2011 Supreme(Kar) 289
High Court of Karnataka
THE HONOURABLE MR. JUSTICE ANAND BYREAREDDY
M/s TRS Nirman, Represented by its Managing Partner, Shri. T. Suresh Reddy
Versus
Union of India, represented by the Chief Administrative Officer (Const.) South Western Railway
CIVL MISCELLANEOUS PETITION NO.99 OF 2010 C/W CIVIL MISCELLANEOUS PETITION NO.109 OF 2010 CIVIL MISCELLANEOUS PETITION NO.110 OF 2010 CIVIL MISCELLANEOUS PETITION NO.160 OF 2010
Decided On : 26-04-2011
For the Petitioner:Sampath Bapat, Advocate.
For the Respondent:N.S. Sanjay Gowda, N. Devadas, Senior Counsel, appearing for M/s Nyayamithra, Advocates.
Headnote:ARBITRATION & CONCILIATION ACT, 1996 - Section 11(6): [Anand Byrareddy, J] Petition seeking appointment of Arbitrator to resolve disputes between parties in accordance with the provisions of the agreement - Question whether the Court can issue directions as to the particulars of claims that should be considered by the Arbitrator? - Held, It is for the Arbitral Tribunal to decide on the same, namely, whether such claims are indeed "excepted matters" If the Tribunal summarily rejects the same, the petitioners are certainly provided a remedy under the Act.
Governments/statutory authorities/public sector undertaking reconsider their policy providing for arbitration by employee Arbitrators in deference to the specific provisions of the new Act reiterating the need for independence and impartiality in arbitrators. A general shift may in future be necessary for understanding the word "independent" as referring to someone not connected with either party. That may improve the credibility of arbitration as an alternative dispute resolution process. Be that as it may". From a close examination of the circumstances in each case, it cannot be said that there arises any presumption of bias, partiality or lack of independence on the part of the named Tribunal.
These petitions are heard and disposed of together for the sake of convenience.
2. In CMP 99/2010 the facts are as follows:
The petitioner, a partnership firm, had submitted a tender against an invitation by the South Western Railway, represented by the respondents, for the construction of a Broad Guage line between Kadur and Chikkamagalur, as on 09.03.2005. It was accepted and a formal agreement was executed by the Railway entrusting the work to the petitioner. There were certain General Conditions of Contract and Special conditions of contract, in standard form which are generally made applicable by the Railway to all such contracts. Clause 63 and Clause 64 of the General conditions of Contract contemplate resolution of disputes through arbitration.
It is stated that the respondents, inter alia, raised disputes regarding completion of the work to the extent as claimed by the petitioner and denied payment – while holding out a threat of termination of contract. The petitioner apart from approaching a civil court under Section 9 of the Arbitration and Conciliation Act, 1996 (Hereinafter referred to as the ‘1996 Act’ for brevity) has approached this court under Section 11(6) of the Act seeking the appointment of an independent arbitrator, on the ground that the agreed procedure does not ensure the appointment of an impartial and unbiased arbitrator and further that the respondents having failed to appoint an arbitrator in terms of the agreed procedure even after 100 days of being called upon to do so, the respondents have forfeited their right.
The respondents having facilitated the constitution of the Arbitral Tribunal, much after the present petition was filed, namely on 16.11.2010, where as the petition was filed on 12.7.2010, the petitioner has amended the petition with the leave of this court, to contend that the respondents having belatedly constituted the Tribunal have unfairly deleted certain claims of the petitioner on the footing that they are considered as “excepted matters” which are not capable of being referred to arbitration, in terms of the agreement. This contention of the respondents and the refusal to refer those claims is sought to be questioned in the amended petition.
3. In CMP 109/2010, the facts are as follows: The petitioner is a Government of India Enterprise, it is engaged in the business of works contracts. It had submitted its tender in respect of certain balance work of the proposed construction of a broad guage line between Kadur and Chikkamagalur under taken by the respondent railway. A similar contract was entered into as in the case of the above petition. The commencement of the work was inordinately delayed, not for causes within the control of the petitioner, as claimed. The respondents had however, held that the petitioner was to blame and impose risk and cost involved on the petitioner and terminated the contract. The petitioner promptly sought several claims, raised by it against the respondents on the ground of illegal termination of contract, be referred to arbitration in terms of the procedure under the contract. The respondents while referring the matter to an Arbitral Tribunal have treated one of the claims as an excepted matter not being capable of being referred to arbitration. This is sought to be questioned while also seeking the reference to be made to an independent arbitrator.4. In CMP 110/2010, the facts are as follows: The petitioner and the respondent Railway had entered into a contract, whereby the petitioner was to set up certain infra structural facilities for its Zonal Office at Hubli. He contract was subject to General and Special Conditions of Contract. According to the petitioner, the respondents failed to adhere to the terms of the contract and on the other hand sought to terminate the contract. The petitioner sought reference of the matter to arbitration. The matter having been referred to Arbitration and an award having been passed the same was howev