Objection to arbitral tribunal constitution waived if not raised under Section 16 before statement of defence; 2015 Amendment's disqualification provisions inapplicable to pre-commencement proceedings defined by invocation notice receipt.

JUDGMENT :

ARUN R. PEDNEKER, J.

1. By the present Commercial Arbitration Appeal filed under Section 13 of the Commercial Courts Act, read with Section 37 of the ARBITRATION AND CONCILIATION ACT , 1996, the appellant has challenged the order dated 06/05/2022 passed by the Commercial Court, District Beed, in Civil M.A. (Arbitration) No. 87 of 2018, whereby the Commercial Court was pleased to dismiss the application filed by the Appellant under Section 34 of the ARBITRATION AND CONCILIATION ACT , 1996, and maintained the arbitral award dated 11/02/2018 passed by the Sole Arbitrator.

2. The facts of the appeal, in brief, are as follows :

Pursuant to a tender notice dated 31/05/2002, tenders were invited by the Appellant for the work of improvement and development of the road Chumbli Phata–Patoda–Manjarsumba, i.e. SH/155 and SH/156, from Km. 80/00 to 84/500 and Km. 18/60 to 46/300 in District Beed (Maharashtra) under the B.O.T. scheme. The concession period was 13 years and 6 months. The respondent was found to be the lowest bidder, and the work was accordingly allotted to him. An agreement was executed between the parties.

3. The work was completed on 24/05/2004, and the respondent was permitted to collect toll from 01/07/2004 to 30/06/2016, with the obligation to maintain the road during the said period. It is the case of the Appellant that the condition of the road deteriorated and that the respondent failed to carry out necessary repairs despite repeated complaints received by the Appellant. The respondent was informed accordingly but failed to take corrective measures. Consequently, the Appellant was constrained to stop toll collection and passed an order to that effect.

4. A notice to stop toll collection was issued on 30/06/2014, and toll collection was stopped on 17/07/2014. On 26/06/2014, the claim was settled by the Appellant for an amount of Rs. 67.79 lakhs, and on 27/06/2014, the said amount was paid to the respondent by way of buy-back price.

5. Being dissatisfied with the buy-back price, the respondent issued a notice for settlement of disputes on 30/06/2014 and thereafter sent a reminder on 19/08/2014 to the Chief Engineer. As the dues were not settled, the respondent issued a notice dated 25/09/2014 under Clause 3.4.17 of the tender agreement, requesting the Chief Engineer to refer the disputes to arbitration. Upon failure to do so, the respondent issued another notice dated 28/10/2014 to the Secretary, P.W.D., Government of Maharashtra, seeking reference of disputes to arbitration.

6. Since the disputes were not referred to Arbitration, the respondent approached this Court by filing Arbitration Application No. 2 of 2015 under Section 11 of the ARBITRATION AND CONCILIATION ACT , 1996, seeking appointment of an Arbitrator. It is the case of the respondent that with the consent of both parties, a sole Arbitrator was appointed, and by order dated 02/03/2015, the said Arbitration Application