IMPORTANT POINT
Appointment of Arbitrator – Once dispute has arisen between parties and despite invocation of arbitration clause in terms of agreement no Arbitrator is appointed, it can be said that authority has forfeited its right to appoint Arbitrator in terms of arbitration agreement.

JUDGMENT

M.R. Shah, J.

Feeling aggrieved and dissatisfied with the impugned judgment and order dated 15.09.2021 passed by the High Court of Judicature at Allahabad in Arbitration Application No. 15 of 2021, by which, while allowing the application under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') filed by the appellant herein original applicant, the High Court has directed respondent herein to send a fresh panel of four retired officers in terms of clause 64(3)(b) of the General Conditions of Contract (hereinafter referred to as the 'GCC') and thereafter, the appellant herein original applicant shall select two from the four suggested names and thereafter the respondent shall constitute the Arbitral Tribunal in terms of clause 64(3)(b) of the GCC, the original applicant has preferred the present appeal.

2. That the appellant and respondent herein entered into a contract/agreement which contains the arbitration clause. As per clause 32 of the agreement, in the event of any question, dispute or difference arising under or in connection with agreement, the same shall be referred to the sole arbitration of a person appointed to be the arbitrator, by the General Manager of the Railway. A request/prayer was made by the appellant herein original applicant to appoint an arbitrator in terms of clause 32 of the agreement. However, the General Manager/Railway failed to appoint an arbitrator as provided under clause 32 of the agreement. Therefore, the appellant herein original applicant filed the application before the High Court under Section 11(6) of the Act and requested to appoint a sole arbitrator. Though, the High Court has observed that the respondent has failed to appoint an arbitrator despite raising the demand of appointing an arbitrator, the application was hence liable to succeed. However, thereafter instead of appointing the sole arbitrator in exercise of powers under Section 11(6) of the Act, the High Court has directed to appoint an arbitrator in terms of clause 64(3)(b) of the GCC. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court in not appointing the sole arbitrator and instead directing the parties to appoint the arbitrator as per the GCC, the original applicant before the High Court has preferred the present appeal.

3. Shri Ramesh Singh, learned Senior Advocate appearing on behalf of the appellant herein has vehemently submitted that the High Court has committed a serious error in not appointing the sole arbitrator in exercise of powers vested under Section 11(6) of the Act.

3.1 It is submitted that the parties to the agreement are governed by the arbitration agreement/clause in terms of the clause 32 of the agreement. It is submitted that despite invocation of the arbitration clause in terms of the agreement the respondent failed to appoint an arbitrator. It is contended that therefore the respondent forfeited its right to appoint an arbitrator under the agreement and therefore, the High Court was required to appoint a sole arbitrator in exercise of powers under Section 11(6) of the Act. Reliance is placed on the decision of this Court in the case of Deep Trading Company vs. Indian Oil Corporation and Others; (2013) 4 SCC 35.

3.2 It is further submitted by Shri Ramesh Singh, learned Senior Advocate appearing on behalf of the appellant original applicant that the High Court has seriously erred in directing the parties to appoint the arbitrator in terms of clause 64(3)(b) of the GCC.

3.3 It is contended that in the present case the General Conditions of Contract is not applicable at all on the grounds inter-alia that (i) neither the GCC has been signed by the parties nor the governing agreement makes any reference to the GCC; (ii) the parties to the original agreement are neither signatory to the GCC nor the GCC is made part of the original agreement entered into between the parties; (iii) even as per the communication dated 1