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2023 Supreme(Guj) 976

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SUNITA AGARWAL, J.
Sitson India Pvt. Ltd – Petitioner
Versus
Kaveri Vibhag Sahakari Khand Udhyog Mandali Limited – Respondent
R/Petn. Under Arbitration Act No. 36 Of 2022 with R/Petn. Under Arbitration Act No. 37 Of 2022 with R/Petn. Under Arbitration Act No. 38 Of 2022
Decided On : 04-08-2023

Advocates Appeared:
For the Petitioner: Ms. M. O. Narsinghani, Mr. Yatin Soni.
For the Respondent: Yashashvi Y. Soni.

Headnote:

Arbitration and Conciliation Act, 1996 – Section 11, 12(5) – Appointment of Arbitrator – Draft amendments – Seeks appointment of sole Arbitrator to adjudicate – Held, Court finds some substance in contentions of respondent to extent that petitioner has waived applicability of sub-section (5) of Section 12 willingly by an express agreement in writing, by signing agreements-in-question containing clause 13 and by their subsequent conduct – Court does not find any good ground to sustain challenge to competence of Director (Sugar), Government of Gujarat to be appointed as an Arbitrator in accordance with Clause 13 of agreements-in-question – Parties have not been able to reach at a consensus on appointment of Arbitrator, case would fall under sub-section (5) of Section 11 for appointment of Arbitrator by this Court – Director (Sugar), Government of Gujarat, as per Clause 13 of the agreements-in-question, is hereby appointed as an Arbitrator to resolve the disputes between the parties – Arbitration Petitions Disposed of.

JUDGMENT :

1. Learned advocate appearing for the petitioner press the draft amendments dated 15.06.2023 in all the petitions. There is no objection to the same by the learned counsel for the respondent. Hence, Draft Amendment is allowed. The amended paragraphs and the prayers made therein are treated as part of the main petitions.

2. As three petitions connected herewith are between the same parties, though they are arising out of different agreements, but raise a common question of law and, as such, they have been heard together and are being decided together by this common judgment.

3. Heard Ms. M.O. Narsinghani, learned counsel appearing for the petitioner and Mr. Yatin Soni, learned counsel for the respondent in all the petitions.

4. By means of these petitions filed under section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act, 1996’ for short), the petitioner herein seeks appointment of sole Arbitrator to adjudicate the dispute and differences that have arisen between the parties as per Clause 13 of the Agreements entered into between the petitioner and respondent herein. In reply to the original petition, in the affidavit filed on behalf of respondent, they have agreed for appointment of Arbitrator under Section 11 of the Act, 1996 as per the terms and conditions of the contracts/agreements as prayed therein, however, by draft amendment dated 15.06.2023, under the order passed by this Court, the prayer made in the original petition has been amended as under : -

“18(aa). Your Lordship may be pleased to appoint any retired High Court Judge as an arbitrator in order to complete the constitution of the arbitral tribunal to adjudicate the disputes and differences between the parties arising out of the Agreement dated 28th February, 2017.”

5. Pressing the stand taken by the petitioner in the amended writ petitions, it is submitted by the learned counsel appearing for the petitioner that Clause 13 of the agreements-in-question is hit by Section 12(5) of the Act, 1996 as the Director (Sugar), Government of Gujarat is ineligible to be appointed as an Arbitrator being an officer falling in the category of Clause 12 of the Seventh Schedule of the Act, 1996. For ready reference, Clause 13, which is common to all the three agreements in question herein, is reproduced as under : -

"Clause 13: Arbitration

If at any time any question dispute or difference whatsoever shall arise between the mills and E.C or any person claiming under them upon or in relation to or in connection with this agreement accept as to matters the decision for which has been specifically provided, either party may forthwith give to the other notice in writing of the existence of such question, dispute or difference and the same shall be referred to the arbitration of Sole arbitrator namely Director (Sugar), Govt. of Gujarat.

The award of the Sole Arbitrator shall be final and binding on the parties. This submission shall deemed to be submission to arbitration within the meaning of the Arbitration and Conciliation Act 1996 and the rules made thereunder or any statutory modifications or re-enactment thereof for the time being inforce.

The Arbitrator may from time to time with the consent of the parties enlarge the time for making and publishing the award work under the agreement shall, unless the arbitrator otherwise directs, continue during the Arbitration proceedings.”

6. The Court may also note sub-section (5) of Section 12 and Clause 12 of the Seventh Schedule to the Act, 1996 as under : -

“12. Grounds for challenge –

1 to 4 – xxxxx

(5) Notwithstanding any prior agreement to the contrary, any person whose relationship, with the parties or counsel or the subject-matter of the dispute, falls under any of the categories specified in the Seventh Schedule shall be ineligible to be appointed as an arbitrator:

Provided that parties may, subsequent to disputes having arisen between them, waive the applicability of this sub-section by an express

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