Full Judgment Text
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
th
Date of decision: 9 February, 2018
+ O.M.P. (T)(COMM ) 87/2017
ANIL MEHTA ..... Petitioner
Through: Mr.Avinash Trivedi, Adv.
versus
GENERAL MANAGER, NORTHERN RAILWAY ..... Respondent
Through: Mr.Himanshu Upadhyay, Adv.
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
NAVIN CHAWLA, J. (Oral)
1. This petition under Section 15(2) of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as the Act) has been
filed by the petitioner seeking termination of the mandate of Arbitral
Tribunal constituted on 19.09.2014 and to appoint a substitute
Arbitral Tribunal to adjudicate the disputes that have arisen between
the parties in relation to the work of “Misc work between Samrala to
Sanehwal stations in connection with Chandigarh Ludhiana new B.G.
Rail Link Project” awarded by the respondent in favour of the
petitioner vide Acceptance Letter dated 29-08-2011 and a formal
contract agreement No.84W/Dy.CE/Const-II/CDG dated 11-11-2011.
2. The counsel for the petitioner submits that disputes have arisen
between the parties in relation to the above work, on the request of the
OMP (T)(COMM) 87/2017 Page 1 of 5
petitioner, the respondent appointed Arbitral Tribunal on 19.09.2014
in accordance with Clause 64 of the General Condition of Contract
between the parties. He submits that though more than 3 years have
passed, the arbitration proceedings are still at the stage of pleadings.
He further submits that in this entire period of more than three years,
there has not been a single sitting of the Arbitral Tribunal where all
three members of the Arbitral Tribunal have been present. He further
draws my reference to the letter dated 24.06.2016 addressed by the
respondent to the Arbitral Tribunal for expediting the adjudication of
the disputes. He submits that in spite of this request, only one sitting
of the Arbitral Tribunal took place on 06.02.2017, where again it was
only the Presiding Arbitrator who was present and the other two
arbitrators had remained absent. He submits that thereafter, there has
been no further sitting of the Arbitral Tribunal.
3. Learned counsel for the respondent does not dispute the above
facts. He however, submits that the respondent has taken note of the
concerned of the petitioner and it would ensure that a fresh Arbitral
Tribunal is constituted within a period of two days from today.
4. Notice on this petition was issued to the respondent on
03.11.2017. Three months have passed since that date and admittedly
respondents have not yet acted on the plight of the petitioner.
5. Supreme Court in Union of India vs. Singh Builders Syndicate
(2009) 4 SCC 523 , in almost similar circumstances, had upheld the
order of the High Court appointing a Sole Arbitrator instead of three
member Arbitral Tribunal comprising of the serving officers of the
respondents in accordance with Clause 64 of the General Condition of
OMP (T)(COMM) 87/2017 Page 2 of 5
Contract Act. The Supreme Court had held as under:-
“14) It was further held in Northern Railway case that the
Chief Justice or his designate should first ensure that the
remedies provided under arbitration agreement are
exhausted, but at the same time also ensure that twin
requirements of sub-section (8) of Section 11 of the Act are
kept in view. This would mean that invariably the Court
should first appoint the arbitrators in the manner provided
for in the arbitration agreement. But where the
independence and impartiality of the arbitrator(s)
appointed/nominated in terms of the arbitration agreement
is in doubt, or where the Arbitral Tribunal appointed in the
manner provided in the arbitration agreement has not
functioned and it becomes necessary to make fresh
appointment, the Chief Justice or his designate is not
powerless to make appropriate alternative arrangements to
give effect to the provision for arbitration.
15) The object of the alternative dispute resolution
process of arbitration is to have expeditious and effective
disposal of the disputes through a private forum of the
parties choice. If the Arbitral Tribunal consists of serving
officers of one of the parties to the dispute, as members in
terms of the arbitration agreement, and such tribunal is
made non-functional on account of the action or inaction or
delay of such party, either by frequent transfers of such
members of the Arbitral Tribunal or by failing to take steps
expeditiously to replace the arbitrators in terms of the
arbitration agreement, the Chief Justice or his designate,
required to exercise power under Section 11 of the Act, can
step in and pass appropriate orders.”
6. The Supreme Court in the said judgment had also observed that
effort should be made by the respondent to ensure that officers, who
are likely to remain in a particular place are alone appointed as
Arbitrators and that the Arbitral Tribunal consisting of service
OMP (T)(COMM) 87/2017 Page 3 of 5
officers, decides the matter expeditiously. The Supreme Court had
directed that the constitution of Arbitral Tribunal with serving officers
from different faraway places should be avoided.
7. As noted by the Supreme Court in the above judgment, the
object of the alternate dispute resolution process of Arbitration is to
have expeditious and effective disposal of the disputes. Arbitration
cannot be allowed to be dragged in the manner as has been done in
the present case. As noted above for more than three years, the parties
are still at the stage of completion of pleadings. In spite of repeated
requests of the petitioner, the respondent could only make a request to
the Arbitral Tribunal to expedite the proceedings but thereafter took
no effective steps to ensure compliance with the said request. Today
again an assurance has been given to the court that a fresh Arbitral
Tribunal will be constituted by the respondent, however, there is no
guarantee that this Arbitral Tribunal would act with expedition.
7. In view of the above, I see no impediment in terminating the
mandate of Arbitral Tribunal so constituted by the respondent vide its
notice dated 19.09.2014 and appointing a substitute sole Arbitrator in
its place.
8. I appoint Mr.Sanjivan Kumar Sarvaria, Retired District &
Sessions Judge, 5, Court Road, Delhi-110054, Mobile-9910384642,
E-mail: sksarvaria@gmail.com as a Sole Arbitrator to adjudicate the
disputes that have arisen between the parties in relation to the above
work.
9. The Arbitration will continue from the stage where it was
before the earlier Arbitral Tribunal. The respondent would ensure that
OMP (T)(COMM) 87/2017 Page 4 of 5
the arbitral record is obtained from the earlier Arbitral Tribunal and
place it before the sole Arbitrator now being appointed by this Court.
10. The Arbitration shall be conducted under the aegis of the Delhi
International Arbitration Centre (DIAC). The arbitration and the fee
shall be governed by the DIAC rules.
11. The petition is allowed in the above terms with no order as to
costs.
NAVIN CHAWLA, J
FEBRUARY 09, 2018
cd
OMP (T)(COMM) 87/2017 Page 5 of 5
* IN THE HIGH COURT OF DELHI AT NEW DELHI
th
Date of decision: 9 February, 2018
+ O.M.P. (T)(COMM ) 87/2017
ANIL MEHTA ..... Petitioner
Through: Mr.Avinash Trivedi, Adv.
versus
GENERAL MANAGER, NORTHERN RAILWAY ..... Respondent
Through: Mr.Himanshu Upadhyay, Adv.
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
NAVIN CHAWLA, J. (Oral)
1. This petition under Section 15(2) of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as the Act) has been
filed by the petitioner seeking termination of the mandate of Arbitral
Tribunal constituted on 19.09.2014 and to appoint a substitute
Arbitral Tribunal to adjudicate the disputes that have arisen between
the parties in relation to the work of “Misc work between Samrala to
Sanehwal stations in connection with Chandigarh Ludhiana new B.G.
Rail Link Project” awarded by the respondent in favour of the
petitioner vide Acceptance Letter dated 29-08-2011 and a formal
contract agreement No.84W/Dy.CE/Const-II/CDG dated 11-11-2011.
2. The counsel for the petitioner submits that disputes have arisen
between the parties in relation to the above work, on the request of the
OMP (T)(COMM) 87/2017 Page 1 of 5
petitioner, the respondent appointed Arbitral Tribunal on 19.09.2014
in accordance with Clause 64 of the General Condition of Contract
between the parties. He submits that though more than 3 years have
passed, the arbitration proceedings are still at the stage of pleadings.
He further submits that in this entire period of more than three years,
there has not been a single sitting of the Arbitral Tribunal where all
three members of the Arbitral Tribunal have been present. He further
draws my reference to the letter dated 24.06.2016 addressed by the
respondent to the Arbitral Tribunal for expediting the adjudication of
the disputes. He submits that in spite of this request, only one sitting
of the Arbitral Tribunal took place on 06.02.2017, where again it was
only the Presiding Arbitrator who was present and the other two
arbitrators had remained absent. He submits that thereafter, there has
been no further sitting of the Arbitral Tribunal.
3. Learned counsel for the respondent does not dispute the above
facts. He however, submits that the respondent has taken note of the
concerned of the petitioner and it would ensure that a fresh Arbitral
Tribunal is constituted within a period of two days from today.
4. Notice on this petition was issued to the respondent on
03.11.2017. Three months have passed since that date and admittedly
respondents have not yet acted on the plight of the petitioner.
5. Supreme Court in Union of India vs. Singh Builders Syndicate
(2009) 4 SCC 523 , in almost similar circumstances, had upheld the
order of the High Court appointing a Sole Arbitrator instead of three
member Arbitral Tribunal comprising of the serving officers of the
respondents in accordance with Clause 64 of the General Condition of
OMP (T)(COMM) 87/2017 Page 2 of 5
Contract Act. The Supreme Court had held as under:-
“14) It was further held in Northern Railway case that the
Chief Justice or his designate should first ensure that the
remedies provided under arbitration agreement are
exhausted, but at the same time also ensure that twin
requirements of sub-section (8) of Section 11 of the Act are
kept in view. This would mean that invariably the Court
should first appoint the arbitrators in the manner provided
for in the arbitration agreement. But where the
independence and impartiality of the arbitrator(s)
appointed/nominated in terms of the arbitration agreement
is in doubt, or where the Arbitral Tribunal appointed in the
manner provided in the arbitration agreement has not
functioned and it becomes necessary to make fresh
appointment, the Chief Justice or his designate is not
powerless to make appropriate alternative arrangements to
give effect to the provision for arbitration.
15) The object of the alternative dispute resolution
process of arbitration is to have expeditious and effective
disposal of the disputes through a private forum of the
parties choice. If the Arbitral Tribunal consists of serving
officers of one of the parties to the dispute, as members in
terms of the arbitration agreement, and such tribunal is
made non-functional on account of the action or inaction or
delay of such party, either by frequent transfers of such
members of the Arbitral Tribunal or by failing to take steps
expeditiously to replace the arbitrators in terms of the
arbitration agreement, the Chief Justice or his designate,
required to exercise power under Section 11 of the Act, can
step in and pass appropriate orders.”
6. The Supreme Court in the said judgment had also observed that
effort should be made by the respondent to ensure that officers, who
are likely to remain in a particular place are alone appointed as
Arbitrators and that the Arbitral Tribunal consisting of service
OMP (T)(COMM) 87/2017 Page 3 of 5
officers, decides the matter expeditiously. The Supreme Court had
directed that the constitution of Arbitral Tribunal with serving officers
from different faraway places should be avoided.
7. As noted by the Supreme Court in the above judgment, the
object of the alternate dispute resolution process of Arbitration is to
have expeditious and effective disposal of the disputes. Arbitration
cannot be allowed to be dragged in the manner as has been done in
the present case. As noted above for more than three years, the parties
are still at the stage of completion of pleadings. In spite of repeated
requests of the petitioner, the respondent could only make a request to
the Arbitral Tribunal to expedite the proceedings but thereafter took
no effective steps to ensure compliance with the said request. Today
again an assurance has been given to the court that a fresh Arbitral
Tribunal will be constituted by the respondent, however, there is no
guarantee that this Arbitral Tribunal would act with expedition.
7. In view of the above, I see no impediment in terminating the
mandate of Arbitral Tribunal so constituted by the respondent vide its
notice dated 19.09.2014 and appointing a substitute sole Arbitrator in
its place.
8. I appoint Mr.Sanjivan Kumar Sarvaria, Retired District &
Sessions Judge, 5, Court Road, Delhi-110054, Mobile-9910384642,
E-mail: sksarvaria@gmail.com as a Sole Arbitrator to adjudicate the
disputes that have arisen between the parties in relation to the above
work.
9. The Arbitration will continue from the stage where it was
before the earlier Arbitral Tribunal. The respondent would ensure that
OMP (T)(COMM) 87/2017 Page 4 of 5
the arbitral record is obtained from the earlier Arbitral Tribunal and
place it before the sole Arbitrator now being appointed by this Court.
10. The Arbitration shall be conducted under the aegis of the Delhi
International Arbitration Centre (DIAC). The arbitration and the fee
shall be governed by the DIAC rules.
11. The petition is allowed in the above terms with no order as to
costs.
NAVIN CHAWLA, J
FEBRUARY 09, 2018
cd
OMP (T)(COMM) 87/2017 Page 5 of 5