Document Fragment View

Matching Fragments

2. The petition is under Sections 14 and 15 of the Arbitration and Conciliation Act, 1996. The facts are not in dispute, hence no affidavit has been called for; but the implication of the facts in the context of the law applicable thereto has been much debated upon.

3. The respondent invited tenders in October, 2006 for work relating to the construction of bridges and laying of railway tracks. The tender notice was published by the respondent as the management and executive agent of NTPC Limited. Upon the petitioner being awarded the contract of value in excess of Rs. 31 crore, the petitioner claims to have undertaken the work thereunder. Disputes arose between the parties by the middle of 2009 and the petitioner invoked the arbitration clause contained in the special conditions governing the contract by a notice of June 18, 2009. An arbitrator was appointed by the Chairman and Managing Director of NTPC Limited, as the mechanism for the constitution of the arbitral tribunal provided thus; but the petitioner was unhappy with the choice of the personnel of the arbitrator and protested the same before the arbitrator. Nothing much came of the reference: the petitioner says that its application challenging the choice of the arbitrator was not taken up in right earnest by the arbitrator; and, the respondent contends that since bias was alleged the arbitrator did not proceed with the reference. However, such aspect of the matter is not relevant for the present purpose and has been referred to only for the purpose of the completeness of the narrative.

5. Upon the officer who had been appointed as arbitrator being transferred, another senior official of NTPC Limited was nominated to take up the reference on November 22, 2011. A statement of claim was submitted before such arbitrator in September, 2012 and the respondent's counter- claim was filed by January, 2013 with a rejoinder thereto being tendered by the petitioner by February, 2013 and the reply to the rejoinder being taken on record in March, 2013. The last meeting held before such arbitrator was on June 29, 2013 which sitting appears to have been preliminary in nature. The last paragraph of the minutes promised that the date of the next hearing would be communicated by the arbitrator.

7. The arbitration clause governing the parties in the present case is as follows:

"33. ARBITRATION 33.1 Except where otherwise provided for in the contract all questions and disputes relating to the meaning of the specifications, designs, drawings and instructions herein before mentioned and as to the quality of workmanship or materials used on the work or as to any other question, claim, right, matter or thing whatsoever in any way arising out of or relating to the contract, designs drawings specifications, estimates, instructions, orders or these conditions of otherwise concerning the works, or the execution or failure to execute the same whether arising during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of the General Manager of NTPC (BARH, STPP) and if the General Manager/NTPC (Barh, STPP) is unable or unwilling to act, some other person appointed by the Chairman and Managing Director, NTPC Ltd., and that he had to deal with the matters to which the Contract relates and that in the course of his duties as such he had expresses views on all or any of the matter in dispute or difference. The Arbitrator to whom the matter is originally referred being transferred or vacating his office or being unable to act for any reasons as aforesaid at the time of such transfer, vacation of office or inability to act, Chairman and Managing Director NTPC Ltd. shall appoint another person to act as Arbitrator in accordance with the terms of the Contract. It is also a term of this Contract that no person other than a person appointed by Chairman and Managing Director, NTPC Ltd. shall appoint another person to act as arbitrator in accordance with the terms of the contract. It is also a term of this Contract that no person other than a person appointed by Chairman and Managing Director, NTPC Ltd. as aforesaid should act as arbitrator and if for any reason that is not possible, the matter is not to be referred to arbitration at all.
Subject as aforesaid the provision of the India Arbitration Act, 1996, the rules framed thereunder and any statutory modification thereof shall apply to the arbitration proceeding under this clause."

8. The petitioner refers to a judgment reported at (2009) 8 SCC 520 (Indian Oil Corporation Limited v. Raja Transport Private Limited) where it was held that notwithstanding the procedure for the appointment of an arbitral tribunal being provided for in an arbitration agreement, when a Chief Justice or his designate is in seisin of a request under Section 11 of the said Act, a departure may be made in certain circumstances from the procedure recognised by the arbitration agreement. Just as in the present matter where the arbitration agreement provides that "no person other than a person appointed by the Chairman and Managing Director, NTPC Ltd. shall appoint another person to act as arbitrator in accordance with the terms of the contract", there was a similar prohibition contained in the arbitration agreement in the matter before the Supreme Court. Paragraph 46 of the report enunciates the principle: