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2009 Supreme(SC) 1831
SUPREME COURT OF INDIA
Aftab Alam, Tarun Chatterjee
BHARAT SANCHAR NIGAM LTD. & ANR. - APPELLANTS
v.
SHRI DHANURDHAR CHAMPATIRAY - RESPONDENT.
Civil Appeal Nos. 8230, 8231, 8232, 8233, 8234 of 2009
Decided on : December 11, 2009.
Debasish Moitra, Ajit Kr. Pande - Appellant.
Parmanand Gaur - Respondent.
Headnote:
Arbitration and Conciliation Act, 2006 - Section 11(6) - Appointment of arbitrators - Union of India v. Bharat Battery Manufacturing Co. Pvt. Ltd - Appeals by special leave have been filed against orders passed by High Court of Orissa whereby High Court had appointed - Senior Advocate of Orissa High Court sole arbitrator on application of respondent filed Section - Arbitration and Conciliation hereinafter referred to Since parties and subject-matter of dispute are same Court have clubbed all these appeals and same are being decided analogously by this common judgment avoid any confusion - Department in charge of work at time of dispute or there be no Chief Engineer Administrative Head of the said Telecommunication/Postal Department was to be appointed sole arbitrator said provision envisaged that in terms thereof no person other than one appointed by such Chief Engineer or Administrative Head of Telecommunication/Postal as aforesaid should act as arbitrator to decide disputes referred to him –Held, Court said case did not appear to have focused on the requirement to have due regard to the qualifications required by agreement or other conditions necessary to secure the appointment of an independent and impartial arbitrator - In aforesaid decision this Court also concluded that since requirement of sub-section of Section was not all dealt with by High Court in its order appointment of an arbitrator without dealing with Sub-Section Section Act became vulnerable and accordingly such appointment was set aside - Similar position case - In this case also before appointing an arbitrator Section High Court had failed to take into consideration the effect of Section as was done in Northern Railway Administration (supra) - In view of the discussions made hereinabove and particularly, in view of the principles laid down by this Court in Northern Railway Administration (supra) Court set aside the impugned order and remand the case back to the High Court for fresh decision of application Section and while considering the application afresh, the High Court is directed to take into consideration the aforesaid decision of this Court at hand High Court does not appear have focused on the requirement to have due regard to the qualifications required by agreement or other considerations necessary to secure the appointment of an independent and impartial arbitrator - It needs no reiteration that appointment of arbitrator or arbitrators named in the arbitration agreement is not a must but while making appointment twin requirements of Sub-section Section have be kept in view considered and taken into account - If it is not done appointment becomes vulnerable - In circumstances we set aside appointment made in each case remit the matters to High Court to make fresh appointments keeping in view parameters indicated - Appeal allowed
JUDGMENT
TARUN CHATTERJEE, J.
Leave granted.
These appeals by special leave have been filed against the orders dated 5th of January 2005 in A.R.B.P. Nos. 11, 12, 17, 18 and 28 of 2005 passed by the High Court of Orissa whereby the High Court had appointed Sh. Bibhudhendra Mishra, a Senior Advocate of the Orissa High Court as the sole arbitrator on the application of the respondent filed under Section 11(6) of the Arbitration and Conciliation Act, 2006 (hereinafter referred to as "the Act"). Since the parties and the subject-matter of the dispute are the same, we have clubbed all these appeals and the same are being decided analogously by this common judgment to avoid any confusion.
The relevant facts leading to the filing of these appeals as emerging from the records may be briefly stated as follows :
The parties herein entered into a contract pursuant to distinct notices inviting tender by BSNL [in short 'the appellant'] for the work of construction of 4 Nos. of Type - II, 2 Nos. Type - III and 1 No. of Type - IV Staff Quarters at Bhanjanagar of vertical extension to combined building at Aska of 3 Nos. of Type III, 3 Nos. of Type II and 4 K type T.E. building at Jankia and of vertical extension to 8 Nos. of Type II and 6 Nos. of Type IV staff quarters at CTTC compound Vanivihar, Bhubaneshwar.
The said contract contained an arbitration clause in terms whereof the Chief Engineer, Telecommunication/Postal Department in charge of the work at the time of dispute, or if there be no Chief Engineer, the Administrative Head of the said Telecommunication/Postal Department was to be appointed as a sole arbitrator. The said provision envisaged that in terms thereof no person other than the one appointed by such Chief Engineer or Administrative Head of the Telecommunication/Postal as aforesaid should act as arbitrator to decide the disputes referred to him.
The Respondent by letters, requested the Chief Engineer (Civil) for appointment of an arbitrator to adjudicate the disputes between the parties in terms of clause 25 of the respective agreements. According to the respondent, letters were received by the Chief Engineer of the appellant No. 1 on different dates. The Appellants having failed to respond to the letters of respondent requiring them to appoint an arbitrator and to appoint an arbitrator in response to such letters within the stipulated period in accordance with Clause 25 of the respective Agreements, the respondent was constrained to file petitions under Section 11(6) of the Act for appointment of an Arbitrator. However, according to the case made out by the appellants, on 9th of March, 2005, Chief Engineer (Civil), BSNL had already appointed Sri Gurbaux Singh, Principal Chief Engineer (Arbitration) BSNL vide its office letter No. 69-41(05)/CE(c)/BBSR/205. By the impugned order, the High Court allowed application under S. 11(6) of the Act, and appointed one Sri Bibhudhendra Mishra in place of departmental nominee Sri Gurbaux Singh who was appointed by Chief Engineer (Civil) BSNL of appellant No. 1.
Feeling aggrieved by the said order of the High Court, the appellant has filed these special leave petitions which on grant of leave, were heard in the presence of learned counsel for the parties.
Before we consider the arguments raised by the learned counsel for the parties before us, it would be necessary to refer to Section 11 of the Act, which reads as under :
"Section 11. Appointment of arbitrators. (1) A person of any nationality may be an arbitrator, unless otherwise agreed by the parties.
(2) Subject to sub-section (6), the parties are free to agree on a procedure for appointing the arbitrator or arbitrators.
(3) & (4) ..............
(5) Failing any agreement referred to in sub-section (2), in an arbitration with a sole arbitrator, if the parties fail to agree on the arbitrator within thirty days from receipt of a request by one party from the other party to so agree the appointment shall be made, upon request of a party, by
