IN THE HIGH COURT OF DELHI AT NEW DELHI
Suresh Kumar Kait, J.
Vasavi Power Services Pvt. Ltd. - Appellant
Versus
Bharat Heavy Electricals Ltd. - Respondent
ARB.P. 544/2021
Decided On : 16-07-2021
Arbitration - Appointment of Sole Arbitrator - Disputes between Parties
Fact of the Case:
The petitioner, a MSME Company, sought the appointment of an Arbitrator under Section 11 of the Arbitration & Conciliation Act, 1996 to adjudicate disputes arising from an Agreement for a power plant project in Sudan.
Finding of the Court:
The court found that disputes had indeed arisen between the parties and could be settled through arbitration as per the Arbitration Agreement in the Contract.
Issues: The issues revolved around the delays and hindrances faced by the petitioner in executing the project, which were attributed to the respondent, and the respondent's denial of the petitioner's claims.
Ratio Decidendi: The court decided to appoint a Sole Arbitrator to adjudicate the disputes between the parties in accordance with the Arbitration Agreement, as provided in Clause 33 of the Contract and Section 11 of the Arbitration & Conciliation Act, 1996.
Final Decision: The court allowed the petition and appointed Justice Pradeep Nandrajog as the Sole Arbitrator to decide the disputes, with the fee to be governed by the Fourth Schedule of the Arbitration and Conciliation Act, 1996.
JUDGMENT
(Oral)
The hearing has been conducted through video conferencing.
1. The present petition is preferred by the petitioner under Section 11 of the Arbitration & Conciliation Act, 1996 seeking appointment of an Arbitrator in the present case for adjudicating the disputes between the parties.
2. The Petitioner is a MSME Company, who is said to have executed MEI (Mechanical, Electrical & Instrumentation) Erection Testing & Commissioning Projects for over 30 years across India, Middle East and Africa.
3. The crux of the case, as spelt out in the petition, is that on 26.11.2009, petitioner and respondent executed an Agreement for “erection, testing, commissioning, and trial operation of TG sets, ELECTRICAL, C & I and BOP packages for 4x125 MW Power Plant in Kosti, Sudan (Package-2/Contract Document No.646/2OO9)” and the total value of the work awarded was USO15,500,000 with the schedule commencement date as 24.11.2009 and the stipulated time period of completion was 21 months.
4. According to petitioner, it deployed/ engaged all resources like Engineers, Supervisors, etc. and also procured Tools & Plants, Shuttering Material, etc. which was required to execute and complete the work within the scheduled time. However, despite petitioner's diligent efforts to execute the work on time, the respondent kept on delaying the same and the petitioner faced various hindrances, attributable to the respondent.
5. On the other hand, respondent has denied the averments made on behalf of the petitioner stating that petitioner had filed a petition under Section 9 of the Act [OMP (I) (COMM) 72/2021] and by virtue of order dated 10.03.2021, the claims made by petitioner stand fully settled and discharged.
6. Pertinently, petitioner on 09.04.2021, sent a Notice under Clause 33 of the Contract No. 646/2009 dated 26.11.2009 r/w Section 11 of the Arbitration & Conciliation Act, 1996 for appointment of a sole Arbitrator.
7. At the hearing, learned counsel for petitioner submitted that various disputes have arisen between the parties and these disputes can be settled in terms of Arbitration Agreement between the parties, as contained in Clause 33 of Section 11 of Arbitration & Conciliation Act, 1996.
8. Though the aforesaid submission of petitioner’s counsel is disputed by counsel for respondent, however, he has not controverted that a quietus has to be given to the disputes between the parties by appointing an Arbitrator.
9. In view of the above, the present petition is allowed. Accordingly, Justice Pradeep Nandrajog, former Chief Justice of the High Court at Bombay (Mobile: 9818000130), is appointed as the Sole Arbitrator to adjudicate the disputes between the parties. All the issues raised by the parties shall remain open and shall be decided by the Arbitrator as per law.
10. The fee of the learned Arbitrator shall be governed by the Fourth Schedule of the Arbitration and Conciliation Act, 1996.
11. A copy of this order be sent to learned Arbitrator for information.
12. With aforesaid directions, the present petition is accordingly disposed of.
AI
The court affirmed the necessity of arbitration per the Arbitration Agreement to resolve disputes, allowing the appointment of an Arbitrator despite opposition from the parties.
Unilateral appointment of an arbitrator is impermissible; parties must appoint an arbitrator jointly or seek court appointment to ensure unbiased dispute resolution.
The court has the authority to appoint a sole Arbitrator in accordance with the Arbitration Clause forming a part of the Contract.
The court ruled that a Sole Arbitrator is to be appointed to resolve disputes under the contract due to the respondent's failure to meet contractual obligations.
Appointment of a sole arbitrator must comply with the provisions of the Arbitration and Conciliation Act, 1996 and should not be in violation of relevant legal precedents.
Arbitration Agreement - Appointment of - The learned Arbitrator shall ensure compliance of Section 12 of Arbitration and Conciliation Act, 1996 before commencing the arbitration.
The central legal point established in the judgment is the court's authority to appoint an arbitrator to resolve disputed claims between parties in accordance with Section 11(6) of the Arbitration an....
The court's power to appoint an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 and the arbitrability of disputes under the agreement's Clause 25.
Disputes arising under an agreement concerning construction are arbitrable, and a court may appoint an arbitrator as per the Arbitration and Conciliation Act, 1996.
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