1998 Supreme(Cal) 453

High Court Of Calcutta
NIRENDRA KRISHNA MITRA
MONORANJAN MONDAL - Appellant
Versus
UNION OF INDIA - Respondent
A. P.  161  Of  1998
Decided On : 09/25/1998

The Arbitration and Conciliation Act, 1996 applies to arbitral proceedings which commenced on or after the date it came into force, unless otherwise agreed by the parties.

Headnote:

ARBITRATION AND CONCILIATION ACT - APPOINTMENT OF ARBITRATORS - JURISDICTION - APPLICABILITY OF ARBITRATION ACT, 1940 OR ARBITRATION AND CONCILIATION ACT, 1996 - INTERPRETATION OF SECTION 85(2)(A) OF ARBITRATION AND CONCILIATION ACT, 1996 - COMMENCEMENT OF ARBITRAL PROCEEDINGS - FAILURE OF PARTIES TO AGREE ON APPOINTMENT PROCEDURE - APPOINTMENT OF ARBITRATORS BY CHIEF JUSTICE UNDER SECTION 11(5) OF ARBITRATION AND CONCILIATION ACT, 1996.

Fact of the Case:

145 disputes arose in respect of contracts between the petitioners and the Eastern Railway, covered by the same Arbitration Clause 63 of General Conditions of Contract. Petitioners requested the General Manager, Eastern Railway, to appoint arbitrators and refer disputes to them, but no response was received. Petitioners filed 145 Special Suits under Section 20 of the Arbitration Act, 1940, which were transferred to the High Court. Petitioners suggested names of 15 persons for appointment as arbitrators, including retired Judges and Railway Officers. The respondent appointed 2 arbitrators for each of the 4 District Courts and one sole arbitrator for the High Court, violating the Supreme Court's order to appoint one arbitrator for all disputes in a particular Court. Petitioners filed a contempt petition and the respondent filed an application for clarification of the Supreme Court's order. Both applications were dismissed by the Supreme Court. Petitioners filed the present application under Sections 10 and 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of a sole arbitrator for each of the 5 Courts.

Finding of the Court:

1. No arbitral proceedings had commenced under the Arbitration Act, 1940, as no arbitrator indicated willingness to act and no claims were filed before any arbitrator. 2. The Arbitration and Conciliation Act, 1996 applies to the present case as no arbitral proceedings had commenced under the 1940 Act. 3. The parties agreed to a new procedure for appointment of arbitrators, deviating from the original agreement in Clause 63 of the General Clause of Arbitration. 4. The respondent failed to appoint arbitrators as per the stand taken before the Supreme Court. 5. Petitioners can approach the Chief Justice under Section 11(5) of the Arbitration and Conciliation Act, 1996, for appointment of arbitrators.

Issues: 1. Whether the Arbitration Act, 1940 or the Arbitration and Conciliation Act, 1996 applies to the present case. 2. Whether the parties agreed to a new procedure for appointment of arbitrators. 3. Whether the respondent failed to appoint arbitrators as per the stand taken before the Supreme Court. 4. Whether the petitioners can approach the Chief Justice under Section 11(5) of the Arbitration and Conciliation Act, 1996, for appointment of arbitrators.

Ratio Decidendi: 1. Section 85(2)(a) of the Arbitration and Conciliation Act, 1996 provides that the provisions of the repealed Arbitration Act, 1940, shall apply to arbitral proceedings which commenced before the 1996 Act came into force, unless otherwise agreed by the parties. 2. Arbitral proceedings commence when the arbitrator expresses willingness to act and the claimant lays its claims before the arbitrator. 3. The parties can agree to a new procedure for appointment of arbitrators, deviating from the original agreement. 4. If the parties fail to agree on the appointment procedure, a party may request the Chief Justice to take necessary measures under Section 11(5) of the Arbitration and Conciliation Act, 1996.

Final Decision: The application was allowed, and the matter was referred to the Hon'ble Chief Justice for appointing 5 several sole arbitrators one for each of the five Courts viz., Howrah, Burdwan, Bolpur, Suri and this Hon'ble Court in accordance with the Apex Court' order dated August 21, 1995 and in terms of Section 11 (5) of the Arbitration and Conciliation Act, 1996.