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1984 Supreme(Del) 194
High Court Of Delhi
DELHI DEVELOPMENT AUTHORITY - Appellant
Versus
ALKARMA - Respondent
First Appeal (OS) 60 of 1981
Decided On : 08/08/1984
G.S.SISTANI, N.S.SISTANI, RISHIKESH
The principles analogous to Order 6 Rule 17 of the Code of Civil Procedure are applicable to arbitration proceedings, allowing a claimant to ask for more disputes to be referred to arbitration before the making of the award.
Headnote:
ARBITRATION - APPOINTMENT OF ARBITRATOR - JURISDICTION OF COURT - APPLICABILITY OF ORDER II RULE 2 OF THE CODE OF CIVIL PROCEDURE - PRINCIPLES ANALOGOUS TO ORDER 6 RULE 17 OF THE CODE OF CIVIL PROCEDURE - APPLICABILITY.
Fact of the Case:
A dispute arose between the parties to a contract containing an arbitration clause. The respondent invoked the arbitration clause and an award was made. After the completion of the work, the appellant prepared the final bill and the respondent requested for the appointment of an arbitrator. The Engineer Member of the D.D.A. appointed an arbitrator who made and published his award. The respondent then made another request for referring certain items of disputes to arbitration, which was rejected. The respondent filed an application under section 20 of the Arbitration Act, seeking a direction to the appellants to file the original arbitration agreement and to the Engineer Member to appoint an arbitrator.
Finding of the Court:
The court held that the Engineer Member had the jurisdiction to appoint an arbitrator and to refer the disputes to him in terms of clause 25 of the agreement. The court also held that the principles analogous to Order II Rule 2 of the Code of Civil Procedure were not applicable to arbitration proceedings, but the principles analogous to Order 6 Rule 17 of the Code of Civil Procedure were applicable. The court further held that the provisions of Order II Rule 2 would apply if the request for referring more disputes to arbitration was made after the making of the award, but not if the request was made before the making of the award.
Issues: 1. Whether the Engineer-Member of the appellant No. 1 can be directed to appoint an arbitrator and to refer to him the dispute between the parties? 2. Whether the provisions of Order. 11 Rule 2 of the Code of Civil Procedure are applicable to arbitration proceedings.
Ratio Decidendi: 1. The court held that the Engineer Member had the jurisdiction to appoint an arbitrator and to refer the disputes to him in terms of clause 25 of the agreement, relying on a Full Bench decision of the Delhi High Court in Suit No. 625-A of 1982 titled as Shri V. P. Mittal vs. Union of India and others. 2. The court held that the principles analogous to Order II Rule 2 of the Code of Civil Procedure were not applicable to arbitration proceedings, but the principles analogous to Order 6 Rule 17 of the Code of Civil Procedure were applicable. The court reasoned that the arbitrator would have no jurisdiction to entertain more disputes after the making of the award, but that the claimant could ask for more disputes to be referred to arbitration before the making of the award, by invoking the principles analogous to Order 6 Rule 17.
Final Decision: The appeal was dismissed. The Engineer Member was directed to appoint an arbitrator within two months and refer the disputes set out in the Annexure to the letter dated 3-10-1979 to the arbitrator.
( 1 ) (ORAL ). The two questions which arise for consideration in this First Appeal are (1) Whether the Engineer-Member of the appellant No. 1 can be directed to appoint an arbitrator and to refer to him the dispute between the parties, and (2) whether the provisions of Order. 11 Rule 2 of the Code of Civil Procedure are applicable to arbitration proceedings.
( 2 ) BRIEFLY stated, the facts of the case are that an agreement had been entered into between the parties, whereby the respondent. had to execute some work. The said agreement contained an arbitration clause, namely. Clause 25 which reads as under :
"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 or workmanship or materials used on the work or as to any other question, claim, right, matter or thing whatsoever, in any way arising out of or relating to the contract, design drawings, specifications, estimates, instruction, orders or these conditions or otherwise concerning the works, or the execution or failure to execute the same shall be referred to the sole arbitration of the person appointed by the Engineer Member, Delhi Development Authority at the time of disputes. It will be no objection to any such appointment that the arbitrator so appointed is a Delhi Development Authority employee, that he had to deal with the matters to which the contract relates and that in the course of his duties as Delhi Development Authority employee he had expressed views on all or any of the matters in dispute or difference. The arbitrator to whom the matter is originally referred being transferred or vacating his office or being unable to act for any reason, such Engineer Member, Delhi, Delhi Development Authority as aforesaid, at the time of such transfer, vacation of office or inability to act shall appoint another person to act as arbitrator in accordance with the terms of the contract. Such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor. It is also a term of this contract that no person other than a person appointed by such Engineer Member, Delhi Development Authority as aforesaid should act as arbitrator and, if for any reason, that is not possible, the matter is not to be referred to arbitration at all. In all cases where the amount of the claim in dispute is Rs. 50,000 (Rupees fifty thousand) and above, the arbitrator will give reasons for the award. Subject as aforesaid the provisions of the Arbitration Act, 1940 or any statutory modification or re-enactment thereof and the rules made thereunder and for the time being in force shall apply to the arbitration proceeding under this clause. It is a term of the contract that the party invoking arbitration shall specify the dispute or disputes to be refetrred to arbitration under this clause together with the amount or amounts claimed in respect of each such disputes. "
( 3 ) THE respondent invoked the arbitration clause when some disputes had arisen between the parties. The said disputes were referred to arbitration and an award was made. We are not concerned with that award in this case.
( 4 ) AFTER the work had been completed, the appellant prepared the final bill on 15th July, 1978 and the same was finalised. As the respondent was not satisfied, he requested for the appointment of an arbitrator on 14th July, 1978. On this request being received, the Engineer Member of the D. D. A. , who was the Competent Authority, appointed Shri G, Subramanyam, Superintending Engineer, to be the sole-arbitrator. His appointment was made on 20th March, 1979.
( 5 ) ACCORDING to the terms of clause 25 of the arbitration agreement, the disputes which were referred to Shri Subramanyam were those which were specifically mentioned by the respondent in its letter dated 14th July, 1978. It appears that during the pendency of t
