Failure to appoint an arbitrator within the agreed timeframe under Arbitration Agreement allows the court to intervene and appoint an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996.

JUDGMENT (Oral)

(Video-Conferencing)

1. This is a petition under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "1996 Act"), to refer certain disputes, which have arisen between the petitioner and the respondent, to arbitration.

2. Having heard Mr. Rajeev Sharma, learned counsel for the petitioner and Mr. Prashant Mehta, learned counsel for the respondent at length, I proceed to dispose of the present petition, the issue in the petition being limited.

3. Consequent to a letter of award, dated 30th November, 2011, a contract, for constructing underground link tunnel between the All India Institute of Medical Sciences (AIIMS) and the Jai Prakash Narayan Apex Trauma Centre, was awarded to the petitioner by the respondent.

4. The Agreement provided for resolution of disputes between the parties, initially, by conciliation and thereafter, on failure of conciliatory process, by arbitration. Clause 17.9 of the Agreement, which provided for arbitration, reads thus:

"17.9. If the efforts to resolve all or any of the disputes through conciliation fails, then such disputes or differences, whatsoever arising between the parties, arising out of touching or relating to construction/manufacture, measuring operation or effect of the Contract or the breach thereof shall be referred to Arbitration in accordance with the following provisions.

(a) Matters to be arbitrated upon shall be referred to a sole Arbitrator if the total value of the claims is upto Rs.5 million and to a panel of three Arbitrators if total value of claims is more than Rs.5 million. The Employer shall provide a panel of three arbitrators which may also include DMRC officers for the claims upto Rs.5 million and a panel of five Arbitrators which may also include DMRC officers for claims of more than Rs.5 million. The Contractor shall have to choose the sole Arbitrator from the panel of three and/or one Arbitrator from the panel of five in case three Arbitrators are to be appointed. The Employer shall also chose one Arbitrator from this panel of five and the two so chosen will choose the third arbitrator from the panel only. The Arbitrator(s) shall be appointed within a period of 30 days from the date of receipt of written notice/demand of appointment of Arbitrator from either party. Neither party shall be limited in the proceedings before such arbitrators) to the evidence of arguments put before the Engineer for the purpose of obtaining his decision. No decision given by the Engineer in accordance with the foregoing provisions shall disqualify him from being called as a witness and giving evidence before the arbitrator(s) on any matter, whatsoever, relevant to dispute or difference referred to arbitrator/s. The arbitration proceedings shall be held in Delhi only. The language of proceedings, that of documents and communication shall be English.

(b) The Employer at the time of offering the panel of Arbitrator(s) to be appointed as Arbitrator shall also supply the information with regard to the qualifications of the said Arbitrator nominated in the panel along with their professional experience, phone nos. and addresses to the contractor.

(c) The award of the sole Arbitrator or the award by majority of three Arbitrators as the case may be shall be binding on all parties."

(Emphasis supplied)

5. According to the petitioner, failure, on the part of the respondent, to fulfil certain obligations, cast on it under the aforesaid contract, resulted in prejudice to the petitioner and delay in completion of the contract. The petitioner issued a notice of demand, to the respondent, on 23rd May, 2018, raising several demands, for being recompensed itself for losses suffered by the petitioner owing to alleged default on the part of the respondent.

6. The communication also put the respondent on notice that in the event of default on the part of the respondent, to pay the alleged outstanding differences of the petitioner within 28 days,