The appointment of a sole Arbitrator becomes infructuous if the Presiding Arbitrator rescinds from the matter, and subsequent appointments to the Tribunal may be subject to further legal action.

MANMOHAN SINGH, J.

1. The petitioner has filed the petition under Section 14 and 15 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the “Act”) for seeking the directions about the Constitution of one Member Tribunal i.e. Mr. R.C. Lahoti, Former Chief Justice of India to act as sole Arbitrator in place of three learned Arbitrators and direct the Center of Arbitration as constituted by this Court to adjudicate the disputes between the parties.

2. Admittedly, disputes arose between the parties. On 29th August, 2012 Settlement Agreement was executed between the parties whereby the petitioner unequivocally and in full and final settlement was obligated to pay Rs.13.50 crores and hand over certain postdated cheques detailed therein.

3. By order dated 15th May, 2013 the petition being OMP No.427/2013 filed by the petitioner under Section 9 of the Act for restraining the respondent from encashing certain postdated cheques in relation to the Settlement Agreement dated 29th August, 2012 with liberty to the petitioner to approach the Arbitral Tribunal under Section 17 of the Act was dismissed.

4. On 13th July, 2013 Procedural order No. 1 was passed by the Arbitral Tribunal constituting of Mr. Justice R.C. Lahoti, Presiding Arbitrator, Justice (Retd.) C.M. Nayar, nominee Arbitrator of the respondent and Mr. Debashish Moitra, Advocate nominee Arbitrator of the petitioner.

5. The two nominee Arbitrators of the respective parties had appointed Justice (Retd.) R.C. Lahoti as the Presiding Arbitrator in terms of the Arbitration Clause contained in the Settlement Agreement dated 29th August, 2012 being clause 13 thereof which has been reproduced here as under:

"All disputes, differences, claims and counter claims between the parties arising out of the Agreement shall be referred to Arbitration under the provision of The Arbitration and Conciliation Act, 1996. Both parties, the Contractor and the Owner, shall nominate an Arbitrator representing them, and these two nominated Arbitrators shall, then appoint the Third Arbitrator who shall preside over the Arbitral Tribunal. The award of the Arbitral Tribunal shall be final and binding on both the parties. The Arbitration shall be conducted in English, and the venue of the Arbitration will be in Delhi"

By this procedural order No. 1 dated 13th July, 2013, the Arbitral Tribunal fixed the fee of the Arbitral Tribunal "In consultation with the learned counsel of the parties", which showed that the fee was fixed with the consent of the parties and the petitioner was represented by their Senior Advocate and two lawyers as well as the representative of the petitioner”.

6. By order dated 11th October, 2013 the Arbitral Tribunal dismissed the application preferred by the petitioner under Section 17 of the Act. The respondent filed the counter-claim in the said arbitration proceedings.

7. On 19th December, 2013, Arbitral Tribunal passed procedural order No. 4 dated 19th December, 2013 and fixed the fee of the Arbitral Tribunal in relation to the counter claim over and above the fee fixed by procedural order No. 1 which related to the claim of the petitioner. The claim of the petitioner as per the statement of claim is Rs.78, 84, 15,000/- and interest thereon @ 18% p.a. The counter claim of the respondent is to the tune of Rs. 25 crores.

8. On 10th February, 2014, procedural order No. 5 was passed by the Arbitral Tribunal for fixing dates and schedule for filing of affidavits by way of examination in chief and also for the cross-examination of the witnesses.

9. It is stated that letter dated 22nd April, 2014 was addressed by the petitioner to the Presiding Arbitrator Mr. Justice R.C. Lahoti whereby it was stated that the additional fees towards counter claim may not be charged. In procedural order No. 7 dated 17th July, 2014 passed by the Arbitral Tribunal it was stated that the affidavits of three witnesses have been filed by the petitioner and two witnesses were present and further