra was infact considered by the Supreme Court in its latter decisions referred to 5 and 6 supra and explained the circumstances under which the relevant observations were made by the Supreme Court in that case and distinguished the same on facts. The said Full Bench decision of this Court was rendered on 8-10-1993. The decision of the Supreme Court referred to 5 supra was rendered on 5-6-1993 and it was not, however, cited before the Full Bench of this Court. The other decision of the Supreme Court referred to 6 supra was rendered on 29-4-1994 and as such it was not available for the Full Bench of this Court when it delivered the judgment referred to 12 supra. In view of the above cited decisions of the Supreme Court referred to 5 and 6 supra, the contention of the learned Counsel for the respondents that the Court cannot appoint any person other than the one named in the arbitration clause as an arbitrator cannot be accepted. As already stated above inasmuch as the respondents did not respond to the repeated requests of the petitioner to refer the disputes to the named Arbitrator, the respondents shall be deemed to have abdicated their authority and forfeited their right to appoint the Arbitrator as per the arbitration clause and the Court is entitled to appoint an independent Arbitrator of its choice to decide the disputes that have arisen between the parties. Hon'ble the Chief Justice, who has to appoint the Arbitrator under Section 11(5) of the New Act has designated me to hear these applications and pass orders. I have, therefore, heard these applications. There is no consensus between the parties regarding the person to be appointed as an Arbitrator. I have, therefore, come to the conclusion that an independent Arbitrator of my choice shall be appointed in both the applications.
19. In the result, both the applications are allowed without costs. Mr. Justice M. Ranga Reddy, retired Judge of the High Court of A.P., is appointed as Arbitrator in both the cases to decide the disputes that have arisen between the parties. His remuneration is tentatively fixed at Rs. 50,000/- in each case (making a total of Rs. 1,00,000/-), to be initially paid by the applicant.
20. Applications allowed