IN THE HIGH COURT OF ALLAHABAD
SURYA PRAKASH KESARWANI, JAYANT BANERJI, JJ.
Bundelkhand University Jhansi – Appellant
Versus
M/s Woodfun – Respondent
Appeal Under Section 37 of Arbitration and Conciliation Act 1996 Defective No. 73 of 2021
Decided On : 04-07-2022
Arbitration - Modernization, Interior, Electrical Work - Arbitration and Conciliation Act, 1996, Section 37 - 27.05.2004 - 34 - 11(6) - The court upheld the Arbitrator's finding that the respondent-claimant was entitled to payment for extra work executed, rejecting the appellant-University's argument that the arbitration award was against public policy. The court also found that the appointment of the Arbitrator was in accordance with the agreement and the parties' conduct, dismissing the appellant-University's claim that no other Arbitrator could have been appointed under Section 11(6) of the Act, 1996.
JUDGMENT :
1. This is an arbitration appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (for short 'Act, 1996') challenging the judgment dated 21.08.2021 passed by the Commercial Court, Jhansi in Arbitration Misc. Case No. 3 of 2017 under Section 34 of the Act, 1996.
2. Briefly stated facts of the present case are that the appellant-herein invited tenders for the work of Modernization, Interior, Electrical and other allied work at Auditorium, Convention Centre and at Conference Room in the Bundelkhand University, Jhansi. The contract was awarded to the respondent-claimant and an agreement dated 27.05.2004 was entered into between the parties. The agreement provides for additional work also. As per agreement, the schedule of rates were made part of the agreement. Copy of agreement has been appended as Annexure-1 to the appeal. The agreement contains an arbitration clause. Since, despite notice of the claimant-respondent, the appellant-University could not appoint any Arbitrator, therefore, the claimant filed an application under Section 11(6) of the Act, 1996 and the Arbitrator was appointed by the High Court. Before the Arbitrator, the claimant filed his claim and the appellant herein also filed their objections/written statement. The Arbitrator passed the award dated 04.02.2017 being Arbitration Case No. 1 of 2015 (M/s Woodfun vs. Bundelkhand University, Jhansi). Against the award, the appellant herein filed an application being Misc. Case No. 3 of 2017 before the Commercial Court, under Section 34 of the Act, 1996 which was rejected by the impugned judgment dated 21.08.2021. Aggrieved with this judgment, the appellant herein has filed the present appeal under Section 37 of the Act, 1996.
SUBMISSIONS
3. Learned counsel for the appellant-University submits as under:
(ii) the arbitration clause contained in the agreement provides that the Vice-Chancellor of the University shall be the Arbitrator, therefore, no other Arbitrator could have been appointed under Section 11(6) of the Act, 1996.
4. Learned counsel for the respondent-claimant submits as under:
(ii) since as per agreement, additional work was to be carried out and it was infact ordered to be carried out by the appellant herein, therefore, non-payment for additional work by the appellant herein to the claimant was a dispute arising out of the agreement.
Consequently, the claimant has requested the appellant herein to appoint the Arbitrator to resolve the dispute. Since Arbitrator was not appointed despite written request, therefore, the claimant-respondent moved an application before the High Court under Section 11(6) of the Act, 1996 and in that proceeding, a retired Hon'ble Judge of the High Court was appointed as Arbitrator who passed the impugned arbitral award after following due process of law.
(iii) the scope of interference with the award under Section 34 of the Act, 1996 is limited.
(iv) the learned Judge, Commercial Court has lawfully passed the impugned judgment which does not suffer from any infirmity.
Analysis
5. The scope of appeal under Section 37 of the Act, 1996 is limited to examination of the matter, that whether the appellant was able to make out a case before the commercial court to entitle it to the benefit of the provisions of Section 34 of the Act, 1996.
6. As far as the first argument advanced on behalf of the appellant-University that since the additional work don
The main legal point established in the judgment is that the competency of the arbitrator and the proper notice in the arbitration proceedings are crucial for the validity of the arbitration award.
The Ld. Arbitrator's jurisdiction, the applicability of Clause 16(2) of the Agreement, and the sufficiency of reasons provided in the award were the main legal points established in the judgment.
Appointment of arbitrator by designation is permissible. Arbitration clauses in government contracts providing that an employee of the department will be the sole arbitrator are neither void nor unen....
The court emphasized that arbitral awards should not be interfered with solely based on disagreements with findings, affirming the limited grounds for appeal under Section 34 of the Arbitration Act.
The appointment of a sole arbitrator deviated from the statutory requirements and terms of the arbitration agreement, making proceedings invalid under the Arbitration and Conciliation Act, 1996.
The main legal point established in the judgment is that the appointment of an arbitrator must be in accordance with the law, and if found to be invalid, the court has the jurisdiction to set it asid....
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