IMPORTANT POINT
The main legal point established is that the appointment procedure for arbitrators must be broad-based and meet the requirement of counterbalancing as per the arbitration agreement.

JUDGMENT

Dinesh Kumar Sharma, J.

1. The present petition has been filed under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (Act).

2. In brief the facts are that the petitioner has sought an appointment of a Sole Arbitrator for adjudication of the inter se disputes arising out of clause 4.6 of letter of Acceptance (LOA) No.RailTel/ Tender/OT /ER/HQ/2015-2016 /898/392 dated 20.06.2016.

SUBMISSIONS OF PETITIONER

3. The petitioner submits that the disputes arose between the parties in relation to the works performed and payments to be made under the contract. The notice invoking arbitration dated 13.03.2023 was duly served. The petitioner submitted that the respondent vide e-mail dated 27.03.2023 and 01.04.2023 did not object to the fact that a dispute has arisen between the parties which is covered under Clause 4.64 of the Contract and is in principle agreeable for the appointment of a tribunal to arbitrate the disputes. It has been submitted that however, the parties have failed to appoint the arbitrator in terms of the Contract and in compliance of the amended terms of the Act as the respondent has insisted that a sole arbitrator will be appointed by CMD/RailTel out of the panel of arbitrators of the respondent. The petitioner submitted that the CMD/respondent has an interest in the dispute or in the outcome or decision thereof, and therefore is not only ineligible to act as an arbitrator, but is also ineligible to act as the appointing authority.

4. The respondent in its counter affidavit submitted that the RailTel Corporation of India Ltd. has its own broad panel list of arbitrators due to the technical requirement/aspect of the dispute involved in PSU/RailTel. The respondent submitted that the petitioner has not followed the required procedure mentioned in the Arbitral Clause in the Contract Agreement. Along with the affidavit, the list of the arbitrators prepared by the RailTel was also filed. The respondent relied upon the judgment of Supreme Court in Voestalpine Schienen Gmbh V. Delhi Metro Rail Corporation Limited 2017 4 SCC 665 and Central Organisation for Railway Electrification (in short `CORE') v. ECI- SPIC-SMO-MCML (JV) 2020 14 SCC 712 and Rajnish Kumar Rai v. Union of India & ors, and submitted that in view of the judgment of the Supreme Court in CORE (Supra), the petitioner has authority to appoint the arbitrator.

5. Learned counsel for the petitioner submitted that in view of the judgment of the Supreme Court in Perkins Eastman Architects DPC & Anr. v. HSCC (India) Limited 2019 SCC OnLine SC 1517, the unilateral appointment of the arbitrator is not permissible under the law.

SUBMISSIONS OF RESPONDENT

6. Learned counsel for the respondent submitted that the broad panel of arbitrators has been made by the competent authority due to technical requirements/aspects of the dispute involved in PSU/Railtech. It was further submitted that the petitioner was given the opportunity to choose the arbitrator from the broad panel and hence the appointment of the arbitrator cannot be stated to be biased.

7. Learned counsel has submitted that when the agreement specifically provides for the appointment of an arbitral tribunal consisting of Arbitrators from out of Panel, the appointment of Arbitrators should be in terms of the agreement as agreed by the parties. To buttress his arguments, the learned counsel has placed reliance upon Central Organisation for Railway Electrification vs. ECI-SPIC-SMO- MCML(JV) 2020 14 SCC 712.

8. Learned counsel for the respondent submitted that in the case of Government of Haryana vs. GF Toll road Pvt., the Supreme Court held that the 5th schedule & seventh schedule of 2015 do not bar past employees from being an arbitrator.

ANALYSIS AND FINDINGS

9. Before proceeding further, it is relevant to advert to the relevant clauses 4.6.4.3 of the agreement of GCC.

10. The bare perusal of clause 4.6.4.3 indicates that if the dispute is up to Rs.10,00,000/-, a sole arbitrator shall be appointed by the Ma