Point of Law: High Court’s exercise of jurisdiction under Article 227 of the Constitution, and setting aside of the order of the Tribunal.

JUDGMENT :

1. These 24 petitions under Article 227 of the Constitution of India have been filed by the Union of India [hereinafter, “the Union”] in respect of identical orders dated 19.02.2021 passed by a sole Arbitrator in 24 different arbitration proceedings. The Union has, in the alternative, sought a direction upon the Arbitrator to consider the applications filed by it for recall of the impugned orders.

2. All the proceedings were filed by the Union against the respondent-Delhi State Consumers Co-operative Federation Limited [hereinafter, “DSCCFL”]. By the impugned orders, the Arbitrator has terminated the proceedings under Section 25(a) of the Arbitration and Conciliation Act, 1996 [hereinafter, “the Act”].

A. Facts

3. The 24 arbitral proceedings arise in substantially similar circumstances. In response to four different tender enquiries floated by the Union, DSCCFL offered to supply various qualities of pulses [dal] for the use of defence personnel. According to the Union, DSCCFL failed to furnish the requisite security deposit, as a result of which each of the contracts were cancelled at the risk and cost of the respondent. The Union sought to claim consequential damages. A chart showing the details of each contract and the damages claimed by the Union has been placed on record, but it is not necessary to reproduce the same here, as the facts relating to the underlying dispute between the parties are not relevant to the adjudication of the issue raised in these petitions.

4. What is relevant for the present purposes is that each of the contracts contains an identical arbitration clause, which is in the following terms:-

“15 I. ARBITRATION CLAUSE:

(a) In the event of any question, dispute or difference arising under or out of or in connection with the conditions mentioned in this schedule or in annexure thereto or in General Conditions of contract governing contracts placed by the Central Purchase Organisation of the Government of India. (Now under Department. Of Supply.) Form No. DGS&D-68 (Revised) or touching or concerning the construction, meaning or operation or effect thereof/or of any matter contained therein or as to the rights, duties or liabilities of the parties in connection with this contract (Except as to any matters the decision of which is specially provided for in the conditions mentioned in the schedule or in annexure thereto or in General Conditions of Contract as aforesaid), the same shall be referred the Sole Arbitration of any person appointed by the Additional Secretary to Government of India, Ministry or Department of Government of India administratively dealing with the contact at the time of such appointment, or if there is no Additional Secretary or he is one leave or is absent from duty or is not available for any reason whatsoever the Joint Secretary dealing with the contract of such Ministry or Department at the time of such appointment. It will be no objection to any such appointment that the person appointed is a Government Servant.

(b) In the event of the arbitrator dying, neglecting or refusing to act or resigning or being unable to act for any reasons or his award being set aside by the court for any reason, it shall be lawful for the said Additional Secretary or the Joint Secretary, as the case may be, to appoint an arbitrator in the place of the outgoing arbitrator in the manner aforesaid and the person so appointed will proceed with the references from the stage at which it was left by his predecessor. It is also a term of this contract that no person, other than a person appointed by the Additional Secretary or the Joint Secretary of the Ministry or Department as aforesaid shall act as Arbitrator and if for any reason that is not possible the matter shall not be referred to arbitration at all.

(c) Subject as aforesaid the Arbitration and conciliation Act, 1996 and the Rules thereunder and any statutory modification thereof for the time being in force shall apply to the arbitration proceeding