Full Judgment Text
$~A-38
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 30.01.2020
+ ARB.P. 75/2020 and IA 1322/2020
BIRLA CABLE LIMITED ..... Petitioner
Through: Mr. Narendera M. Sharma, Mr. Abhishek
Sharma and Mr. Aditya Singh, Advocates
versus
BHARAT SANCHAR NIGAM LIMITED ..... Respondent
Through: Mr. Dinesh Agnani, Sr. Advocate with
Ms. Leena Tuteja, Advocate
CORAM:
HON'BLE MS. JUSTICE JYOTI SINGH
JYOTI SINGH, J. (ORAL)
1. This is a petition under Section 11(6) of the Arbitration and
Conciliation Act, 1996 (‘Act’) for appointment of the Sole Arbitrator.
2. Issue notice.
3. Ms. Leena Tuteja, Advocate accepts notice on behalf of the
respondent.
4. Mr. Agnani, learned Senior Counsel appearing for the respondent
submits that a panel of Arbitrator has been prepared by the BSNL and Mr.
R.N. Prabhakar is already nominated as Arbitrator to adjudicate the dispute
between the parties. Learned counsel for the petitioner, however, points out
that in view of the judgment of the Supreme Court in Perkins Eastman
ARB.P. 75/2020 Page 1 of 4
Architects DPC & Anr. vs. HSCC (India) Ltd. 2019 SCC Online SC 1517 ,
respondents have forfeited the right to make a unilateral appointment of an
Arbitrator and the Arbitrator so appointed will be ineligible having been
appointed by the respondent. In my view, the contention of the learned
counsel for the petitioner is right. In Perkin s (supra) , the Supreme Court
has held as under :-
“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 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. Paragraph 50 of the decision shows that this
ARB.P. 75/2020 Page 2 of 4
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. 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”
5. Therefore, the Arbitrator although appointed from a Panel but having
been appointed by the respondent unilaterally cannot be eligible to
adjudicate the disputes between the parties.
6. At this stage, Mr. Agnani, learned senior counsel has handed over a
copy of the panel prepared in which one of the Arbitrators is a former Judge
of this Court. A copy of the same has been handed over to the counsel for
the petitioner who, after perusal of the panel, on instructions, submits that he
ARB.P. 75/2020 Page 3 of 4
has no objection to the appointment of Justice Gian Prakash Mittal, former
Judge of this court as the Sole Arbitrator.
7. With the consent of the parties, Justice Gian Prakash Mittal is
appointed as the Sole Arbitrator. Since the appointment is with consent of
the petitioner, the learned Arbitrator will not suffer any disability on account
of the law laid down by Supreme Court in Perkins (supra) .
8. The address and mobile number of the learned Arbitrator is as under:
Hon’ble Mr. Justice Gian Prakash Mittal (Retd.)
H-37, Green Park Extension,
New Delhi.
Mobile: 9910386419, 8700726242
9. The learned Arbitrator shall give disclosure under Section 12 of the
Act before entering upon reference.
10. Fee of the Arbitrator shall be fixed as per Fourth Schedule of the Act.
11. The petition and the application filed herewith are allowed in the
aforesaid terms.
JYOTI SINGH, J
JANUARY 30, 2020
yg /
ARB.P. 75/2020 Page 4 of 4