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2002 Supreme(Del) 524
High Court Of Delhi
ORISSA OIL INDUSTRIES LIMITED - Appellant
Versus
TRIBAL COOPERATIVE MARKETING DEVELOPMENT FEDERATION OF INDIA LIMITED - Respondent
Decided On : 04/15/2002
Headnote:a) In the instant case a writ petition was filed challenging the virus of Section 16, 34 and 37 of the Arbitration and Conciliation Act,1996 – It was observed that the judicial review was available for challenging the award in accordance with the provisions of Act – Further, it could not be said that such an order is not subject to judicial scrutiny just because the question of jurisdiction of the arbitrator was required to be considered after the passing of award – The statute cannot be declared ultra virus only because it may face some hardship b) It was adjudged that Section 16(2) of the Arbitration and Conciliation Act, 1996, provides that a question in context of the jurisdiction of the arbitral tribunal can not be raised later than the submission of the statement of the defense – Further, such a question can be raised despite the fact that a party had participated in the appointment of arbitrator c) It was adjudged that a award can be set aside on a ground of challenge under Section 12, 13 and 16 of the of the Arbitration and Conciliation Act, 1996, on the condition that such challenge is made at the first instance before the arbitral tribunal d) It was adjudged that an appeal in terms of Section 37 of the of the Arbitration and Conciliation Act, 1996, would not be maintainable, in case if the question in regards to the lack of jurisdiction raised before the arbitral tribunal is determined against the party
( 1 ). An order of passed by respondent No. 1 herein, i. e. , trifed dated 23. 01. 2002 appointing respondent No. 3 herein as the sole arbitrator is the subject matter of this writ petition. The said order reads thus :-
"tribal CO-OPERATIVE MARKETING development FEDERATION OF INDIA LIMITED ( MINISTRY OF TRIBAL AFFAIRS, GOVT. OF INDIA ) no. TFD / HO / LEGAL / 2001 - 02 /8562 23rd January, 2002 mr. Justice Jaspal Singh ( Retd.) 59, Hemkunt, new Delhi. Sub: Appointment of Sole Arbitrator for arbitration of dispute under Agreement dated 15. 4. 94 between. Trifed and M/s. Orissa Oil Industries Ltd. , Sambalpur -768002 Orissa. Sir, 1. Whereas as per clause 15 of the Agreement dated 15. 4. 94 executed between Tribal Cooperative marketing Development Federation of India Ltd. (Trifed ), ncui - II Floor, August Kranti Marg, new Delhi - 16 and M/s. Orissa Oil Industries Ltd. , sambalpur - 768002, Orissa, all disputes or differences, whatsoever arising between the parties within or relating to the construction / meaning and operation or affect of this agreement or the breach thereof shall be referred to the sole arbitration of the managing Director or his nominee of Trifed. 2. Whereas disputes and differences have arisen and still exist between the parties relating to the performance of the agreement by M/s. Orissa Oil industries Ltd. 3. And whereas M/s. Tribal, Cooperative marketing Development Federation of India Ltd. , invoked the Arbitration Clause. 4. Now, therefore, by virtue of the provision in the agreement, I hereby appoint you as the sole arbitrator and request to enter upon reference and pronounce the award as early as possible in respect of the disputes in accordance with the said agreement and in accordance with law. Thanking You yours faithfully ( PRATIBHA KARAN ) ias managing DIRECTOR copy to : m/s. Orissa Oil Industries Ltd. Sambalpur - 768002 orissa. "
( 2 ). The contention raised in this writ petition is that having regard to the fact that respondent No. 1 had moved this Court for appointment of an arbitrator under Section 8 of the Arbitration and conciliation Act, 1996 ( hereinafter referred to as the Act ) wherein this Court by an order dated 25. 01. 2001 in A. A. No. 165/2000 appointed Shri N. L. Kakkar, a retired District Judge, to resolve the disputes and differences between the parties and as according to the petitioner, there does not exist any other dispute, the impugned order is liable to be set aside.
( 3 ). It has further been contended that the agreements entered into by the parties being dated 15. 05. 1994, 01. 05. 1995 and 01. 05. 1996 are already the subject matter of arbitration proceedings, which are at an advanced stage and thus there cannot be any reason nor there can be any justification for appointment of another arbitrator. Such appointment of an arbitrator, according to the petitioner, is not only mala fide, but contemptuous to the order dated 25. 01. 2001 passed by this Court in A. A. No. 165/2000.
( 4 ). The petitioner in this writ petition has also inter alia questioned the vires of Sections 16, 34 and 37 of the Act as being repugnant to the Article 14 of the Constitution of India ( in short, the Constitution ).
( 5 ). The learned counsel on behalf of the petitioner would contend that the question as regards jurisdiction of the arbitral tribunal cannot be questioned in terms of sub-section (2) of Section 16 of the Act inasmuch even if the said question is raised and determined against the petitioner, neither any appeal would lie thereagainst in terms of Section 37 of the Act nor such a case would be covered by Section 34 thereof.
( 6 ). The learned counsel would, therefore, contend that in any event even if such a question can be raised before the arbitrator, the petitioner would not be in a position to file any counter claim as the same would negate its challenge on the ground of acquiescence and thus it may be held that it is estopped and precluded from raising the said question o
