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1988 Supreme(Cal) 270

High Court Of Calcutta
M. K. MUKHERJEE, SUDHANSHU SEKHAR GANGULY
M/S.N.P.C.CORPN.LTD. - Appellant
Versus
M/S.S.P.ENTERPRISE (P) - Respondent
C. O.  765  Of  1988
Decided On : 07/08/1988

Advocates Appeared:
J.R.CHATTERJI, TARUN CHATTEJEE

An application under Section 8(2) of the Arbitration Act is maintainable only if the parties do not concur in the appointment of an arbitrator as per the arbitration agreement, or if the arbitrator appointed by consent cannot or does not act.

Headnote:

ARBITRATION - SECTION 8(2) OF THE ARBITRATION ACT - MAINTAINABILITY OF APPLICATION FOR APPOINTMENT OF ARBITRATOR - CONDITIONS PRECEDENT - JURISDICTION OF COURT - INTERPRETATION OF ARBITRATION CLAUSE - CONSENT OF PARTIES - APPOINTMENT OF ARBITRATOR BY AGREED APPOINTING AUTHORITY - CONDITIONS FOR MOVING COURT UNDER SECTION 8(2) OF THE ACT.

Fact of the Case:

Petitioner and opposite party had a contract for earth filling work, with an arbitration clause. Opposite party filed an application under Section 8(2) of the Arbitration Act for appointment of an arbitrator. Petitioner contested the application on grounds of res judicata, maintainability, jurisdiction, and merits.

Finding of the Court:

The court held that the application under Section 8(2) was not maintainable since the opposite party had not approached the Chairman of the National Project Construction Corporation, the agreed appointing authority, for the appointment of an arbitrator. The court also held that the application was premature and not maintainable on other grounds, including res judicata and pendency of a suit under Section 20 of the Arbitration Act.

Issues: 1. Whether the application under Section 8(2) of the Arbitration Act was maintainable? 2. Whether the court had jurisdiction to entertain the application? 3. Whether the arbitration clause was in conformity with Section 8 of the Arbitration Act? 4. Whether the opposite party had fulfilled the preconditions of the arbitration clause?

Ratio Decidendi: 1. An application under Section 8(2) of the Arbitration Act is maintainable only if the parties do not concur in the appointment of an arbitrator as per the arbitration agreement, or if the arbitrator appointed by consent cannot or does not act. 2. The court has jurisdiction to entertain an application under Section 8(2) of the Arbitration Act only if the cause of action arose within its territorial jurisdiction. 3. An arbitration clause providing for the appointment of an arbitrator by an agreed appointing authority is in conformity with Section 8 of the Arbitration Act. 4. The opposite party had not fulfilled the preconditions of the arbitration clause by not approaching the Chairman of the National Project Construction Corporation for the appointment of an arbitrator.

Final Decision: The court set aside the impugned order appointing an arbitrator and quashed the proceedings under Section 8(2) of the Arbitration Act, leaving the opposite party to pursue her reliefs in her suit instituted under Section 20 of the Arbitration Act.

SUDHANSHU SEKHAR GANGULY, J.

( 1 ) THE present matter arises out of an application under S. 115 of the Civil P. C.

( 2 ) ADMITTEDLY in terms of a contract of earth filling the opposite party executed some work for the petitioner 1 and her bills, to a considerable extent, remained unpaid. The contract contained an arbitration clause, being clause 16 and invoking the same the opposite party submitted an application, registered as Misc. Case No. 27 of 1987 before the learned Assistant District Judge, 3rd Court, Alipore under S. 8 (2) of the Arbitration Act for the appointment of an Arbitrator. The petitioner 1 contested the said application. It was urged by the petitioner 1 first that on the selfsame ground the opposite party submitted another application before the learned Judge - being Misc. Case No. 2 of 1987 - which was dismissed on contest on 18-5-87 and the review application being Misc. Case No. 19 of 1987 in respect of the same remaining pending, the instant application was barred by res judicata. It was also urged that the present application was not maintainable since the opposite party instituted T. S. No. 234 of 1986 for filing of the Arbitration Agreement under S. 20 (4) of the Arbitration Act and the said suit was still pending. It was also urged that since the contract was executed at Denkuni, Hooghly and the work was also executed there, the learned Judge had no jurisdiction to entertain the matter. The case of the opposite party was also challenged on merits and it was urged that the opposite party did not finish the work entrusted with her and other agencies had to be engaged to complete the work. It was also urged that the opposite party exaggerated her claims in respect of some items of her bill and that she has already been paid fully for whatever work she has done.

( 3 ) IT appears that before the learned Assistant District Judge it was urged from the side of the opposite party that a notice for appointment of an Arbitrator under cl. 16 of the agreement had been sent to the petitioner on 19-5-1987 under registered post. The receipt of this notice was denied from the side of the petitioner and it was urged from their side that the petition under S. 8 (2) was not maintainable in the absence of such a notice. The petitioner, however, admitted receipt of an Advocate's letter dt. 2-7-1987 from the side of the opposite party. The learned Judge holding that the aforementioned notice dt. 19-5-1987 must have reached the petitioner since it had been sent under registered post and further that in any case the petitioners could have appointed an Arbitrator on the basis of the Advocate's letter dt. 2-7-1987 found the application under S. 8 (2) maintainable in law and he appointed a retired Hon'ble Judge of this Court as the Arbitrator in this case. Hence, this revisional application.

( 4 ) IN the impugned order the learned Judge did not consider the technical objections taken from the side of the petitioner. We feel that he should have considered and recorded his findings with regard to these objections. We fail to understand how the present application under S. 8 (2) of the Act could be maintainable with an earlier application (Misc. Case No. 2 of 1987) for the selfsame relief on identical grounds and under the same provisions of law dismissed on contest and a review application (Misc. Case No. 19 of 1987) in respect of the same remaining pending. We also do not think that with application under S. 20 (4) of the Arbitration Act (T. S. No. 234 of 1986) pending, the present application under S. 8 (2) should have been permitted to continue. Section 8 forms part of Chap. II of the Arbitration Act which contains provisions for arbitration without intervention of a court. Section 20 on the other hand comprises the only section of Chap. III of the Act which provides for arbitration with intervention of a court where there is no suit pending. The scope and the provisions of S. 8 are different from those of S. 20. Section 8








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