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2014 Supreme(Del) 77

High Court of Delhi
THE HONOURABLE MR. JUSTICE RAJIV SAHAI ENDLAW
The Registrar, Indian Council of Arbitration
Versus
K.S. Sidhu
RFA No. 341 of 2013
Decided On : 08-01-2014

Advocate Appeared:
For the Appellant:Murari Kumar, Advocate.
For the Respondent:Dr. K.S. Sidhu, Sr. Advocate with Sunil Mittal, Ms. Maldeep Sidhu, Advocates.

Headnote:

Contract Act, 1872 -Sections 65 & 70 - Once the appointment of respondent as Presiding Arbitrator has been held to be void ab initio, the claim of the respondent cannot be for contractual arbitration fee but can only be for compensation within the meaning of Section 65 of the Contract Act, 1872 - Respondent was made to work as a Presiding Arbitrator and to render the 'interim award' and is thus entitled to be compensated therefor - Claim of the respondent can also be considered under Section 70 of the Contract Act, 1872.

Limitation Act, 1963 -Article 7 - Contract Act, 1872 - Sections 65 or 70 - Arbitration - Fee - Recovery - Scope of - Appeal - Recovery of Arbitration fee together with costs and interest, pendente lite - Letter of termination of appointment of the respondent as Presiding Arbitrator - Respondent has been wronged and despite being a senior respectable member of the legal fraternity, has indeed been treated shabbily - Blame squarely rests on the appellant - Appellant by appointing the respondent as the Presiding Arbitrator, made him conduct the arbitration proceedings - Respondent was not conducting the said proceedings gratuitously - Appellant even if an agent of the parties to arbitration, was responsible for collecting the arbitration fee from parties to arbitration and to pay the same to the respondent - Respondent has not been paid anything for his services - Such conduct is not expected from a body as the appellant - Held, the Court implore upon the appellant to compensate the respondent for his services.

Judgment :

Rajiv Sahai Endlaw, J.

1. The appeal impugns the judgment and decree (dated 04.06.2013 of the Court of Additional District Judge (ADJ)-1, New Delhi District, Patiala House Courts, New Delhi in Suit No.11/2011 (ID No.02403C0004482011) filed by the respondent) in favour of the respondent/plaintiff and against the appellant/defendant for recovery of Rs.5,02,500/- together with costs and interest, pendente lite and future at 10% per annum.

2. Notice of the appeal was issued and the Trial Court record requisitioned. The respondent/plaintiff has filed cross objections. The appeal and the cross objections were admitted for hearing and with the consent of the counsels heard finally and judgment reserved.

3. The respondent/plaintiff on 22.01.2011 instituted the suit from which this appeal arises for recovery of Rs.5,25,000/- from the appellant/defendant with interest at the rate of 12% per annum with effect from 23.03.2007 and till the date of payment, pleading:

(i) that the respondent/plaintiff, a senior advocate was on 06.04.2005 appointed by the appellant/defendant as a Presiding Arbitrator in two arbitration matters registered with the appellant/defendant as AC No.1430/2005 and AC No.1435/2005;

(ii) that the respondent/plaintiff performed his part as the Presiding Arbitrator and in which arbitration proceedings about 30 hearings spread over a period of nearly 30 months during the years 2005 to 2007 were held;

(iii) that an interim award dated 23.03.2007 was made by the respondent/plaintiff in the said arbitration proceedings;

(iv) that the then Registrar of the appellant/defendant felt offended by the said interim award;

(v) that the respondent/plaintiff had vide the said interim award terminated the arbitration proceedings holding the claim as well as the counterclaim (being the two arbitration cases supra) to be vitiated by fraud and collusion;

(vi) however the other two arbitrators did not accept the findings of the respondent/plaintiff in the interim award aforesaid and thus the arbitration proceedings had to be continued further for recording oral evidence preparatory to the making of the final award;

(vii) that after 23.03.2007, the Registrar of the appellant/defendant began to obstruct the proceedings;

(viii) that by the month of August, 2007 the entire evidence in the said arbitration cases had been recorded and the cases were ripe for final arguments;

(ix) that when the arbitration proceedings were listed on 05.10.2007 for hearing final arguments, the respondent/plaintiff received a written communication from the Registrar of the appellant/defendant to the effect that the appointment of the respondent/plaintiff as Presiding Arbitrator was void ab initio and that the Arbitral Tribunal will have to be reconstituted;

(x) the respondent/plaintiff vide his letter dated 07.10.2007 rejected the said communication of the Registrar of the appellant/defendant and called for listing the arbitration cases for hearing but which was not done;

(xi) the respondent/plaintiff filed a petition in this Court under Article 226 of the Constitution of India being WP(C) No.8738/2007 for declaration that the mandate of the respondent/plaintiff as the Presiding Arbitrator continued; however the said writ petition was dismissed on 07.04.2010 on technical grounds;

(xii) the respondent/plaintiff thereafter took the matter to Supreme Court by filing a Special Leave Petition but the same was also rejected on 19.11.2010;

(xiii) that the respondent/plaintiff was entitled to recover travelling allowances under the Rules of the appellant/defendant of Rs.22,500/- at the prescribed rate of Rs.750/- per visit for attending 30 odd arbitration hearings;

(xiv) that after the respondent/plaintiff had been unsuccessful in his challenge to termination of his appointment as Presiding Arbitrator, all that was left for him was to recover his arbitration fee and travelling expenses;

(xv) that the respondent/plaintiff thus vide the plaint in the suit was terminating the contract




























































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