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2011 Supreme(All) 462

[2011(3) ADJ 534 (LB)]
ALLAHABAD HIGH COURT
(Lucknow Bench)
BEFORE : F.I. REBELLO, C.J.
RAKESH JAIN .....Applicant
Versus
M/s. WELLWON BUILDERS (INDIA) PVT. LTD. ....Respondents
(Arbitration Application No. 14 of 2010, decided on 18th February, 2011)

Advocates:
Counsel :
Viplav Sharma and Nikhil Singh for the Applicant; A.P. Singh Gaur for the Respondents.

Headnote:Arbitration and Conciliation Act, 1996—Sections 11(6), 12 and 13—Appointment—Arbitrator—Cancellation of—Terms of agreement provide for arbitration in case of dispute arising out of contract—Once an arbitrator has been appointed in terms of the agreement, could not be removed unless legal misconduct fraud, disqualification etc. pleaded and proved—In present case the respondent No. 1 had named the arbitrator even before the applicant had invoked the arbitral clause—No merit in case—Application liable to be dismissed. [Paras 15, 16 and 17]

       

JUDGMENT

Hon’ble F.I. Rebello, C.J.—The applicant, by means of this application, seeks the following relief :

“Allow the present petition and appoint an independent arbitrator as per the provisions of Arbitration & Conciliation Act, 1996 and thereby, constitute arbitral tribunal for settlement of all disputes raised by the Applicant herein against the respondent from out of and/or touching upon and/or in relation to the 15 separate Agreements dated 20.8.2007 (Annexure A1 colly) between them for sale and purchase of 15 flats (namely, Flats Nos. F-G, F-2, F-4, E-1, E-2, E-3, E-4, G-1, G-2, G-3, G-4, A-1, A-2, A-3 and A-4 in its River Front Apartments Project at 70, Dalibagh Lucknow) and payments made there against by the Applicant...”

2. There is no dispute that in the agreement entered into between the applicant and the respondents, there is an arbitral clause, which is worded as under :

“32. All or any disputes arising out of or touching upon or in relation to the terms of this Agreement including the interpretation and validity of the terms thereof and the respective rights and obligations of the parties shall be settled amicably by mutual discussion failing which the same shall be settled through arbitration. The arbitration proceedings shall be governed by the Arbitration and Conciliation Act, 1996 or any statutory amendments/modifications thereof for the time being in force. The arbitration proceedings shall be held at Lucknow by a Sole Arbitrator who shall be the Legal Advisor of the Company. The Allottee hereby confirms that it shall have no objection to this Appointment. The High Court at Lucknow shall have the jurisdiction in all matters arising out of/touching or concerning this agreement regardless of the place of execution of this Agreement, which is deemed to be at Lucknow.”

3. The applicant, by means this application, is challenging the following words in the arbitral clause :

“... who shall be the Legal Advisor of the Company. The Allottee hereby confirms that it shall have no objection to this Appointment. ...”

4. The arbitration application was filed on 24.2.2010. According to the applicant, failure on the part of the respondents to comply with the various contents of the terms of the agreement has given rise to several disputes which have arisen from and/or touching upon and/or in relation to the arbitral agreements entered into between the applicant and the respondents. A legal notice dated 17.2.2010 came to be served on the respondents setting out, amongst others, that in the absence of settlement and/or compliance, the notice to be treated as an effective notice for commencement of arbitration under the agreements. It further stated that while disputing the nomination/appointment of the alleged Legal Advisor of the respondents as the sole Arbitrator on the ground that there exists sufficient circumstances to give rise to justifiable doubts as to his independence or impartiality and challenging the same by seeking its deletion under ‘blue pencil doctrine’ from a Competent Court, invokes the remaining provisions relating to arbitration as contained in Clause 32 of each respective Agreement.

5. The application as now filed, it is stated, has been filed under the provisions of Sections 11, 12 and 13 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Arbitration Act’).

6. A supplementary affidavit came to be filed on behalf of the applicant in which it has been set out that subsequent to the legal notices dated 17.2.2010 and 22.2.2010, counsel for the applicant received two e-mails both dated 23.2.2010 each containing, as an attachment, legal notice dated 23.2.2010 of the respondents which, inter alia, stated that Justice U.C. Srivastava (Retired) has been appointed as the sole Arbitrator after obtaining his consent. Thereafter, according to the applicant, two notices were received by couriers from the respondent Company, one containing the notice dated 23.2.2010 and another containing notice

















































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