Point of law : The provisions under the contract for constitution of the standing arbitral tribunal were violation of the amended provisions of Section 12 of the Act of 1996 read in conjunction with the 5th and 7th Schedule.

JUDGMENT :

1. The petitioner has applied under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of arbitrators to adjudicate on the disputes and differences between the parties in respect of the contract dated March 10, 2010.

2. Learned Senior Advocate appearing for the petitioner has submitted that, the parties entered into a contract dated March 10, 2020. Such contract has an arbitration clause. He has referred to Clause 17.9 which is the arbitration clause. He has submitted that the arbitration clause contemplate that the respondent would supply a panel of five arbitrators for the petitioner to choose one from such panel. The petitioner had invoked the arbitration clause by a letter dated January 9, 2021. In response thereto, the respondent by a letter dated February 1, 2021 had forwarded a panel of five arbitrators. He has commented upon the panel suggested by the respondent. According to him, the panel comprises of ex-employees of Indian Railways. He has referred to the reply dated February 10, 2021 by which, the petitioner had suggested a retired judge of this Hon’ble Court as the arbitrator.

3. Learned Senior Advocate appearing for the petitioner has submitted that, the panel of arbitrators as suggested by the respondent is disqualified under Section 12(5) of the Act of 1996 read with Schedule 5 and 7 thereof. According to him, the respondent is a Central Public Sector Enterprise with the Ministry of Railways holding over 51 per cent of the shares of the respondent. According to him, the respondent is under the Ministry of Railways. He has pointed out that, the panel suggested by the respondent consists of retired personnel of the Railways. He has contended that, as retired employees of Indian Railways they suffer the embargo of the fifth and the seventh Schedule of the Act of 1996. There is justifiable doubt as to the impartiality and independence of the panel. In support of his contentions, learned senior advocate appearing for the petitioner has relied upon 2017 (4) SCC 665 (Voestalpine Schienen GMBH v. Delhi Metro Rail Corporation Limited), the order dated March 12, 2020 passed in AP No. 732 of 2018 (M/S Tania Construction Limited v. Union of India), 2020 SCC Online Bom 681 (Afcons Infrastructure Limited v. Konkan Railways Corporation Limited), 2020 Volume 14 Supreme Court Cases 712 (Central Organisation for Railway Electrification v. ECI-SPIC-SMO-MCML (JV) A Joint Venture Company) and the order dated March 17, 2021 passed in AP No. 297 of 2018 (Techma Engineering Enterprises Pvt. Ltd. v. Union of India).

4. Learned Senior Advocate appearing for the respondent has submitted that, none of the persons comprised in the panel suggested by the respondent stands disqualified under Section 12(5) of the Act of 1996 or the Schedule 5 or Schedule 7 thereof. He has submitted that, the persons comprised in the panel retired from Railway service a long time ago. There cannot be any justifiable reason to doubt the impartiality and independence of the members constituting the panel. He has submitted that, the Court cannot re-write the contract between the parties. In any event, during the pendency of the matter, the respondent had forwarded a name of three more arbitrators from which, the petitioner can choose any. In aggregate the respondent has forwarded eight names to the petitioner.

5. Referring to Central Organization for Railways Electrification (supra) learned senior advocate appearing for the respondent has submitted that, in the facts of the present case, there is no irregularity in the respondent forwarding a panel of arbitrators for the petitioner to choose from. Therefore, he has submitted that, the Court need not exercise jurisdiction under Section 11(6) of the Act of 1996.

6. In reply, learned Senior Advoacte for the petitioner has relied upon the order dated January 11, 2021 of the Supreme Court passed in SLP(C) No. 12670 of 2020 (Union of India vs. M/s Tantia Construction Limited) and submitted