2007 Supreme(SC) 1096

2007(6) Supreme 363
Supreme Court of india
(From Delhi High Court)
C.K. THAKKER, J.
You One Maharia JV Thr. You One Eng. & Cosntruction Co. Ltd. & Anr. — Petitioners
versus
National Highways Authority of India — Respondent
Arbitration Petition 12 of 2007
Decided on : 21-08-2007

important point
When identical mater between the same parties stands concluded by a decision of the Supreme Court, parties should act accordingly.

Headnote:Arbitration and Conciliation Act, 1996 – Section 1(6) – Dispute regarding appointment of presiding arbitrator-Arbitration clause clearly stating the manner in which the Arbitral Tribunal was to be constituted – Moreover matter already stood concluded by Supreme Court in (2006) 4 SCC 372 – Parties directed to act accordingly. (Para 16)

       (2006) 4 SCC 372 – Relied upon.

       Facts of the case :

       The petitioners are a ‘Joint Venture’ who came together by virtue of Joint Venture Agreement dated May 10, 2001 for execution of certain contracts for National Highways Authority of India (NHAI). Petitioner No.1 is a Company registered under the Laws of the Republic of Korea having its registered office at 75-95, Seosomoon Dong, Chung Ku, Seoul, Korea 100 110. Originally it was known as YOU ONE Engineering and Construction Co. Ltd. at the time of Joint Venture Agreement and also at the time of contract dated May 31, 2001 with NHAI. The Company has since merged with and known as Ultra Construction and Engineering Co. Ltd., Seoul, Korea; i.e. in a country other than India within the meaning of Section 2(f)(ii) of the Act. Petitioner No.2 is a Private Limited Company incorporated and registered under the Companies Act, 1956 having its registered office at A-10, Panchvati, Azadpur, Delhi-110 033.

       According to the petitioners, they entered into an Agreement on May 31, 2001 with the respondent for execution of Contract Package No. NS-23/AP being a project for 4-Laning of KM. 464.000 to KM. 474.000 of Nagpur-Hyderabad section and KM. 9.400 and KM. 22.300 of Hyderabad-Bangalore section of National Highway 7 in the State of Andhra Pradesh at a contract price of Rs.74,88,79,544.69. The Agreement contains an arbitration clause.

       According to the petitioners, in September, 2004, i.e. after more than three years of Contract-Agreement, it was alleged by the respondent that the petitioners had furnished forged Bank Guarantees for availing mobilization and other advances under the Contract Agreement. The respondent, in view of the Arbitration Clause, filed OMP No. 342 of 2004 in the High Court of Delhi against the petitioners under Section 9 of the Act for interim relief. The High Court passed interim directions restraining the petitioners from removing and/or transferring machinery and stock placed by them at the site for execution of work. On December 13, 2004, the respondent invoked Clause 59 of the Agreement and terminated the contract. There was exchange of letters and notices between the parties. Ultimately, by a communication dated April 7, 2005, the petitioners intimated the respondent that in accordance with the Arbitration Clause, they had appointed Hon’ble Mr.Justice A.K. Srivastava, a retired Judge of the High Court of Delhi as their nominee Arbitrator. According to the petitioners, in the second half of June, the respondent addressed a letter to Mr. C.S. Balaramamurthi, purported to have been written on April 7, 2005 appointing him as the nominee Arbitrator of NHAI. From the record, it appears that the two Arbitrators could not agree to an appointment of Third Arbitrator. The respondent intended to appoint a ‘technical’ man as the Third Arbitrator as the matter was of a ‘highly technical nature’, but the arbitrator appointed by the petitioners insisted that the Presiding Arbitrator should be a retired Chief Justice or a Judge of a High Court, who should be senior to him (Justice Srivastava). It is also on record that the respondent appointed Mr. K.P. Mohanty as the Presiding Arbitrator. Subsequently, however, his appointment was not continued. In February, 2006, Justice Srivastava had shown his unwillingness to continue as Arbitrator and the petitioners nominated Hon’ble Mr. Justice V.A. Mohta, retired Chief Justice of High Court of Orissa as their nominee Arbitrator in place of Justice Srivastava. Since the parties could not agree as to appointment of Third/Presiding Arbitrator, the petitioners have filed the present petition praying therein that the Chief Justice of India may be pleased to appoint a retired Judge of the Supreme Court of India or a retired Chief Justice of a High Court as Presiding Arbitrator.

       Findings of the Court:

       There is no ambiguity in the arbitration clause. Moreover the matter already stands concluded by Supreme Court in (2006) 4 SCC 372.

       Result : Appeal dismissed.