Dsc Ventures Pvt Ltd. vs Ministry Of Road Transport And ... on 29 June, 2020
Section 15 (2), therefore, applied, and required a substitute arbitrator
to be appointed "according to the rules that were applicable to the
appointment of the arbitrator being replaced", i.e. to the appointment
ARB.P. 203/2020 Page 10 of 38
of Mr. S.C. Sharma. The reference to "rules", in Section 15 (2) was
intended to make the arbitral procedure, stipulated in the agreement
between the parties (the Concession Agreement), applicable, mutatis
mutandis, to the appointment of the substitute arbitrator. The words
"shall be substituted by another arbitrator", as employed in Section 14
(1) indicate, unequivocally, that substitution, of the arbitrator who has
become unable to perform his functions, by a substitute arbitrator, has
to follow, immediately on the fact of the inability of the arbitrator
becoming known to the party. Clause 19.2 (a) of the Concession
Agreement made the provisions of the 1996 Act applicable to the
appointment of arbitrators, thereunder. When, therefore, the
respondent was made aware, by the order dated 2nd March, 2020, of
the two learned surviving arbitrators, of the demise of Mr. S.C.
Sharma, and was directed to appoint a substitute arbitrator, it was
required to do so immediately and, in any case, with all due
promptitude. Section 11 (6) would directly apply, in such a case, as it
stipulates that, where, under the appointment procedure, for
arbitrators, or agreed upon between the parties, a party fails to act as
required under such procedure, the appointment of the substitute
arbitrator would be made by this Court. Though no time period,
within which the arbitrator is required to be appointed, finds place in
Section 11 (6), the law declared by the Supreme Court in Datar
Switchgears Ltd v. Tata Finance Ltd1, Punj Lloyd Ltd v. Petronet
MHB Ltd2, U.O.I. v. Bharat Battery Manufacturing Co. (P) Ltd3 and
by this Court in Zion Promoters & Developers Pvt Ltd v. Ferrous
1 (2000) 8 SCC 151
2 (2006) 2 SCC 638
3 (2007) 7 SCC 684
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Infrastructure Pvt Ltd4 made it clear that the party, who was required
to appoint the substitute arbitrator, had to do so within thirty days
from the date on which it was made aware of the necessity of doing so
and, in any case, had to do so before the other party approached this
Court, under Section 11 (6), for appointment of the substitute
arbitrator. Once the opposite party approached this Court, Mr. Sibal
would seek to submit that the right, of the party, the mandate of whose
arbitrator has expired, to appoint a substitute arbitrator, stood
extinguished.