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2004 Supreme(AP) 1059

Andhra Pradesh High Court
Judges : BILAL NAZKI, GOPALA KRISHNA TAMADA
Gowthami Solvent Oils Limited - Appellant
Versus
Oil and Natural Gas Commission, K.G.Project - Respondent
Decided On : 09-24-04

Headnote:

Arbitration Act, 1940 - Sections 12 and 17 - Agreement - Disputes - Revision petition filed against an order for appointment of an arbitrator to arbitrate the dispute that has arisen in respect of terms and conditions of an agreement entered into between the parties - Held, The order in the earlier proceedings did not entitle the trial court to appoint an arbitrator in terms of Sec. 8 (1) (b) of the Act on the basis of arbitration clause 15. 01 of the agreement, which had come to an end - In our view, firstly the matter had been concluded by OP, secondly the conditions contemplated under Section 8 of the Act were not satisfied and thirdly there was no case before the trial Court to appoint an arbitrator in terms of Section 8 of the Act - Therefore the order of the trial Court needs to be set aside - Revision petition allowed

BILAL NAZKI, J.

( 1 ) THIS is a revision petition filed against an order of learned Prl. Senior Civil Judge, rajahmundary in O. P. No. 90 of 1994, which was filed under Sections 12 and 17 of the arbitration Act, 1940 (for short "the Act") for appointment of an arbitrator to arbitrate the dispute that has arisen in respect of terms and conditions of an agreement dated 19-5-1987 entered into between the parties.

( 2 ) THE facts leading to filing of OP No. 90 of 1994 were that the respondent herein entered into an agreement on 19-5-1987 with the revision petitioner for supply of natural gas for commercial purposes. In between the parties a dispute arose and in terms of an arbitration clause 15. 01 in the agreement, the matter was referred to arbitration. One AT. Thomas was appointed who could not couclude the arbitration proceedings within four months and he requested the parties to give their consent for extension of time for passing an award. The revision petitioner declined, by a letter dt. 20-11 -1991, to give consent for extension of time. Thereupon the respondent filed OP no. 101 of 1992 under Section 28 of the Act for extension of time. The said OP was dismissed on 22-9-1993. The respondent, however, subsequently appointed a second arbitrator viz. , K. V. Chandran to decide the dispute between the parties. The arbitrator, on 7-3-1994, gave notices to the parties of his intention to take up the arbitration. This was challenged by the revision petitioner by filing OP No, 34 of 1994 under Section 33 of 1the Act. The revision petitioner sought a declaration that the arbitration clause 15. 01 in the agreement had come to an end. He also wanted the trial Court to hold that the appointment of the second arbitrator was void. The trial Court allowed the OP on 7-4-1994 and declared that the appointment of second arbitrator was void and the arbitration clause in the agreement had come to an end as per the orders in OF no. 101 of 1992.

( 3 ) ACCORDING to the revision petitioner, these orders have become final, as no appeal or revision has been preferred against the order in OP No. 101 of 1992 and op No. 34 of 1994, therefore the respondent could have not filed OP No. 90 of 1994 under Sections 12 and 17 of the Act for appointment another arbitrator. It is contended by the revision petitioner that the order in OP No. 90 of 1994 was as such bad;

( 4 ) IT is submitted by the respondent that since A. T. Thomas had expressed his unwillingness to countinue as an arbitrator, op No. 101 of 1992 filed by him for extension of time was dismissed, therefore he appointed another arbitrator viz. , k. V. Chandran to decide the disputes between the parties. When the arbitrator gave notice to the parties, by a letter dated 7-3-1994, it was challenged by the revision petitioner in OP No. 34 of 1994. The OP was allowed by the trial Court holding,"in the absence of specific clause, the second arbitrator cannot be supplied to the previous vacancy by unilateral decision. "

( 5 ) THE respondent was, however, given liberty to approach the Court for appointment of an arbitrator. It is submitted by the respondent that the net result was that the dispute was not settled and therefore he was within his right to move the Court again for appointment of an arbitrator.

( 6 ) THE basic question in this case would be whether, after dismissal of OP No. 101 of 1992 on 22-9-1993 and after appointment of second arbitrator was declared void in OP no. 34 of 1994 on 7-4-1994, the respondent could have approached the Court yet again, without challenging those orders, which had become final between the parties.

( 7 ) THE facts are not in dispute, therefore it is purely a legal question which has to be decided in this revision. The trial Court has applied the provisions of Section 8 (1) (b) of the Act to the facts of the case, whereas the contention of the revision petitioner is that the trial Court Could not have exercised powers under Section 8 of the Act suo motu in the absence






















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