The court emphasized the importance of a broad-based panel of arbitrators, providing parties with a wider choice for nominating their arbitrator.

JUDGMENT :

1. The present petition has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 (‘Act’, for short) with the following prayers:

“Therefore, in the light of the facts and circumstances of the present case, and the submissions made in regard thereto, this Hon'ble Court may be pleased to:

a. Declare that Clause 17.9 of the GCC forming part of the said Contract, inasmuch as it provides for appointment of all three arbitrators from a panel of arbitrators proposed by the Respondent, is void and unenforceable;

b. Take the necessary measure and secure the constitution of an independent and impartial Arbitral Tribunal to adjudicate upon the claims of the Petitioner including inter alia by taking the following measures:

I. (a) Recognise the appointment of Justice M.M.S. Bedi (Retd,) as the nominee arbitrator on behalf of the Petitioner, (b) declare that the Respondent has forfeited all its rights to participate in the constitution of the Arbitral Tribunal, and consequently (c) appoint an arbitrator on behalf of the Respondent, which arbitrator along with Justice M.M.S. Bedi (Retd), shall mutually appoint the third (presiding) arbitrator;

II. In the alternative to (i) above, take such other steps or measures as may be necessary to secure the constitution of an independent and impartial Arbitral Tribunal to adjudicate the claims of the Petitioner,

c. Pass such other orders as this Hon'ble Court may deem fit in the interests of justice.”

2. The petitioner herein is a Consortium of Autometers Alliance Ltd. and Canny Elevators Co. Ltd. having its office at C-63, Sector 57, Noida (UP)- 201307. The respondent Nos.1,2 and 3 (‘Respondent/DMRC’, for short) are the Chief Electrical Engineer/Planning, Executive Director (Electrical) and Senior General Manager, Contracts of DMRC respectively.

3. It is the case of the petitioner and so contended by Mr. Anirudh Wadhwa, learned counsel appearing on its behalf that subsequent to issue of a Notice Inviting Tender in September 2012, for design, manufacturing, supply, installation, testing & commissioning of Escalators for Delhi MTRS Project Phase-III, the petitioner participated in the bidding process for the same. Being the successful bidder, Respondent issued a Letter of Acceptance dated April 16, 2013 in favour of the petitioner and thereafter entered into a contract being CE-4 Lot-2 dated May 25, 2013 (‘Contract’, for short).

4. It is submitted by Mr. Wadhwa that the Contract is still operational and the petitioner continues to fulfill its obligations under the same. It is also stated that the petitioner started rendering various services under the Contract and started raising invoices for the concerned services from January 2014.

5. According to him, the Respondent herein made regular and complete payments against the first six invoices raised by the petitioner towards rendering the services under the Contract for a period spanning from January 2014 to February 2015 against invoices bearing Nos.13141534, 14150809, 14151119, 14151120, 14151299 and RI/14-15/644.

6. Dispute and differences arose thereafter when Respondent started deducting certain amounts from the invoices raised from March 2015. It is the case of Mr. Wadhwa that on enquiry as to the reason for such deductions, vide a communication May 19, 2015, the Respondent raised objections against the petitioner for charging Service Tax on the services rendered under the Contract and sought details of the same and its deductions/payments against previous bills etc.

7. It is stated by Mr. Wadhwa that irrespective of various communications exchanged between the parties about the wrongful deductions made by the Respondent, the same was never resolved and approximately Rs.4.30 crores have been illegally withheld by the Respondent.

8. Aggrieved by the inaction in resolving the issue even after repeated follow-ups and the petitioner fulfilling its obligations, the petitioner was constrained to invoke the Conciliation Procedure as per th