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SUPREME COURT OF INDIA
UDAY UMESH LALIT, INDU MALHOTRA, JJ.
Perkins Eastman Architects DPC & Anr. – Applicants
Versus
HSCC (India) Ltd. – Respondent
Arbitration Application No.32 of 2019
Decided on : 26-11-2019
Arbitration and Conciliation Act, 1996 – Section 11(6) read with Sections 11(12)(a) and 2(1)(f) – Appointment of Arbitrators by the Chief Justice of India Scheme, 1996 – Appointment of Arbitrator – Applicant No.1 is lead member of Consortium and arbitration in present case would be an International Commercial Arbitration – Appointment was not within time stipulated but such delay on part of respondent could not be said to be an infraction of such magnitude that exercise of power by Court under Section 11 of Act merely on that ground is called for – A person who has interest in outcome or decision of dispute must not have power to appoint a sole Arbitrator – Imperatives of creating healthy arbitration environment demand that instant application deserves acceptance and there is no hindrance in entertaining instant application preferred by Applicants – In instant case no special qualifications such as expertise in any technical field are required of an Arbitrator – A former Judge of Apex Court appointed as sole Arbitrator to decide all disputes arising out of Agreement between parties. (Paras 8, 10, 12, 16, 20, 23, 24 and 25)
Facts of the case:
Present application under Section 11(6) read with Section 11(12)(a) of Arbitration and Conciliation Act, 1996 and under Appointment of Arbitrators by the Chief Justice of India Scheme, 1996, prays for the following principal relief to appoint a sole Arbitrator, in accordance with clause 24 of Contract dated 22nd May, 2017 executed between parties and sole Arbitrator so appointed may adjudicate the disputes and differences between parties arising from said contract.
Findings of Court:
A case is made out to entertain the instant application preferred by the Applicants. We, therefore, accept the application, annul the effect of the letter dated 30.07.2019 issued by respondent and of appointment of Arbitrator. In exercise of power conferred by Section 11(6) of the Act, we appoint Dr. Justice A.K. Sikri, former Judge of this Court as the sole arbitrator to decide all the disputes arising out of the Agreement dated 22.05.2017, between parties, subject to the mandatory declaration made under the amended Section 12 of the Act with respect to independence and impartiality and the ability to devote sufficient time to complete arbitration within period as per Section 29A of the Act.
Result : Appeal disposed of.
JUDGMENT :
Uday Umesh Lalit, J.
1. This application under Section 11(6) read with Section 11(12)(a) of Act [The Arbitration and Conciliation Act, 1996] and under the Scheme [The Appointment of Arbitrators by the Chief Justice of India Scheme, 1996] prays for the following principal relief:
“(a) appoint a sole Arbitrator, in accordance with clause 24 of the Contract dated 22nd May, 2017 executed between the parties and the sole Arbitrator so appointed may adjudicate the disputes and differences between the parties arising from the said Contract.”
2. The application has been filed with following assertions: -
(A) As an executing agency of Ministry of Health and Family Welfare, the respondent was desirous of comprehensive architectural planning and designing for the works provided under Pradhan Mantri Swasthya Suraksha Yojna (PMSSY). Therefore a request for Proposals bearing RFP No.HSCC/3-AIIMS/Guntur/2016 was issued on 15.07.2016 for appointment of Design Consultants for the “comprehensive planning and designing, including preparation and development of concepts, master plan for the campus, preparation of all preliminary and working drawings for various buildings/structures, including preparation of specifications and schedule of quantities’ for the proposed All India Institute of Medical Sciences at Guntur, Andhra Pradesh”.
(B) In response to the RFP, the consortium of the Applicants, namely,
(i) Perkins Eastman Architects DPC, an Architectural firm having its registered office in New York and (ii) Edifice Consultants Private Limited, having its office in Mumbai submitted their bid on 28.09.2016. Letter of Intent was issued on 31.11.2017 awarding the project to the Applicants, the consideration being Rs.15.63 crores. A letter of award was issued in favour of the Applicants on 22.02.2017 and a contract was entered into between the Applicants and the respondent on 22.05.2017, which provided inter alia for dispute resolution in Clause 24. The relevant portion of said Clause was as under:
“24.0 DISPUTE RESOLUTION
24.1 Except as otherwise provided in the contract all questions and disputes relating to the meaning of the specifications, design, drawings and instructions herein before mentioned and as to the quality of services rendered for the works or as to any other question, claim, right, matter or thing whatsoever in any way arising out of or relating to the contract, design, drawings, specifications estimates instructions, orders or these conditions or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of the work or after the cancellation, termination, completion or abandonment thereof thereof shall be dealt with as mentioned hereinafter:
(i) If the Design Consultant considers any work demanded of him to be outside the requirements of the contract or disputes on any drawings, record or decision given in writing by HSCC on any matter in connection with arising out of the contract or carrying out of the work, to be unacceptable, he shall promptly within 15 days request CGM, HSCC in writing for written instruction or decision. There upon, the CGM, HSCC shall give his written instructions or decision within a period of one month from the receipt of the Design Consultant’s letter. If the CGM, HSCC fails to give his instructions or decision in writing within the aforesaid period or if the Design Consultant(s) is dissatisfied with the instructions or decision of the CGM, HSCC, the Design Consultants(s) may, within 15 days of the receipt of decision, appeal to the Director (Engg.) HSCC who shall offer an opportunity to the Design Consultant to be heard, if the latter so desires, and to offer evidence in support of his appeal. The Director (Engg.), HSCC shall give his decision within 30 days of receipt of Design Consultant’s appeal. If the Design Consultant is dissatisfied with the decision, the Design Consultant shall within a period of 30 days from receipt of this decision, g
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