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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Anil Kshetarpal, J.
Wonder Laminates Private Limited - Appellant
Versus
Rail Coach Factory, Kapurthala & Anr. - Respondent
Arbitration Case No. 106 of 2020, 107 of 2020
Decided On : 15-02-2021
Arbitration - Appointment of Sole Arbitrator - Arbitration & Conciliation Act, 1996 - 2.21 - Summary of Acts and Sections: The court discussed the provisions of Clause 2.21.1 of the Arbitration & Conciliation Act, 1996, as amended by the Arbitration and Conciliation (Amendment) Act, 2015. The court highlighted the qualifications for appointment as a Sole Arbitrator, the procedure for appointment, the cost of arbitration, and the venue of arbitration. The court also referred to judgments by the Supreme Court in TRF Limited v. Energo Engineering Projects Limited and Perkins Eastman Architects DPC and Another v. H.S.C.C. (India) Limited, and analyzed their impact on the appointment of the Arbitrator.
Fact of the Case:
The petitioner, a manufacturer and supplier of laminates, supplied HPL sheets to the respondents. Disputes arose regarding the conformity of the supplied material to the specifications, leading to a request for the appointment of a sole Arbitrator.
Finding of the Court:
The court found that the appointment of the Arbitrator by the respondents was in accordance with the arbitration agreement. It also noted that pre-arbitration meetings were not mandatory for the appointment of the sole Arbitrator. The court concluded that it was required to nominate a sole Arbitrator to decide the disputes and differences between the parties.
Issues: The issues involved the appointment of a sole Arbitrator, adherence to the arbitration agreement, and the effect of the failure to conduct joint inspection of the supplied material.
Ratio Decidendi: The court held that the appointment of the Arbitrator by the respondents was valid, pre-arbitration meetings were not mandatory, and the disputes should be decided by a sole Arbitrator appointed by the court.
Final Decision: The court allowed both petitions and nominated Honb'ble Mrs. Justice Rekha Mittal, Former Judge of the Court, as the Sole Arbitrator to decide the disputes and differences between the parties. It also provided directions for communication, disclosure, appearance before the Arbitrator, interim applications, fees, sharing of costs, venue and seat of arbitration, and kept all contentions open.
JUDGMENT
Anil Kshetarpal, J. - By this order, two petitions under Section 11(6) of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as "the 1996 Act"), arising between the same parties with respect to identical disputes, shall stand decided. Learned counsel for the parties have also submitted that these two petitions can be disposed of by a common order.
2. The agreements containing arbitration clause are not in dispute.
"2.21.Arbitration Clause:
2.21.1(a)(i) In the event of any dispute or difference of opinion between the Rail Coach Factory administration and Contractor(s) as to respective right and obligation of the parties hereunder or of onus to the true intent and meaning of these present and of any articles of conditions thereof such dispute of difference of opinion (except the matter regarding which the decision has been specifically provided for in the terms of the contract) shall be referred to the sole arbitration. Arbitrator shall be a person possessing qualification aid down in Para 2.21.1(a)(ii) and shall be appointed by the General Manager in the case of contracts entered into by Rail Coach Factory, Kapurthala.
2.21.1(a)(ii) Qualification for appointment as Sole Arbitrator:
(a) Retired Railway Officer not below SAG level 3 years after his date of retirement.
(b) Age of Arbitrator at the time of appointment shall not exceed 70 years.
2.21.1(a)(iii) An Arbitrator may be appointed notwithstanding the total no. of arbitration cases in which he has been appointed in the past. Retire Railway officer being appointed as arbitrator, however, will not be one of those who had an opportunity to deal with the matters to which the contract relates or who in the course of their duties as railway servant have expressed views on all or any of the matters under dispute or difference.
2.21.1(a)(iv)The award of the Arbitrator shall be final and binding on the parties to this contract.
2.21.1(b) In the event of the Arbitrator dying, neglecting or refusing to act or resigning or being unable to act for any reason, or his award being set aside by the court for any reason, it shall be lawful for the authority appointing the arbitrator to appoint another arbitrator in place of the outgoing arbitrator ion the manner aforesaid.
2.21.1(c) It is further a term of this contract that no person other than the person appointed by the authority as aforesaid should act as Arbitrator and that if for any reason that is not possible, the matter is not to be referred to arbitration at all.
2.21.1(d)(i) The cost of arbitration shall be borne by the concerned parties in terms of section 31(A) of Arbitration and Conciliation Act, 1996, as amended by Arbitration and Conciliation (Amendment) Act, 2015. The cost shall inter-alia include fee payable to the Arbitrator would be governed by instruction issued on the subject by Railway Board from time to time irrespective of the fact whether the Arbitrator is appointed by the Railway administration under this clause or by any court of law unless specifically directed by Hon'ble court otherwise on the matter.
2.21.1(d)(ii) Arbitrator shall be entitled to 50 percent extra fee, if award is made within 6 months in terms of provision contained in section 29(A) (2) of the Arbitration and Conciliation Act, 1996 as amended by Arbitration and Conciliation (Amendment) Act, 2015. Besides above, Arbitrator shall also be entitled for this extra fee, in cases, where Fast Track Procedure in terms of section 29(B) of the Arbitration and Conciliation (Amendment) Act, 2015 is followed.
2.21.1(e) Subject as aforesaid, the Arbitration and Conciliation (Amendment) Act, 2015 and the fulrs there under and any statutory modifications thereof for the time being in force shall be deemed to apply to the arbitration proceedings under this clause.
2.21.1(f) The venue of arbitration shall be the place from which the acceptance note is
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