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2002 Supreme(Gau) 276
GAUHATI HIGH COURT
P.P.Naolekar, P.G.Agarwal, JJ.
Oil and Natural Gas Corporation Ltd. -Appellant
Versus
Ambuja Cement Eastern Ltd. -Respondent
M.A.(F) No. 30 of l997 Civil Revn.No. 1 of 1997
Decided On : 21-06-2002
C.K.Sharma Barua, B.M.Choudhary, G.Baishya, N.Islam, D.K.Bhattacharyya
The power to appoint an arbitrator given to the Member of the Commission shall be read as the power to appoint given to the Chairman-cum-Managing Director of the Corporation under the contract.
Headnote:
Arbitration Agreement - Appointment of Arbitrator - Oil and Natural Gas Commission (Transfer of Undertaking and Repeal) Act, 1993 - Indian Arbitration Act, 1940 - Sibsagar (Assam) - [OPC] - [Arbitration Agreement, Oil and Natural Gas Commission (Transfer of Undertaking and Repeal) Act, 1993, Indian Arbitration Act, 1940] - The court discussed the appointment of the arbitrator by the Chairman-cum-Managing Director of the petitioner Company in consonance with the provisions of the Act, tender/contract and within the powers conferred on the Chairman-cum-Managing Director of the petitioner Company for appointment of the arbitrator. The court also interpreted the Oil and Natural Gas Commission (Transfer of Undertaking and Repeal) Act, 1993, and its implications on the arbitration proceedings, concluding that the power to appoint an arbitrator given to the Member of the Commission shall be read as the power to appoint given to the Chairman-cum-Managing Director of the Corporation under the contract.
Fact of the Case:
The petitioner, a company engaged in exploration and production of hydrocarbon, entered into a contract for the supply of ordinary portland cement (OPC) with the respondent. Disputes arose, and the matter was referred to an arbitrator appointed by the Chairman-cum-Managing Director of the petitioner Company. The respondent objected to the appointment and the validity of the arbitration proceedings.
Finding of the Court:
The court found that the appointment of the arbitrator by the Chairman-cum-Managing Director was in consonance with the provisions of the Act, tender/contract and within the powers conferred on the Chairman-cum-Managing Director of the petitioner Company for appointment of the arbitrator. The court also interpreted the Oil and Natural Gas Commission (Transfer of Undertaking and Repeal) Act, 1993, and its implications on the arbitration proceedings, concluding that the power to appoint an arbitrator given to the Member of the Commission shall be read as the power to appoint given to the Chairman-cum-Managing Director of the Corporation under the contract.
Issues: Validity of appointment of the arbitrator by the Chairman-cum-Managing Director of the petitioner Company instead of the members and the arbitrator's jurisdiction and power to proceed with the arbitration proceeding arising out of the contract/supply order dated 23rd/26th June, 1990.
Ratio Decidendi: The power to appoint an arbitrator given to the Member of the Commission shall be read as the power to appoint given to the Chairman-cum-Managing Director of the Corporation under the contract.
Final Decision: The appeal and the civil revision were allowed, and the impugned order restraining the petitioner and the proforma respondent from continuing with the arbitration proceeding was set aside. The arbitrator was directed to proceed with the arbitration referred to him under the letter of the Chairman-cum-Managing Director of the petitioner Company.
The appeal and the civil revision arise out of the same judgment and order dated 30.9.1996 passed by the Assistant District Judge, Sibsagar in Misc. (Arb) Case No. 49 of 1995, whereby the Assistant District Judge had granted injunction restraining the petitioner and the proforma respondent from embarking upon and continuing with the arbitration proceeding arising out of the contract/supply order dated 23/26-6-1990.
2. The petitioner is a company, which is carrying on the business of exploration and production of hydrocarbon and the Eastern Regional Business Centre of the Company is engaged in such activities in the North Eastern States. The petitioner prepares various drill sites at various places as per geological data for the purpose of drilling rigs for exploration of hydrocarbon. The petitioner required ordinary portland cement for various constructions at drilling sites. The petitioner for the purpose of procuring ordinary portland cement (OPC) invited open tender No. SBS/SP/TS/ ORD.Cement/RC/90-91 under single bid system from cement manufacturers only for the award of annual rate contract. The bidders were asked to quote tenders for the supply of OPC at the rate of 2000 M.T. per month at F.O.R., Sibsagar, price including all taxes, duties and transportation. The petitioner received ten offers from different agencies including the Modi Cement. Calcutta. The respondent vide their quotation No. MCL/CAL/( 186)/ 90-91 dated 21.5.90 offered for supply of 10,000 M. Tons of cement to the petitioner, which ultimately culminated in contract/ supply order SBS/SP/TS/ORD. Cement.RC/90-91 /TR-8/T-4/TR-164 dated 23/26.6.90. There was an arbitration agreement as Clause No. 15 in addendum to the tender documents forming part of the contract. The relevant clause of the Arbitration Agreement reads as under:-
"15. If any dispute, difference, question or disagreement shall, at any time, hereinafter arise between the parties he or the respective representatives or assign in contradiction with or arising out of the contract, or in respect of meaning of specifications, design, drawings, estimates, schedules, annexures, orders, instructions, the construction, interpretation of this agreement, application of provisions or anything hereunder contained or arising hereunder or as to rights, liabilities or duties of the said parties hereunder or any matter whatsoever incidental to this contract or otherwise concerning the works of execution of failure to execute the same whether during the progress of work or stipulated extended period or before or after the completion or abandonment thereof shall be referred to the sole arbitration of the person appointed by a Member of ONGC at the time of dispute. It will be no objection to any such appointment that the arbitrator so appointed is an employee of ONGC or that he had to deal with the matters to which the contract relates and that in the course of his duties as ONGC's employee, he had expressed views on all or any of the matter in dispute or difference.
If the arbitrator to whom the matter is originally referred dies or refuses to act or resigns for any reasons from the position of arbitrator, it shall be lawful for the Member of ONGC to appoint another person to act as arbitrator in the manner aforesaid. Such person shall be entitled to proceed with reference from the stage it was left by his predecessor, if both the parties consent to this effect failing which the arbitrator will be entitled to proceed de-novo.
It is a further form of this contract that no person other than the person appointed by a Member of the Commission as aforesaid shall act as arbitrator and that, if for any reason that is not possible, the matter is not to be referred to the arbitration at all.
The arbitrator(s), may from time to time, with the written consent of all the parties to the contract enlarge the time for making and publishing the award.
It is a term of the contract that the party invoking arbitration sh
