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IN THE HIGH COURT OF DELHI AT NEW DELHI
NAVIN CHAWLA, J.
Applied Communication and Controls – Petitioner
Versus
Union of India & Anr. – Respondents
O.M.P. (T) (COMM.) 75 of 2017
Decided On : 09-05-2018
Arbitration - Appointment of Sole Arbitrator - Arbitration and Conciliation Act, 1996, Section 14 - Clause 23.1, Clause 24 of Conditions of Contract Form DGS&D 68 (Revised)
Fact of the Case:
Disputes arose between the parties in relation to a Rate Contract. The petitioner sought the appointment of an Arbitrator, and after a series of appointments and protests, the court terminated the mandate of the appointed Arbitrator and appointed a new Sole Arbitrator.
Finding of the Court:
The court found that the unilateral amendment to the DSG&D Manual by the respondent cannot amend the specific contract executed between the parties. The court also held that the appointment of the substitute Arbitrator, who was an Officer of the respondent, was ineligible to proceed with the reference. Additionally, the court emphasized the need for expeditious arbitration proceedings and terminated the mandate of the appointed Arbitrator.
Issues: The issues involved the authority of the appointed Arbitrator, the validity of the unilateral amendment to the contract, and the eligibility of the substitute Arbitrator appointed by the respondent.
Ratio Decidendi: The court's decision was influenced by the specific arbitration agreement in the contract, the ineligibility of the appointed Arbitrator, and the need for expeditious arbitration proceedings.
Final Decision: The court terminated the mandate of the appointed Arbitrator and appointed a new Sole Arbitrator for adjudicating the disputes.
NAVIN CHAWLA, J.
1. This petition has been filed under Section 14 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act’) seeking termination of the mandate of Shri.A.K. Sharma, IG (COMM. & IT) who has been appointed as a Sole Arbitrator for adjudicating the disputes that have been arisen between the parties in relation to the Rate Contract dated 17.01.2013.
2. The Rate Contract between the parties contains an Arbitration Agreement in the form of Clause 23.1 thereof, which is reproduced herein below:-
“23.1 In the event of any question, dispute or difference arising under these conditions or any Special Conditions of Contract, or in connection with this Contract (except as to any matters the decisions of which is specially provided for by these or the special conditions) the same shall be referred to the sole arbitration of an officer in the Ministry of Law, appointed to be the arbitrator by the Directorate General of Supplies & Disposals as per Clause 24 of Conditions of Contract Form DGS&D 68 (Revised).”
3. A reading of the above Clause would show that the disputes have to be referred to a Sole Arbitrator who would be appointed by the Directorate General of Supplies & Disposals as per Clause 24 of the Conditions of Contract Form DGS&D 68 (Revised) and shall be an officer in the Ministry of Law. Clause 24 of Conditions of Contract Form DGS&D 68 (Revised) is reproduced hereinunder:-
“CLAUSE- 24- ARBITRATION
(i) In the event of any question, dispute or difference arising under these conditions or any special conditions of contract, or in connection with this contract (except as to any matters the decision of which is specially provided for by these or the special conditions) the same shall be referred to the sole arbitration of an officer in the Ministry of Law, appointed to be the arbitrator by the Director General of Supplies & Disposals. It will be no objection that the arbitrator is a Government Servant that he had to deal with the matters to which the contract relates or that in the course of his duties as a Government servant he has expressed views on all or any of the matters in dispute or difference. The award of the arbitrator shall be final and binding on the parties to this contract.
(ii) In the event of the Arbitrator dying, neglecting or refusing to act or resigning or being unable to act for any reason, or his award being set aside by the court for any reason, shall be lawful for the Director General of Supplies & Disposals to appoint another arbitrator in place of the outgoing arbitrator in the manner aforesaid.
(iii) It is further a term of this contract that no person other than the person appointed by the Director General of Supplies & Disposals as aforesaid should act as arbitrator and that, if for any reason that is not possible, the matter is not to be referred to Arbitration at all.
(iv) The arbitrator may from time to time with the consent of all the parties to the contract enlarge the time for making the award.
(v) Upon every and any such reference, the assessment of the costs incidental to the reference and award respectively shall be in the discretion of the arbitrator.
(vi) Subject as aforesaid, the Arbitration Act, 1940 and the rules there under and any statutory modification thereof for the time being in force shall be deemed to apply to the Arbitration proceedings under this clause.
(vii) If the valve of the claimant reference exceeds Rs. 1 lakh, the arbitrator shall give reasoned award.
(viii) The venue of arbitration shall be the place from which formal; Acceptance of Tender is issued or such other place as the Director General of Supplies & Disposals at his discretion may determine.
(ix) In this clause, the expression "the Director General of Supplies and Disposals" means the Director General of Supplies and Disposals for the time being and includes if there be no Director General of Supplies & Disposals or if Director General of Supplies & Disposals is on leave or is ab
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