2003 Supreme(Bom) 868
IN THE HIGH COURT OF BOMBAY
Lodha R.M. Aguiar A.S., JJ.
Oil and Natural Gas Corporation Ltd. .... Petitioner.
Versus
Garware Shipping Corporation Ltd. another.... Respondents.
Writ Petition No. 1450 of 2003, decided on 5-8-2003.
Advocates appeared :
Rajiv Kumar with S.A. Bhalwal i/b. Vyas Bhalwal, for petitioner.
Ms. Rajni Iyer i/b. S. Satpute Co., for respondent No. 1.
Headnote:Arbitration and Conciliation Act, 1996 - Section 16 - adjudication of all aspects of the arbitration agreement including validity of constitution of the arbitral tribunal itself falls under the jurisdiction of the tribunal - appointment of the arbitrator u/s 11 could therefore be adequately agitated before the Arbitral Tribunal u/s 16 - participation in the process and appearance before the Tribunal would not amount to waiver of the right to challenge or acquiescence - application u/Art. 226 of the Constitution before the High Court not proper remedy - award made by Arbitral Tribunal constituted not in accordance with arbitration agreement between the parties - liable to be set aside. 2001 (1) Mh lj (SC) 115; AIR 2000 SC 2821; AIR 2002 SC 778; 2003 (2) Mh LJ 394; 2003 AIR SCW 3429 - Relied upon; 2002 (1) Arb LR 493 (SC) - Referred to.
Constitution of India - Article 226 - alternate remedy - machinery provided u/s 16 of Arbitration and Conciliation Act 1996 to challenge any order u/s 11 - this being efficacious and appropriate remedy, High Court ought not exercise discretion u/Art 226 and entertain such application. 2001 (1) Mh lj (SC) 115; AIR 2000 SC 2821; AIR 2002 SC 778; 2003 (2) Mh LJ 394; 2003 AIR SCW 3429 - Relied upon.
JUDGMENT - LODHA R.M., J.:---On 3rd October, 1984, the petitioner-Oil and Natural Gas Corporation Ltd. (for short O.N.G.C.) entered into time five charter party agreement for supply of vessels with the first respondent (for short owner) initially for a period of 60 months and subsequently extended from time to time on the terms and conditions agreed upon by the parties. The said agreement provided for arbitration. It appears that O.N.G.C. on 18th August, 1988 wrote a letter to the owner inter alia making certain deductions from amount due and payable to them. The deductions were made on account of the excess hire charges having been paid to the owner and were in respect of the invoice dated 30th June, 1988 to 31st December, 1988 for a sum of Rs. 65,37,733/-. The case of the O.N.G.C. is that on 14-8-1991, the owner for the said deductions, invoked arbitration clause and appointed Mr. K. Seshadri, Southern Petrochemicals Industries Ltd., Shipping Division, East Coast Chambers, Madras as an arbitrator and called upon the O.N.G.C. to appoint an arbitrator in terms of Clause 20 of charter party agreement within 30 days from the receipt of notice. It appears that thereafter negotiations for settlement continued between the parties but settlement could not be fructified. The owner on 21st September, 2001 requested the O.N.G.C. to furnish the details of vessel-wise payment made by them for reconciliation. On 24-9-2001, according to O.N.G.C. they requested the owner to furnish vessel-wise details in respect of the payment made by them. Then again on 29-12-2001, the owner made a request to the O.N.G.C. for providing information available with them failing which it was stated that the owner would go for arbitration. On 7-1-2003, the owner informed the O.N.G.C. that they have appointed retired Judge Mr. M.L. Pendse as arbitrator and called upon the O.N.G.C. to appoint arbitrator within 30 days, failing which the owner would apply to the Chief Justice for appointment of arbitrator. When the O.N.G.C. did not respond to the said notice, the owner initiated proceedings under section 11 of the Arbitration and Conciliation Act, 1996 (for short Act of 1996) The designated Judge by the order dated 9-8-2002 appointed retired Judge Mr. M.L. Pendse as an Arbitrator to decide the disputes and differences in respect of the second five year term of charter party. In the said order it was recorded that appointment of retired Judge Mr. M.L. Pendse was by consent. However, by order dated 23rd August, 2002, the words "by consent of the parties" were deleted. The O.N.G.C. challenged the said order appointing retired Judge Mr. M.L. Pendse as arbitrator, before the Supreme Court but the said Special Leave Petition was withdrawn wherein the statement was recorded that the O.N.G.C. would pursue an appropriate remedy. This is how the present writ petition has been filed.
2. Mr. Rajiv Kumar, the learned Counsel for the O.N.G.C. inter alia submitted that appointment of the arbitrator by the designated Judge under section 11 of the Act of 1996 is : (i) de hors the provisions of contract; (ii) unjustified because once the O.N.G.C. invoked Clause 20 of the charter party agreement already by giving the notice dated 14-8-1991 appointing an arbitrator, it was not again open to the O.N.G.C. to appoint yet another arbitrator by a subsequent notice dated 7th January, 2002 and (iii) barred by limitation as the O.N.G.C. had lost its remedy by lapse of time in asmuch as the contract was entered into in the year 1984 and arbitrator was initially appointed by the owner in the year 1991.
3. Ms. Rajni Iyer, the learned Counsel for the owner on the other hand submitted that the writ petition is not maintainable against the order of designated Judge appointing arbitrator. She relied upon (Konkan Railway Corporation Ltd. v. Mehul Construction Co.)1, 2001(1) Bom.C.R. (S.C.)771 , (Konkan Railway Corporation Ltd. v. Rani Construction Pvt. Ltd.)2, 2001(1) Bom.C.R. (S.C.)784 : A.I.R. 2002
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