2020 Supreme(Ker) 668
IN THE HIGH COURT OF KERALA AT ERNAKULAM
P.V. ASHA, J.
M/s VA Tech Wabag Ltd. – Petitioner
Versus
M/s. Travancore Titanium Products Ltd. – Respondent
W.P. (C) No. 17537 of 2020
Decided On : 29-09-2020
Important Points
The Arbitrator is appointed by the MD of respondent- Going by the judgment of the Apex Court in TRF case, Perkin Eastman case etc., such an appointment is not permissible after the amendment Act 3 of 2016 and insertion of 7th schedule. I have also in the judgment in Aculife Healthcare vs. Kerala Medical Services Corporation, 2019 KHC 28 : ILR 2019 (2) Ker 208 held that such an appointment is not permissible after the amendment.
Subject
Arbitration Law - Jurisdiction and Appointment of Arbitrator
Act Referred
CONSTITUTION OF INDIA : Art.226
Headnote
Constitution of India- Article 226;; The Arbitration and Conciliation Act, 1996- Sections 12 and 13-Appointing authority-Capacity of the Chairman and Managing Director and that is as an appointing authority- Public Sector Undertaking would not have any relevance when it cannot be disputed that the arbitration clause is part of the commercial contract entered into between the parties-The Arbitrator is appointed by the MD of respondent-Such an appointment is not permissible after the amendment Act 3 of 2016 and insertion of 7th schedule
Statement of facts:
The petitioner is a Water Treatment Company- In the year 2017, disputes arose between the parties in respect of damage caused to the Silo in the nuetralisation plant installed by the petitioner-Petitioner alleged improper operation of the plant by the respondent. Invoking Arbitration clause in Clause 6.24 the respondent appointed sole Arbitrator, who passed Ext.P3 award on 04.12.2019, against which petitioner has filed an appeal which is pending- The petitioner thereupon sent Ext.P6 reply stating that as per Article 11 of Ext.P1 agreement, a party to the dispute has to approach the Indian Council of Arbitration to get an Arbitrator appointed. It was also stated that the dispute raised was already covered by Ext.P3 award, which cannot be raised again. This writ petition was filed after the sole Arbitrator appointed by the respondent issued Ext.P7 notice informing the first sitting on 22.08.2020
Finding of the court:
The question whether the parties have acted in accordance with the provisions of the Arbitration and Conciliation Act as amended, or the very clause under which the Arbitrator is appointed, can be invoked after the amendment brought about to the 1996 Act, or the dictum laid down by the Apex court in Perkins Eastman Architechs DPC and Others vs. HSCC (India) Ltd. Case and TRF Ltd. vs. Energo Eng. Products Ltd. (2017) 8 SCC 377 case etc. can be considered by the Arbitrator and not by this Court in a Writ Petition under Article 226 of the Constitution of India
Result: Writ Petition is dismissed.
Advocate Appeared:
For the Petitioner: Sri. S. Ganesh, Sri. P.S. Sidhan, Sri. K.N. Satheesan, Sri. P. Sreekumar.
For the Respondent: Smt. Latha Anand.
JUDGMENT :
P.V. ASHA, J.
1. The issue arising in this case is whether this Court has jurisdiction to entertain a writ petition to interpret the terms of agreement between the petitioner and respondent in respect of resorting to Arbitration to resolve the dispute between the parties and to interfere with the appointment of sole Arbitrator. Admittedly, there are two provisions in the agreement relating to Arbitration - one in Article 11 of the agreement and another one in Clause 6.24 of the General Conditions of Contract in the general conditions of contract (Ext.P2), which is part of the agreement. According to the petitioner, as per Article 11 of Ext.P1, appointment of Arbitrator is to be done by Indian Council of Arbitration on request by the parties; whereas respondent has appointed sole Arbitrator invoking Clause 6.24 of the general conditions of contract, according to which, MD can appoint sole Arbitrator. It is the contention of the petitioner that there is ambiguity in Clause 6.24 in so far as it is not made clear which MD would appoint when Managing Directors (I) MD of petitioner (2) MD of respondent and (3) MD of M/s MECCON Ltd. the consultancy of the respondent. Secondly both are conflicting provisions. Respondent appointed Sole Arbitrator. According to petitioner, the question raised by petitioner is not one which can be determined by the Arbitrator. It is also pointed out that though the petitioner had raised this claim in the earlier Arbitration proceedings which resulted in Ext.P3 award, the contention was rejected in paragraph 36 of the award on the ground that it was not raised at the initial stage. Therefore, when the respondent again invoked the Arbitration clause and appointed the very same Arbitrator, the petitioner has approached this Court as soon as notice was received from Arbitrator. It is stated that petitioner had raised this issue before the respondent when they received Ext.P5 notice dated 04.07.2020, in Ext.P6 reply dated 10.07.2020. Petitioner has another contention that the dispute raised in the present proceedings is already considered in the earlier proceedings covered by Ext.P3 Award.
2. The contention of the respondent is that a writ petition is not maintainable under Article 226 of the Constitution of India as the petitioner seeks interpretation of the terms of a purely commercial contract entered into between the parties; there is no public element involved in a commercial contract; the fact that the respondent is a Public Sector Undertaking would not make the writ petition maintainable in the absence of a statutory contract between the parties; interpretation of terms of the contract entered between the parties is not permissible; any intervention by this court would defeat the very purpose and the object behind the enactment of Arbitration and Conciliation Act; a writ petition is not liable to be entertained merely for the absence of a remedy for the petitioner. Arbitration and Conciliation Act is a self contained Code where the petitioner can raise his contentions. Question of res-judicata cannot also be adjudicated by this Court.
3. The brief facts leading to the case are the following: The petitioner is a Water Treatment Company. The respondent through its consultancy M/s MECCON Ltd. another Public Limited Company, invited tenders for implementing ‘effluent treatment plant’ in its plant. Being the lowest bidder, the petitioner was awarded the work. Ext.P1 agreement dated 25.04.2006 was entered into between M/s MECON Ltd. on behalf of the respondent and the petitioner for setting up 6 MLD Neutralisation Plants with water recovery module at the plant of the respondent. In the year 2017, disputes arose between the parties in respect of damage caused to the Silo in the nuetralisation plant installed by the petitioner. While the respondent alleged improper installation by the petitioner, petitioner alleged improper operation of the plant by the respondent. Invoking Arbitration clause in Clause