Back
IN THE HIGH COURT OF DELHI AT NEW DELHI
VIBHU BAKHRU, J.
GANGOTRI ENTERPRISES LIMITED - Petitioner
Versus
NTPC TAMIL NADU ENERGY COMPANY LIMITED- Respondent
O.M.P. (T) (COMM.) 47 of 2016
Decided On : 16-01-2017
Arbitration - Appointment of Arbitrator - Sections 14, 23, 25, 32 of the Arbitration and Conciliation Act, 1996 - The court held that the decision of the arbitrator rejecting the challenge under Section 12 of the Act cannot be assailed under Section 14 of the Act. The order closing the right of the petitioner to file its claims and terminating the proceedings is amenable to challenge under Section 14 of the Act. The court also found that the order of the arbitrator was not unreasonable, mala fide, or indicative of bias.
Fact of the Case:
The petitioner, Gangotri Enterprises Limited (GEL), filed a petition under Section 14(2) of the Arbitration and Conciliation Act, 1996, seeking the termination of the mandate of the sole arbitrator, Mr N. Sasikumar, and the appointment of an independent arbitrator. The disputes arose from an agreement dated 11.02.2010 between GEL and the respondent, NTECL, regarding a project. GEL raised claims, but the arbitrator closed its right to file the statement of claims and terminated the proceedings.
Finding of the Court:
The court found that the decision of the arbitrator rejecting the challenge under Section 12 of the Act cannot be challenged under Section 14 of the Act. However, the order closing the right of GEL to file its claims and terminating the proceedings is amenable to challenge under Section 14 of the Act. The court also concluded that the order of the arbitrator was not unreasonable, mala fide, or indicative of bias.
Issues: The issues involved whether the decision of the arbitrator rejecting the challenge under Section 12 of the Act can be assailed under Section 14 of the Act, and whether the order closing the right of GEL to file its claims and terminating the proceedings is amenable to challenge under Section 14 of the Act.
Ratio Decidendi: The court held that the decision of the arbitrator rejecting the challenge under Section 12 of the Act cannot be challenged under Section 14 of the Act. However, the order closing the right of GEL to file its claims and terminating the proceedings is amenable to challenge under Section 14 of the Act. The court also found that the order of the arbitrator was not unreasonable, mala fide, or indicative of bias.
Final Decision: The court dismissed the petition with costs quantified at Rs.10,000/- to be paid to the respondent within a period of four weeks.
VIBHU BAKHRU, J.
1. Gangotri Enterprises Limited (hereafter 'GEL') has filed the present petition under Section 14 (2) of the Arbitration and Conciliation Act, 1996 (hereafter 'the Act'), inter alia, praying that an appropriate order terminating the mandate of Mr N. Sasikumar as the sole arbitrator be passed and further, an independent arbitrator be appointed to adjudicate the disputes between GEL and the respondent (hereafter 'NTECL'). Mr N. Sasikumar was appointed the sole arbitrator to adjudicate the disputes that had arisen between the parties in relation to an agreement dated 11.02.2010 (hereafter 'the Agreement').
2. According to GEL, there are justifiable doubts as to independence and impartiality of the arbitrator and therefore, the mandate of Mr N. Sasikumar as a sole arbitrator stands ipso jure terminated. Further that the order dated 28.04.2016 passed by the arbitrator closing the right of GEL to file the statement of claim and terminating the proceedings is perverse and mala fide. It is, accordingly, asserted that proceedings qua GEL's dispute have been terminated unreasonably and unlawfully and, therefore, the arbitrator's mandate stands terminated under Section 14(2) of the Act.
3. In view of the above, the following questions arise for consideration in this petition:
(i) Whether the decision of the arbitrator rejecting the challenge under Section 12 of the Act can be assailed under Section 14 of the Act? (ii) Whether the order dated 28.04.2016 closing the right of GEL to file its claims and thereby terminating the proceedings qua such claims is amenable to challenge under section 14 of the Act, where the arbitral proceedings are not closed but continue in relation to counterclaims of NTECL? (ii) If so, whether in the facts of the circumstances, the order dated 28.04.2016 is perverse, mala fide and unsustainable?
Factual Background
4. NTECL is a joint venture company of NTPC Limited and Tamil Nadu Electricity Board (hereafter TNEB‘). NTECL issued a notice inviting tender for Ash Dyke Package (Location-I) for its Vallur Thermal Power Project(2X500 MW + 1X500 MW) located between Ennore Creek and Kuruvimedu village of Ponneri taluk of Thiruvallur District, State of Tamil Nadu (hereafter 'the Project'). GEL bid for the aforesaid works. GEL's bid was accepted and NTECL issued a Letter of Award (hereafter 'the LOA') dated 11.02.2010 awarding the works relating to the execution of the Project to GEL for a total consideration of Rs.1,93,29,84,000/-. The formal contract - the Agreement - was executed between GEL and NTECL on 11.02.2010.
5. Certain disputes have arisen between the parties in relation to the Agreement. NTECL has encashed the bank guarantees furnished by GEL and also terminated the Agreement. For the purposes of this petition, it is not necessary to delineate the extent of the disputes between the parties. Suffice it to state that in view of the disputes, GEL issued a letter dated 18.01.2014, inter alia, raising claims to the extent of Rs.165.27 crores. NTECL denied the allegations made by GEL in the letter dated 18.01.2014 and appointed Mr Rakesh Samuel, GM (Vallur), Project-in-Charge of Vallur Thermal Power Project as the sole arbitrator in accordance with Clause 56 of the General Conditions of the Contract (GCC). GEL objected to the said appointment by its letter dated 22.02.2014 and requested that an independent arbitrator be appointed.
6. Mr Samuel, the sole arbitrator, entered upon the reference and by his letter dated 07.03.2014, scheduled a hearing on 05.04.2014. GEL objected to the said hearing by its letter dated 05.04.2014 and alleged partiality and bias against the sole arbitrator. GEL did not attend the arbitral hearing scheduled on 05.04.2014. Accordingly, the arbitrator fixed the next hearing on 05.05.2014 at NTECL's corporate office in Chennai. This was communicated to GEL by a letter dated 12.04.2014. GEL immediately responded calling upon the arbitrator not to proceed with the arbitration
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
