Full Judgment Text
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P. (T) (COMM.) 41/2024, I.A. 10015/2024
MILLENNIUM CONSTRUCTION PVT. LTD. .....Petitioner
Through: Mr. Pavan Narang, Mr. Abhay
Singh, Ms. Ankita Agarwal, Ms. Aishwarya
Chabra and Mr. Himanshu Sethi, Advs.
versus
FOOTWEAR DESIGN AND DEVELOPMENT
INSTITUTE .....Respondent
Through:
CORAM:
HON'BLE MR. JUSTICE C. HARI SHANKAR
O R D E R (ORAL)
% 22.08.2024
I.A. 10015/2024
1. Exemption allowed subject to all just exceptions.
2. Applications are disposed of.
O.M.P. (T) (COMM.) 41/2024
3. This is a petition under Section 14(2) of the Arbitration and
Conciliation Act, 1996 (“the 1996 Act”) and seeks termination of the
mandate of the arbitrator appointed by the respondent by way of a
communication dated 28 February 2024.
4. The arbitration clause governing the contract between the
parties read thus:
Signature Not Verified
Signature Not Verified
Digitally Signed
By:AJIT KUMAR
Signing
Date:26.08.2024 22:44
Digitally Signed
By:CHANDRASHEKHAR
AN HARI SHANKAR
Signing Date:26.08.2024
22:43
OMP (T) (COMM.) 41/2024 Page 1 of 4
“69. ARBITRATION :
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 is any way
arising out of or relating to the Contract, designs drawings,
specifications, estimates, instructions, orders or these Conditions or
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 FDDI, FDDI, and if the
General Manager is unable or unwilling to act to the sole
arbitration of some other person appointed by the Managing
Director. FDDI willing to act as such arbitrator. There will be no
objection if the arbitrator so appointed is an employee of FDDI,
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 expressed
views on all or any of the mailers 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
reason as aforesaid at the time of such transfer, vacation 4office or
inability to act. Managing Director, FDDI, shall appoint another
person to act as arbitrator in accordance with the terms of the
Contract. It also a term of this Contract that no person other than a
person appointed by MD, FDDI, 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.
The above shall accept otherwise stipulated apply to Contracts
whose value does not exceed Rs. Fifty lakhs. For Contract value
exceeding Rs. fifty lakhs in the event of any differences/disputes
which cannot he resolved amicably. The aggrieved party as
Claimant shall serve a notice of his/their disagreement/dispute
having arisen on the opposite party (respondent) calling upon the
Latter to nominate his/their nominee as arbitrator within one month
of the date of such notice and that in the event of failure in
nominating arbitrator by the Respondent within 30 days of the
Notice by the Claimant, the arbitrator nominated by the Claimant
shall become the Sole Arbitrator. Where, however, if both the party
nominates one arbitrator each i.e. Contractor nominates one person
to act as arbitrator and FDDI, nominates one arbitrator. As required
under Indian Arbitration Act 1940 both the arbitrators shall appoint
umpire, before entering into the reference of disagreement/disputes
before the two arbitrators enter into the reference.”
Signature Not Verified
Signature Not Verified
Digitally Signed
By:AJIT KUMAR
Signing
Date:26.08.2024 22:44
Digitally Signed
By:CHANDRASHEKHAR
AN HARI SHANKAR
Signing Date:26.08.2024
22:43
OMP (T) (COMM.) 41/2024 Page 2 of 4
5. On 28 February 2024, the respondent addressed a notice to the
petitioner under Section 21 of the 1996 Act, invoking Clause 69 of the
tender conditions. The petitioner is apprehensive on account of
paragraph (xiv) of the said notice which reads thus:
“(xiv) Accordingly, FDDI nominated the below-named person to
be appointed as its nominee to the Arbitration Tribunal to be
constituted in terms of the Agreement. FDDI calls upon PDL to
intimate FDDI the name of its nominee to act as the Arbitrator to
the Tribunal within 30 days, failing which the nominee appointed
by FDDI shall proceed with the Arbitration by acting as the Sole
Arbitrator.”
6. The petitioner responded to the aforesaid notice, contesting the
prayer for reference of the dispute for arbitration.
7. Ordinarily, in such an eventuality, one or the other party would
have to approach the Court under Section 11(6) of the 1996 Act, for
an arbitrator to be appointed.
8. Neither of the parties has approached under Section 11(6). Mr.
Pavan Narang, learned Counsel for the petitioner submits that the
petitioner is apprehensive on account of the concluding observation in
paragraph (xiv) of the notice dated 28 February 2024, which states
that, in the event of the petitioner not having intimated the name of its
own nominee to act as the arbitrator, the nominee appointed by the
respondent would proceed with the arbitration.
9. Mr. Narang submits that the petitioner, therefore, apprehends
that the arbitration may continue unilaterally.
Signature Not Verified
Signature Not Verified
Digitally Signed
By:AJIT KUMAR
Signing
Date:26.08.2024 22:44
Digitally Signed
By:CHANDRASHEKHAR
AN HARI SHANKAR
Signing Date:26.08.2024
22:43
OMP (T) (COMM.) 41/2024 Page 3 of 4
10. According to me, this apprehension is premature at this stage.
The respondent, in its notice dated 28 February 2024, has merely
named an arbitrator and called upon the petitioner to suggest any
alternative name if he so chooses. The petitioner has not done so. No
arbitrator named in the communication dated 28 February 2024 has
entered on reference as yet.
11. There is no reason for the court to expect that the arbitrator
would enter on reference following a unilateral appointment.
12. In case such an eventuality arises, however, the petitioner
would be at liberty to approach this Court.
13. With the above observation, this petition is disposed of.
C.HARI SHANKAR, J
AUGUST 22, 2024 /aky
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Signature Not Verified
Signature Not Verified
Digitally Signed
By:AJIT KUMAR
Signing
Date:26.08.2024 22:44
Digitally Signed
By:CHANDRASHEKHAR
AN HARI SHANKAR
Signing Date:26.08.2024
22:43
OMP (T) (COMM.) 41/2024 Page 4 of 4