Back
IN THE HIGH COURT OF ORISSA : CUTTACK
K.S. JHAVERI, J.
M/s. Technofab Engineering Limited - Appellant
Versus
M/s. National Aluminium Company Ltd - Opposite Party
ARBP No.90 of 2017
Decided on : 01-03-2019
For the Petitioner:Shri Debasish Moitra, Advocate with K. Khuntia and A.P. Das, Advocates
For the Opposite Party :Shri R.K.Rath, J.P. Behera and N.R. Rout, Advocates
The second arbitration is not permissible when the application under Section 16(2) of the Act is appealable. The court cannot appoint another Arbitrator when the first Arbitrator has declined jurisdiction.
Headnote:
Arbitration - Application under Section 11 of the Arbitration and Conciliation Act, 1996 - Clause-21, Clause-87 - Summary of Acts and Sections
Fact of the Case:
The petitioner submitted a bid and entered into a Contract with the opposite party. Dispute arose between the parties, leading to arbitration clauses under Clause-21 and Clause-87 of the Contract being invoked. The Arbitrator passed an order under Section 16(2) of the Act, which was challenged by the petitioner. The petitioner sought appointment of another Arbitrator for resolution of the dispute.
Finding of the Court:
The court held that the second arbitration is not permissible as the application under Section 16(2) of the Act is appealable under Section 37(2)(a) of the Arbitration and Conciliation Act, 1996. The court rejected the application for appointment of another Arbitrator.
Issues: 1. Whether the second arbitration is permissible after the application under Section 16(2) of the Act? 2. Whether the court can appoint another Arbitrator when the first Arbitrator has declined jurisdiction?
Ratio Decidendi: The court found that the second arbitration is not permissible as the application under Section 16(2) of the Act is appealable. The court held that it is not appropriate to appoint another Arbitrator when the first Arbitrator has declined jurisdiction.
Final Decision: The application for appointment of another Arbitrator was rejected by the court.
JUDGMENT :
K.S. JHAVERI, J.
By way of this application under Section 11 of the Arbitration and Conciliation Act, 1996, the petitioner has prayed for the following reliefs:
“(i) Constitute an independent and impartial Arbitral Tribunal to adjudicate upon the aforesaid dispute between the parties;
(ii) Pass such other or further order/s as this Hon’ble Court may deem fit and proper be also passed in favour of the appellant and against the Opp. Party ”
2. Learned counsel for the petitioner has contended that pursuant to the tender floated by the opposite party, the petitioner submitted its bid and the same having been found to be lowest, the opposite party has entered into a Contract with the petitioner and the petitioner had been issued with Work Order No.CPP/CNT/TCE.5905A-H-574-002/W.O./2011/507, dated 12.02.2011 and Supply Order No. CPP/CNT/TCE.5905A-H-574-002/S.O./2011/508, dated 12.02.2011 for “33kv Switchyard & Transmission Line of Ash Disposal to Mines Void in Lean Slurry Mode”.
3. Under the Contract, there are two clauses for arbitration. One is Clause-87 of the General Conditions of Contract (for short ‘GCC’) and another is Clause-21 of the Special Conditions of Contract (for short ‘SCC’), under Annexure-2, which read as follows:
“87. Arbitration:
All disputes or differences whatsoever which shall at any time arise between the parties hereto touching or concerning the works or the execution or maintenance thereof of the contract or the rights touching or concerning the works or the execution or maintenance thereof of this contract or the construction meaning operation or effect thereof or to the rights or liabilities of the parties or arising out of or in relation thereto whether during or after completion of the contract or whether before or after determination, foreclosure or breach of the contract (other than those in respect of which the decision of any person is by the contract expressed to be final and binding shall after written notice by either party to the contract to the other of them and to the Appointing Authority hereinafter mentioned be referred for adjudication to a sole Arbitrator to be appointed as hereinafter provided.”.
(The clause 87 further provides for the procedure for appointment of a sole arbitrator and the procedure to be adopted by the arbitrator for adjudication.)
21. Dispute Resolution
Expeditious amicable resolution should be the first effort of dealing executives of two parties. However, in the event that the dispute stays, the first step would be to refer issues to a duly authorized senior executive from each of the two companies for them to come with a resolution within 30 (thirty) days. In case it is still not resolved then arbitration as per Indian Arbitration & Resolution Act 1996 shall become applicable.”
4. Learned counsel for the petitioner contended that the dispute having arose between the parties, letter was issued by the petitioner to the Chairman & Managing Director (NALCO) on 17.11.2015 (Annexure-3). The relevant portion of the said letter reads as under:
“xxx. The contract consist of two dispute resolution clauses and Technofab Engineering Ltd is of one view whereas NALCO is of different view and accordingly dispute between the parties further crystallized. The extract of some of the correspondences on the issue of dispute resolution are recorded herein under so that your honour is appraised of facts pertaining to different stands taken by Technofab Engineering Ltd & NALCO.
xxx”
5. Learned counsel for the petitioner in support of his contention also draws attention of this Court to point nos. 2, 3 and last but two paragraphs of the said letter dated 17.11.2015. The relevant portion of the said points, to which learned counsel for the petitioner referred to, read as under:
“2. As against above communication stated herein above at serial no.1, NALCO took a different stand interalia that they appointed Shri K.K. Panda as the Senior Executive for the purpose of amicable settlement under the foll
