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RAJASTHAN HIGH COURT BENCH AT JAIPUR
Indrajit Mahanty, CJ.
Tata Power Ajmer Distribution Limited - Appellant
Versus
Ajmer Vidyut Vitran Nigam Limited - Respondent
S.B. Arbitration Application No. 5/2021
Decided On : 17-09-2021
Arbitration - Dispute Resolution - Arbitration and Conciliation Act, 1996 - Sections 11(4), 11(6) - The court emphasized the obligation of parties to adhere to the dispute resolution process outlined in their agreement, highlighting the failure of the respondent to act within stipulated timelines, thus justifying the appointment of an arbitrator.
Fact of the Case:
The applicant filed for the appointment of an arbitrator under the Arbitration and Conciliation Act, 1996 after the respondent failed to resolve disputes through the agreed multi-tier dispute resolution process outlined in their contract.
Finding of the Court:
The court found that the respondent's inaction in constituting and utilizing the dispute resolution bodies as per the agreement justified the applicant's request for arbitration, as the timelines for resolution were not adhered to.
Issues: Whether the applicant was entitled to seek the appointment of an arbitrator due to the respondent's failure to act within the timelines set forth in their dispute resolution agreement.
Ratio Decidendi: The court held that the failure of the respondent to convene meetings and resolve disputes within the agreed timelines constituted a breach of the arbitration agreement, warranting the appointment of an arbitrator.
Result: The court directed the appointment of an arbitrator as requested by the applicant.
JUDGMENT
1. Heard learned counsel for the respective parties.
2. The present application has come to be filed by the applicant namely Tata Power Ajmer Distribution Limited under Section 11(4) read with 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter to be referred as 'Act of 1996') for appointment of an arbitrator.
3. Bereft of any unnecessary facts, suffice it to record herein that the applicant-TPADL had entered into an agreement with the respondents on 19.04.2017. In terms of the said agreement, in event of any dispute, the parties had agreed to three tier process of resolution of dispute and the same is recorded in Clause 18.2.2, 18.2.3, 18.2.4, 18.2.5 & 18.2.6 at page 75 of the agreement which are quoted hereunder:-
(i) Counter-claim and defences if any regarding the Dispute; and
(ii) All documentary evidence in support of its defences and counter-claim.
18.2.3 Both the parties shall constitute a permanent dispute resolution body having equal representation from each of the parties. The disputes or differences arising under this Agreement shall be referred for resolution to this body, which shall communicate its decision within Thirty (30) days.
18.2.4 In case of non-settlement of dispute by the permanent dispute resolution body, such disputes or differences shall be referred for decision to a body constituted by Chairman/ Managing Director of the Distribution Licensee and Head, Distribution Franchisee which shall communicate its decision preferably within a period of fifteen (15) days.
18.2.5 Any dispute arising out of, in connection with or with respect to this Agreement, the subject matter hereof, the performance or non-performance of any obligation hereunder, which cannot be resolved by negotiation between the Parties and the Dispute Resolution procedure as stated in the foregoing Clauses, shall be initiated to be settled through arbitration at the request of either party upon written notice to that effect to the other party. The proceedings shall be conducted subject to the provisions of the Arbitration and Conciliation Act, 1996 (the Arbitration Act) by a panel consisting of three arbitrators.
18.2.6 While submitting the dispute or difference for arbitration with this Clause the Party so submitting shall, in its notice, specify the name of one arbitrator appointed by it. Within thirty (30) days of the receipt of notice, the other Party shall appoint an arbitrator. The third arbitrator (who will act as the Presiding Arbitrator) shall be nominated by the two arbitrators appointed as aforesaid or, failing such nomination within thirty (30) days of appointment of the second arbitrator, shall be appointed in accordance with the Arbitration and Conciliation Act, 1996."
4. It is asserted by the learned counsel for the applicant that in terms of the Clause 18.2.3, a request was made by them on 03.09.2019 under Annexure-2 requesting for constitution of the Permanent Dispute Resolution Body (PDRB) as per Clause 18.2.3 of their agreement. It appears that the said request of the applicant was accepted by respondent- Ajmer Vidyut Vitran Nigam Limited (AVVNL). The respondent-AVVNL constituted the necessary first level body by its communication dated 18.11.2019 vide Annexure-4. Inspite of constitution of such a committee as constituted under Clause 18.2.3, it appears that committee did not hold a single meeting and on 04.02.2020, under Annexure-3, reminder was sent by the applicant to the respondent-Company detailing the facts and the claims contained therein and requesting for its early conclusion of its first level resolution at the earliest under cover of its letter dated 04.02.2020 under Annexure-3.
5. It appears that since there no steps were taken by the constituted body i.e. PDRB, the applicant made a further request that due to inaction on the part of the first level committee i.e. PDRB made a furth
An application for appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 is maintainable despite previous delays, as no arbitral proceedings were initiated un....
The main legal point established is that disputes falling within the scope of an arbitration clause in an agreement should be referred to arbitration, and the Grievance Redressal Forum is not a subst....
The main legal principle established in the judgment is the court's authority to appoint an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 when a dispute arises and no arbi....
Strict enforcement of arbitration agreement and the law does not permit either party to act as an arbitrator or appoint the arbitrator to arbitrate on the disputes.
The court clarified that a previous dismissal of an application for appointment of an Arbitrator does not preclude the applicant from seeking appointment through the correct authority, and hypertechn....
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 Conciliatio....
The main legal point established is the applicability of Section 11(6) of the Arbitration and Conciliation Act, 1996, in cases where a party fails to appoint an arbitrator within the stipulated time ....
The court affirmed the appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996, for disputes arising from an uncontested License Agreement.
The appointment of the nominee arbitrator of the respondent is in accordance with law, and any reference of the claims from Arbitral Tribunal-2 to Arbitral Tribunal-1 without terminating the mandate ....
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