1999 Supreme(Bom) 63

BOMBAY HIGH COURT
F.I. Rebello, J.
ANUPTECH EQUIPMENTS PVT. LTD. - PETITIONER
v.
GANPATI CO-OP. HOUSING SOCIETY LTD. AND OTHERS - RESPONDENTS
Arbitration Petition No.229 of 1998,
Decided on: January 30, 1999

The composition of the Arbitral Tribunal shall be in accordance with the agreement of the parties.

Headnote:

The Court held that the decision of the Arbitral Tribunal to terminate the proceedings under Section 25(a) of the Arbitration and Conciliation Act, 1996 (the Act) was illegal and void as the composition of the Tribunal was contrary to the agreement between the parties. The Court further held that it had jurisdiction to entertain the petition under Article 226 of the Constitution of India as the Arbitral Tribunal was a person to whom a writ could go.

Fact of the Case:

The petitioners and respondent No.1 had entered into an agreement. In terms of the said agreement dated 7th January, 1994 there was a provision to refer disputes arising between them to an Arbitral Tribunal. The petitioners invoked the arbitration clause and appointed Prof. Madhav Deobhakta, as Arbitrator for 3 disputes arising from the claim as contained in letter dated 17th October, 1996. The 1st respondent pointed out that there were still works to be completed. The petitioners informed the 1st respondent that the Arbitrator to be appointed by them had to be a fellow of the Indian Institute of Architects as required by Clause 56. The 1st respondent confirmed that the building was handed over by petitioners on 7th December, 1996. The petitioners once again informed the 1st respondent that the Arbitrator to be appointed had to be a fellow of the Indian Institute of Architects. The petitioners submitted their final claims. The 3rd respondent informed the 1st respondent society his willingness to act as joint Arbitrator. The joint Arbitrators appointed respondent No.4 as the third Arbitrator. The Arbitral Tribunal fixed the 2nd meeting on 18th July, 1997. The petitioners invoked the arbitration clause for further claims and appointed Prof. Madhav Deobhakta, as Arbitrator from the petitioners' side and called on the 1st respondent to appoint joint Arbitrator from their side. The Arbitral Tribunal met on 18th July 1997 and decided to terminate the proceedings under Section 25(a) of the Act and informed that the detailed order will be dispatched by post. The petitioners addressed a letter to the Arbitral Tribunal to point out that Shri D. A. Limaye, the 3rd respondent herein, was not a fellow of the Indian Institute of Architects. The decision dated 1st August, 1997 received by the petitioners on 9th August, 1997 itself shows that Shri D. A. Limaye is not a fellow of the Indian Institute of Architects. The Arbitral Tribunal held that this was known to the petitioners. The award was forwarded to the petitioners by letter dated 6th August, 1997. The petitioners challenged the appointment of Shri D. A. Limaye as Arbitrator under Section 13 read with Section 12(3)(b) of the Act. The petitioners filed a petition praying therein for appointment of suitable person as Arbitrator and contending that the award was a nullity and there was no need to challenge the said Award.

Finding of the Court:

The Court held that the decision of the Arbitral Tribunal to terminate the proceedings under Section 25(a) of the Act was illegal and void as the composition of the Tribunal was contrary to the agreement between the parties. The Court further held that it had jurisdiction to entertain the petition under Article 226 of the Constitution of India as the Arbitral Tribunal was a person to whom a writ could go.

Issues: 1. Whether the decision of the Arbitral Tribunal to terminate the proceedings under Section 25(a) of the Act was legal and valid? 2. Whether the Court had jurisdiction to entertain the petition under Article 226 of the Constitution of India?

Ratio Decidendi: 1. The Court held that the decision of the Arbitral Tribunal to terminate the proceedings under Section 25(a) of the Act was illegal and void as the composition of the Tribunal was contrary to the agreement between the parties. The Court relied on the provisions of the Act, which provide that the composition of the Arbitral Tribunal shall be in accordance with the agreement of the parties. In the instant case, the agreement between the parties required that the Arbitrator be a fellow of the Indian Institute of Architects. However, the 3rd respondent, who was appointed as an Arbitrator, was not a fellow of the Indian Institute of Architects. Therefore, the composition of the Tribunal was contrary to the agreement between the parties and the decision of the Tribunal to terminate the proceedings was illegal and void. 2. The Court held that it had jurisdiction to entertain the petition under Article 226 of the Constitution of India as the Arbitral Tribunal was a person to whom a writ could go. The Court relied on the provisions of Article 226 of the Constitution of India, which empowers the High Courts to issue writs, including writs of certiorari, mandamus, prohibition, quo warranto and habeas corpus, for the enforcement of fundamental rights and for any other purpose. The Court held that the Arbitral Tribunal was a person to whom a writ could go because it was a body or authority performing public functions. The Court further held that the petitioners had no other adequate remedy available to them, as they could not challenge the decision of the Tribunal under Section 34 of the Act, since the decision was not an award.

Final Decision: The Court quashed and set aside the order dated 18th June, 1997 recorded in the Minutes of the said date and the decision dated 1st August, 1997 communicated vide letter dated August 6, 1997.