IMPORTANT POINT
After application has been filed for appointment of Arbitrator under Section 11(6) of Act, before High Court respondents forfeited their right to appoint an Arbitrator under clause of arbitration thereafter.

JUDGMENT :

AJAY RASTOGI, J.

1. Leave granted.

2. The instant appeal has been filed assailing the order dated 26th July, 2019 declining to appoint an Arbitrator in exercise of its power under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter being referred to as “the Act”).

3. The seminal facts not in dispute are that the tender of the appellant was accepted and the same was communicated by letter dated 30th November, 2006 in reference to which a contract agreement was executed between the parties containing clauses 63 and 64 of the general conditions of contract containing the clause of arbitration for settlement of claims and/or disputes between the parties. Since there were claims which could not be settled, the appellant served a legal notice dated 3rd August, 2009 for appointment of an Arbitrator and for settlement of claims. Although, there was no express reference made of clauses 63 and 64 in the notice, but the pith and substance of the notice dated 3rd August, 2009 was for settlement of disputes through the process of arbitration in terms of the clause of arbitration under general conditions of agreement which is a part of the contract agreement executed between the parties.

4. It is not disputed that the notice dated 3rd August, 2009 was duly served upon the respondents. It is alleged that since the respondents failed to appoint an arbitrator pursuant to notice dated 3rd August 2009, Arbitration Petition (ARBP No. 61 of 2009) came to be filed on 23rd October, 2009 in the High Court of Orissa for appointment of an Arbitrator under Section 11(6) of the Act.

5. It reveals from the record that just after filing of the arbitration petition, the appellant has completely forgotten of taking action in furtherance thereto and it was never in notice of the respondents of such petition being filed since no notice was served at any stage.

6. In the meanwhile, the respondents vide letter dated 28th January, 2010, in response to the letter of the appellant dated 3rd August, 2009 asked the appellant to select two names from a panel of four persons.

7. It is alleged that immediately thereafter, on 17th February 2010, Miscellaneous Case No. 4 of 2010 was filed in Arbitration Petition No. 61 of 2009 seeking an order restraining the respondents from appointing an Arbitrator and that application too remained pending and no action was taken up by the appellant to pursue either the Arbitration Petition No. 61 of 2009 or the Miscellaneous Case No. 4 of 2010 before the High Court.

8. In the meanwhile, by letter dated 28th August 2010, two officers from the panel suggested by the respondents were selected by the appellant and in furtherance thereto, the respondents constituted an Arbitration Tribunal by letter dated 24th September, 2010. The appellant thereafter appeared before the Arbitral Tribunal on 25th October, 2010 and preferred statement of claim. The respondents also submitted their statement of defence on 15th November, 2010.

9. The appellant thereafter appeared before the Arbitral Tribunal on 27th December, 2011 and submitted an application that the Tribunal has not been nominated within the stipulated time and hence, the constitution of the Arbitral Tribunal is not valid and further submitted that the Tribunal should not proceed with the arbitration proceedings. The fact still remains that the arbitration petition filed by the appellant on 23rd October, 2009 has not seen the light of the day except the fact that it was filed in the Registry of the High Court.

10. Since the Arbitral Tribunal was constituted, with consent of the appellant, the Tribunal proceeded with the arbitration proceedings and since the appellant failed to participate despite the opportunity being afforded, ex-parte award came to be passed on 21st June, 2013 rejecting the claim of the appellant. The fact is that finally in the arbitration petition filed by the appellant, notices were issued to the respondents by the High Court in the year 2016, almos