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IN THE HIGH COURT OF DELHI AT NEW DELHI
VIBHU BAKHRU, J.
A.K. Builders – Appellant
Versus
Delhi State Industrial Infrastructure Development Corporation Ltd - Respondents
O.M.P. (T) (COMM.) 12 of 2022 and IA No. 1395 of 2022
Decided on : 25-02-2022
Arbitration and Conciliation Act, 1996 - Sections 12(5), 14, 15 and 21 - Letter of Award - General Conditions of Contract - Termination of mandate and substitution of arbitrator - Executing of work of “Construction of Halfway/Long Stay Home for Social Welfare Department-Tender - Praying that mandate of learned Arbitrator be terminated and another Arbitrator be appointed in his place - Contract value of said work was fixed amount and, it was stipulated that work would be completed within a period of sixteen months - Petitioner submitted its bid for said work and was awarded Contract for executing work in question by a Letter of Award - Stated that execution of the work was inordinately delayed - Petitioner claims that work was completed - Certain disputes have arisen between the parties in connection with the Contract in question and petitioner invoked the Arbitration Clause by a notice.
Finding of the Court :
A person who is ineligible to act as an arbitrator would also be ineligible to appoint an arbitrator. Thus, clearly, the Chief Engineer, DSIIDC was not empowered to appoint an Arbitrator in terms of Clause 25 of the GCC - The waiver under Section 12(5) of the A&C Act has to be by an express agreement in writing - Arbitrator was, in fact, appointed by the appellant who had then sought to challenge the same as being in violation of Section 12(5) of A&C Act - It is not necessary to dilate on the same as the said decision is indisputably not applicable to a petition under Section 14 of the A&C Act.
Result: Petition is allowed
JUDGMENT :
VIBHU BAKHRU, J.
[Hearing held through videoconferencing]
1. The petitioner has filed the present petition under Sections 14 and 15 of the Arbitration and Conciliation Act, 1996 (hereafter ‘the A&C Act’) praying that the mandate of the learned Arbitrator be terminated and another Arbitrator be appointed in his place.
2. The respondent (hereafter ‘DSIIDC’) had issued a Notice Inviting Tender (NIT) for executing the work of “Construction of Halfway/Long Stay Home for Social Welfare Department at Sector 22, Rohini, Delhi”.
3. The Contract value of the said work was fixed at Rs.4,70,35,632/- and, it was stipulated that the work would be completed within a period of sixteen months. The petitioner submitted its bid for the said work and was awarded the Contract for executing the work in question by a Letter of Award (hereafter “LoA”) dated 07.08.2012. It was stipulated that the work would be executed on or before 15.12.2013. It is stated that the execution of the work was inordinately delayed. The petitioner claims that the work was completed on 30.03.2015. The petitioner had raised a Final Bill and, it is stated that the same was cleared on 14.05.2019. Certain disputes have arisen between the parties in connection with the Contract in question and the petitioner invoked the Arbitration Clause by a notice dated 17.01.2020.
4. On 19.02.2020, the Chief Engineer, DSIIDC appointed Sh. D.S. Pandit, IAS (Retired) as a Sole Arbitrator to adjudicate the disputes between the parties. The Arbitral Tribunal held its first hearing on 13.03.2020. It is stated that several hearings have been held before the Arbitral Tribunal thereafter. DSIIDC states that the petitioner had participated in the arbitral proceedings without any reservation. However, the petitioner has now filed the present petition on 21.01.2022 seeking termination of the mandate of the learned Arbitrator on the ground that he is ineligible to act as an Arbitrator in view of the decisions of the Supreme Court in TRF Ltd. v. Energo Engineering Projects Ltd.: (2017) 8 SCC 377 and Perkins Eastman Architects DPC and Ors. v. HSCC (India) Limited: AIR 2020 SC 59 and, a decision of this Court in Proddatur Cable TV Digi Services v. Citi Cable Network Limited: (2020) 267 DLT 51.
5. Mr Datta, learned counsel appearing for DSIIDC drew the attention of this Court to the petitioner’s notice dated 17.01.2020 under Section 21 of the A&C Act. He pointed out that the petitioner had called upon the Chief Engineer of DSIIDC to appoint an Arbitrator in terms of Clause 25 of the General Conditions of Contract (GCC). He contended that the Arbitrator was appointed by the Chief Engineer, DSIIDC at the instance of the petitioner and it is not open for the petitioner to now question the same because the petitioner had participated in the arbitral proceedings for almost two years.
6. Mr Datta submitted that the decision of the Supreme Court in Bharat Broadband Network Limited v. United Telecoms Limited: (2019) 5 SCC 755 would not be applicable to the facts of the present case. He sought to distinguish the said decision on the ground that in that case the appellant had sought removal of the Arbitrator immediately after a decision was rendered in the case of TRF Ltd. v. Energo Engineering Projects Ltd. (supra). He submitted that in contrast to the same, the petitioner in this case had participated in the arbitral proceedings for a considerable period of time.
7. I have heard the learned counsel for the parties.
8. This Court is of the view that the decisions of the Supreme Court in TRF Ltd. v. Energo Engineering Projects Ltd. (supra) and Bharat Broadband Network Limited v. United Telecoms Limited (supra) squarely cover the controversy involved in this case.
9. The contention that the learned Arbitrator was appointed at the instance and consent of the petitioner, is not persuasive. A plain reading of the letter dated 19.02.2020, whereby the Chief Engineer, DSIIDC had appointed the learned Arbitrator, indicates
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