The court's decision emphasized the importance of giving parties a fair opportunity to present their claims in arbitration proceedings, despite initial procedural challenges.

RAJIV SHAKDHER, J.

I.A. No. 13112/2018

1. This is an application seeking condonation of delay in filing the rejoinder.

2. For the reasons given in the application, the delay is condoned.

3. The application is disposed of.

O.M.P.(MISC.)(COMM.) 4/2018

4. This petition has been filed under Section 29A(4) of the Arbitration and Conciliation Act, 1996 (in short ‘1996 Act’). The respondent in this matter resists the extension of time sought by the petitioner.

5. The extension of the time sought by the petitioner in this particular matter has somewhat peculiar background.

6. The petitioner and the respondent had entered into a contract dated 02.02.2015 (in short “contract”).

7. By virtue of this contract, the respondent was to provide security and manpower services to the petitioner. The tenure of the contract was 24 months.

8. Inter alia, under the contract, the respondent was obliged to make payments to its personnel at the minimum wages prescribed in that behalf. In addition thereto, the respondent was also required to ensure that the personnel engaged were paid EPF and ESI. In sum, the respondent was responsible for ensuring compliance with all labour laws.

9. It appears that the petitioner received complaints from the personnel engaged by the respondent with regard to non-payment of salaries and personnel being made to work overtime.

10. Consequent thereto, an inquiry was held by the petitioner which, according to it, lent credence to the allegations levelled against the respondent. As a result of this development, on 22.04.2016, the petitioner terminated the contract.

11. Since the respondent had furnished a bank guarantee to the petitioner and it was apprehended by it that same would be encashed, the respondent took a decision to file a petition under Section 9 of the 1996 Act, albeit, before the Additional District Judge in Rohini Court, Delhi. This petition was filed by the respondent in and about 26.04.2016.

12. I am informed by counsel for the parties that an injunction was granted by the learned ADJ vis-a-vis encashment of the bank guarantee which was vacated by this Court upon the petitioner carrying the matter by way of appeal to this Court.

13. It is however important to note that the learned ADJ vide its order dated 27.04.2016 had directed the petitioner to initiate the process of appointment of an arbitrator.

14. Consequent thereto, on 06.05.2016, the petitioner appointed, one, Mrs. Janak Juneja, a retired IAS officer as an Arbitrator.

15. Evidently, on account of allegations raised by the respondent, Mrs. Janak Juneja decided to withdraw from the arbitration proceedings. This was conveyed by Mrs. Janak Juneja vide a communication dated 14.09.2016.

16. As a result of the aforesaid circumstance, the petitioner proceeded to appoint another arbitrator, that is, one, Mr. Ramesh Narayanaswami. Mr. Ramesh Narayanaswami is also a retired IAS officer.

17. Both these aforesaid appointments were made by the petitioner in terms of Article 58 of the contract obtaining between the parties.

18. The record shows that the respondent had filed even before the appointment of the Mr. Ramesh Narayanaswami a petition under Section 11 of the 1996 Act for appointment of an independent Arbitrator. This petition came to be numbered as Arb. Petition No. 277/2016. The petition was disposed of by this Court vide judgment dated 20.10.2016.

18.1 The Court after noticing the objection of the respondent came to the conclusion that since the petitioner’s Managing Director had been given the authority to appoint an Arbitrator and there was nothing on record to show that he was not independent, the relief sought in the petition could not be granted.

18.2 However, an observation was made by the Court, which is, that the learned Arbitrator would have to adhere to the mandate of the section 12 of the 1996 Act.

19. The net effect of the judgment passed by this Court was that Mr. Ramesh Narayanaswami’s appointment was sustained.

20. The learned Arbitrator, thereafter, h