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2004 Supreme(Del) 478

High Court Of Delhi
WEE AAR CONSTRUCTIVE BUILDERS - Appellant
Versus
DELHI JAL BOARD - Respondent
O.M.P. 219 of 2001
Decided On : 07/09/2004

Advocates Appeared:
Harish Malhotra, RAJENDER AGARWAL, Suresh Tripathy

Headnote:Arbitration and Conciliation Act, 1996 - Section 34 — Challenge to Arbitration Award — Finality clause in the agreement providing that compensation for any loss shall not be payable unless Executive Engineer certifies in writing — Held that the matters falling within the clause cannot be a subject matter of arbitration — The claim and consequent award there-on accordingly set aside.

Mukundakam Sharma, J.

( 1 ) THE respondent awarded a work contract in favour of the petitioner for construction of additional staff quarters at Varun Niketan near Haiderpur Water Treatment Plant. During the execution of the aforesaid contract disputes arose between the parties. The aforesaid contract contained an arbitration clause being Clause 25 which reads as follows:-

"clause 25. ARBITRATION CLAUSE: 01. Except where otherwise provided in the contract all questions and disputes relating to the meaning of the specifications, designs, drawings and instructions hereinbefore mentioned and as to the quality of workmanship or materials used on the work or as to any other question, claim, right, matter or thing whatsoever in any way arising out or relating to the contract, designs, drawings, specifications, estimates, instructions, orders or these conditions or otherwise concerning the works or the execution or the execution or failure to execute the same whether arising during the progress of the work or after completion or abandonment thereof, shall be referred to the sole arbitration of the Commissioner, Municipal Corporation of Delhi, or any person nominated by the Commissioner on his behalf. The award of the arbitrator shall be final, conclusive and binding on all parties to this contract. "

( 2 ) SINCE the aforesaid disputes arose out of or in connection with the contract containing the said arbitration clause, the said disputes were referred to Shri B. R. Taneja by the Chief Executive Officer of the Delhi Jal Board, the respondent No. 1, appointing him as a sole arbitrator. The learned sole arbitrator entered into the reference and called for claims and counter-claims and other relevant documents. The parties submitted their claims and counter-claims and also their replies to the claim upon which the learned arbitrator heard the parties and thereafter passed his award on 15/03/2001. Being aggrieved by the aforesaid award passed by the arbitrator, the petitioner herein has filed the present petition under section 34 of the Arbitration and Conciliation Act.

( 3 ) THE first submission of the learned counsel appearing for the petitioner is that the arbitrator was not validly and properly appointed. In support of the said contention the counsel referred to and relied upon the provisions of clause 25 being the arbitration clause which has already been extracted above. Relying on the same it was submitted that the disputes were to be referred to the sole arbitration of the Commissioner, Municipal Corporation of Delhi, or any person nominated by the Commissioner on his behalf as provided in the said clause. It is submitted that even in spite of the said clause, reference of the disputes have been made by the Chief Executive Officer of the Delhi Jal Board, although he is not the persona designata named in the contract and, therefore, the arbitrator was not validly and properly appointed.

( 4 ) I have considered the aforesaid submission of the counsel appearing for the petitioner. On going through the records I find that the petitioner herein never raised any such objection before the learned arbitrator and instead submitted to the jurisdiction of the said arbitrator appointed by the Chief Executive Officer of the Delhi Jal Board. It also filed its statement of claims and also replies to the counter-claims wherein no such objection as sought to be raised regarding jurisdiction was raised. The petitioner participated in the proceedings without challenging jurisdiction of the arbitrator. After participating in the proceedings for a considerable time, for the first time on 18/10/2000 the petitioner sought to challenge the appointment of the arbitrator on the ground that the arbitrator was not validly appointed. The learned arbitrator considered the said objection and gave a ruling on the same. He has held that the objection regarding the jurisdiction of the arbitrator should have been challenged and raised at the first hearing. He also he















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