The main legal point established in the judgment is the requirement for both parties to approach the designated association or arbitrator for settlement by arbitration, as per the arbitration clause, and the necessity for proper intimation and service of notices.

V.B. Gupta, J.

Present appeal has been filed by appellants under Section 37 of Arbitration and Conciliation Act, 1996 (for short as ‘Act’), against judgment dated 28th May, 2007 passed by Additional District Judge, Delhi, vide which objections preferred by appellants against ex parte award dated 12th September, 2002, were dismissed.

2. Brief facts are that respondent no.1-claimant, filed claim against appellants before Arbitrator. Arbitrator sent summons to both parties. Claimant appeared before Arbitrator, whereas, appellants did not appear. The Arbitrator proceeded ex parte against appellants. After considering the claim of claimant, Arbitrator passed an award in his favour, on 12th September, 2002.

3. It is contended by learned counsel for appellants that as per Arbitration clause, both parties had to jointly approach Delhi Hindustani Mercantile Association or the Arbitral Tribunal, appointed by them for settlement in case of any disputes regarding payment etc. In the present case, respondent no. 1 approached Delhi Hindustani Mercantile Association on its own, without any request from the appellants. This unilateral act of respondent no.1 in approaching the Association, was contrary to the arbitration clause and not tenable. Appointment of Arbitrator was thus contrary to the provisions and spirit of Arbitration clause.

4. Other contention is that no notice of Arbitration proceedings was actually served upon the appellants. As per various notices sent at different addresses allegedly pertaining to that of appellants, it was clear that appellants were not available at those addresses. Thus there was no proper intimation with regard to the Arbitration proceedings to the appellants. The impugned judgment is thus liable to be set aside.

.5. In support of its contentions, learned counsel for appellant relied upon a decision of Supreme Court; Municipal Corporation, Jabalpur and others Vs. M/s Rajesh Construction Co. AIR 2007, SC 2069 and a decision of this Court; FAO 112/05, decided on 18th April, 2007.

6. On the other hand, it is contended by learned counsel for respondent no. 1, that Arbitrator had sent notices to appellants on the addresses given by appellants. As per arbitration clause, both parties had the right to approach for appointment of the Arbitrator. It is nowhere stated that both parties had to jointly approach for appointment of the Arbitrator. Hence, there is no ambiguity in the impugned judgment.

.7. Arbitration clause mentioned on the bills reads as under:-

.“In case of any dispute between you and us regarding payment etc. or any other business matter we both shall approach the Delhi Hindustani Mercantile Association Delhi or the arbitrator or tribunal appointed by them for settlement by arbitration according to their rules & the decision given by them shall be binding on both of us & we shall have no objection to it.”

8. As per this clause, in case of any dispute between the parties, both of them had to approach the Delhi Hindustani Mercantile Association, Delhi or Arbitrator or tribunal appointed by them for settlement by Arbitration.

9. Admittedly, in the present case, appellants never approached Delhi Hindustani Mercantile Association or Arbitrator. It is respondent no. 1 who alone had approached Delhi Hindustani Mercantile Association for appointment of the Arbitrator. Thus, there is clear violation of above clause of the Arbitration.

.10. In Municipal Corporation, Jabalpur (Supra), it was observed that;

.“It has to be kept in mind that it is always duty of the Court to construe the arbitration agreement in a manner so as to uphold the same. Therefore, we must hold that the High Court ought not to have appointed an arbitrator in a manner, which was inconsistent with the arbitration agreement”.

.11. So, the appointment of Arbitrator only at the instance of respondent no. 1 alone, is contrary to the arbitration agreement. The matter could have been referred to Arbitrator, only after both parties i.e.