Back
SUPREME COURT OF INDIA
ABHAY MANOHAR SAPRE, INDU MALHOTRA, JJ.
The Government of Haryana PWD Haryana (B and R) Branch – Appellant
Versus
M/s. G.F. Toll Road Pvt. Ltd. & Ors. – Respondents
CIVIL APPEAL NO. 27/2019 (Arising out of S.L.P.(C) No. 20201 of 2018)
Decided On : 03-01-2019
(2012) 7 SCC 71 – Relied upon
Facts of the case:
Following the Appellant – State issuing a Letter of Acceptance to Respondent No. 1 - M/s. G. F. Toll Road Pvt. Ltd. for execution of a works contract for construction, operation and maintenance of Gurgaon-Faridabad Road and Ballabhgarh-Sohna Road on BOT (Build, Operate and Transfer) basis, a Concession Agreement was entered into between the parties. The said agreement contained a dispute resolution clause.
During the execution of the Agreement, disputes arose between the parties. The Respondent No. 1 vide a letter to Respondent No. 2 – Indian Council of Arbitration invoked the Arbitration Clause, and requested the ICA to commence arbitration proceedings. Respondent No. 1 appointed a retired Engineer-in-Chief – Mr. Surjeet Singh as their nominee Arbitrator.
The Appellant – State herein also nominated a retired Engineer-in-Chief, Mr. M.K. Aggarwal as their nominee arbitrator.
The Respondent No. 2 - ICA raised an objection to the arbitrator nominated by the Appellant – State with respect to his integrity and impartiality to act as an arbitrator. The Respondent No. 2 - ICA advised the State to reconsider its nomination.
Respondent No. 1 also raised an objection regarding the independence and impartiality of the Appellant’s nominee arbitrator – Mr. M.K. Aggarwal.
Respondent No. 2 – ICA informed the Appellant – State that it had already appointed a nominee arbitrator on behalf of the Appellant, as well as the Presiding Arbitrator.
Aggrieved by the appointment made by Respondent No. 2 – ICA of the nominee arbitrator, the Appellant – State, filed an application under Section 15 and 16 of the Arbitration and Conciliation Act, 1996 before the District Court, Chandigarh.
The District Court held that the Petition was not maintainable since the Arbitral Tribunal had been constituted, and an objection under Section 16 should be raised before the Tribunal to rule on its own jurisdiction.
The Appellant – State filed a Civil Revision Petition before the High Court, Chandigarh.
The Single Judge of the Punjab and Haryana High Court dismissed the Civil Revision Petition on the ground that the Appellant – State could raise the issue of jurisdiction under Section 16 before the arbitral tribunal.
Subsequent to the impugned Judgment being passed, the Application under Section 16 filed by the Appellant – State was dismissed by a non-speaking Order of the Arbitral Tribunal dated 12.05.2018.
Finding of the Court:
The ICA could not have usurped the jurisdiction over appointment of the nominee arbitrator on behalf of the State prior to the expiry of the 30 days’ period requested by the Petitioner.
Result: Appeal disposed of.
JUDGMENT
INDU MALHOTRA, J.
Leave granted.
1. The present Civil Appeal has been filed by the Appellant – State of Haryana to challenge the Order dated 01.03.2018 passed by the High Court of Punjab and Haryana at Chandigarh in C.R. No. 3279/2017.
2. The factual matrix leading to the filing of the present Appeal, briefly stated is, as under:
2.1. On 12.12.2008 the Appellant – State issued a Letter of Acceptance to Respondent No. 1 - M/s. G. F. Toll Road Pvt. Ltd. for execution of a works contract for construction, operation and maintenance of Gurgaon-Faridabad Road and Ballabhgarh-Sohna Road on BOT (Build, Operate and Transfer) basis.
2.2. A Concession Agreement was entered into between the parties on 31.01.2009. The period of construction was 24 months from 31.05.2009. The said agreement contained a dispute resolution clause which is set out hereinbelow:
“39.2 Arbitration
39.2.1. Any dispute, which is not resolved amicably as provided in Clause 39.1 shall be finally decided by reference to arbitration by a Board of Arbitrators, appointed pursuant to Clause 39.2.2. sub-clause (b) below. Such arbitration shall be held in accordance with the Rules of Arbitration of the Indian Council of Arbitration and shall be subject to the provisions of the Arbitration Act.
39.2.2. There shall be a Board of three arbitrators of whom each party shall select one and the third arbitrator shall be appointed in accordance with the Rules of Arbitration of the Indian Council of Arbitration.”
(Emphasis supplied)
2.3. During the execution of the Agreement, disputes arose between the parties. The Respondent No. 1 - M/s. G. F. Toll Road Pvt. Ltd. vide Letter dated 30.03.2015 to Respondent No. 2 – Indian Council of Arbitration (“ICA”) invoked the Arbitration Clause, and requested the ICA to commence arbitration proceedings. On 05.05.2015, Respondent No. 1 - M/s. G. F. Toll Road Pvt. Ltd. appointed a retired Engineer-in-Chief – Mr. Surjeet Singh as their nominee Arbitrator.
The Appellant – State herein also nominated a retired Engineer-in-Chief, Mr. M.K. Aggarwal as their nominee arbitrator vide Letter dated 08.06.2015.
2.4. The Respondent No. 2 - ICA vide Letter dated 03.08.2015 raised an objection to the arbitrator nominated by the Appellant – State on the ground that he was a retired employee of the State, and there may be justifiable doubts with respect to his integrity and impartiality to act as an arbitrator. The Respondent No. 2 - ICA advised the State to reconsider its nomination.
The Appellant – State refuted the objection raised by Respondent No. 2 – ICA on the ground that there was no rule which prohibited a former employee from being an arbitrator, and there could not be any justifiable doubt with respect to his impartiality since the nominee arbitrator had retired over 10 years ago.
On 24.09.2015, Respondent No. 1 - M/s. G. F. Toll Road Pvt. Ltd. raised an objection regarding the independence and impartiality of the Appellant’s nominee arbitrator – Mr. M.K. Aggarwal. Respondent No. 2 – ICA forwarded the said objection to the Appellant – State.
2.5. The Respondent No. 2 – ICA vide its Letter dated 30.10.2015 reiterated that it has been firmly established that Mr. M.K. Aggarwal had a direct relationship with the Appellant – State as its former employee, which may raise justifiable doubts as to his independence and impartiality in adjudicating the dispute. The Respondent No. 2 – ICA stated that it was in the process of appointing an arbitrator in place of Mr. M.K. Aggarwal and its decision shall be communicated to the Appellant.
2.6. In response, the Appellant – State vide Letter dated 16.11.2015 requested the Respondent No. 2 – ICA for a period of 30 days to appoint a substitute arbitrator.
In the meanwhile, the Respondent No. 2 – ICA vide its Letter dated 23.11.2015 informed the Appellant – State that it had already appointed a nominee arbitrator on behalf of the Appellant, as well as the Presiding Arbitrator.
2.7. Aggrieved by the appointment ma
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
