IN THE HIGH COURT OF KERALA AT ERNAKULAM
SHAJI P. CHALY, J.
John P Vettichira, S/O. Varkey Pailee and Others – Petitioners
Versus
M/S. DLF Southern Towns Private Limited – Respondent
A.R. No.75 of 2017
Decided On : 13-10-2017
This application is filed under Section 11(6) of the Arbitration and Conciliation Act, 1996. Petitioners and the respondent have entered into Annexure A1 agreement in respect of construction of an apartment building. It is agreed by and between the parties as per clause 49 of Annexure A1 that, in the event of any dispute arising by and between the parties, same shall be resolved by resorting to the provisions of the Arbitration and Conciliation Act, 1996 and any modification made thereto, which read thus:
“49.DisputeResolutionbyArbitrations All or any disputes arising out of or relating to or concerning or touching this Agreement including the interpretation and validity of the terms thereof and the respective rights and obligations of the parties shall be referred to arbitration by any party. The arbitration shall be governed by the Arbitration & Conciliation Act, 1996 or any statutory amendments/modifications thereof for the time being in force. The arbitration proceedings shall be held at an appropriate location in Ernakulam by a Sole arbitrator who shall be appointed by the Managing Director of the Company and whose award shall be final and binding upon the parties. The Allottee hereby confirms that he/she/it shall have no objection to this appointment even if the person so appointed, as the sole Arbitrator, is an employee or advocate of the Company or is otherwise connected to the Company and the Allottee confirms that notwithstanding such relationship/connection, the Allottee shall have no doubts as to the independence or impartiality of the said sole Arbitrator. The Courts at Ernakulam alone and the Kerala High Court at Ernakulam shall have the jurisdiction.
2. Dispute arose by and between the parties and thereupon, Annexure A5 notice is issued by the petitioners seeking to resolve the dispute by appointing an independent and impartial arbitrator to resolve the dispute. However, no reply was issued by the respondent, which persuaded the petitioner to file this request.
3. A detailed counter affidavit is filed by the respondent disputing the claims and demands raised by the petitioner. However, from the tenor and terms of the contentions, it is categoric and clear, there is a serious dispute existing by and between the parties and it is to be resolved by resorting to the mechanism provided under Annexure A1 agreement.
4. By virtue of the introduction of the seventh schedule on and w.e.f. 23.10.2015, the arbitrator appointed as per clause 49 to resolve the dispute being an employee of the respondent is unable to act so. It was thereupon that, petitioners requested the respondent as per Annexure A5 to submit a panel of independent and impartial arbitrators to resolve the dispute. That being the situation and since there is a serious dispute pending by and between the parties, an independent arbitrator is to be appointed to resolve the dispute.
5. In that view of the matter, Sri. Anil Xavier, Advocate, Manimandir, 36/2412, Kaloor, Kochi -682017 is proposed to be appointed as Arbitrator to resolve the issue. To the said appointment, learned counsel for respondent raised a contention that already 20 arbitrations are being heard by the very same Advocate against the respondent establishment and therefore, the appointment is hit by schedules 5 and 7 of Act, 1996. However, I have come across the decision of the Apex Court in HRD Corporation (Marcus Oil and Chemical Division) v. Gail (India) Limited [2017(5) Arb. LR 1 (SC)] which held that, merely because an arbitrator is considering other matters of the same establishment, that will not be hit by the parameters provided under schedules 5 & 7. Paragraph 24 of the said judgment is relevant, which read thus:
“The arbitrator had aprior involvementin the dispute.”
24. On reading the aforesaid guideline and reading the heading which appears with Item 16, namely “Relationship of the arbitrator to the dispute”, it is obvious that the arbitrator has to have a previous involvement in the
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