IN THE HIGH COURT OF JUDICATURE AT ALLAHABAD
RAJNISH KUMAR, J.
Gepdec Infratech Limited Thru Authorized Representative – Appellant
Versus
U.P. Power Transmission Corporation Ltd. Thru Superintending Engineer Lucknow – Respondent
Civil misc. Arbitration application no.91 of 2023
Decided on : 28-02-2024
Arbitration - Appointment of Arbitrator - Arbitration and Conciliation Act, 1996, Section 11(6) - Section 12(5) - Section 8 - [Arbitration] - [Appointment of Arbitrator] - [Section 11(6), Section 12(5), Section 8] - The court appointed an arbitrator to settle a dispute between the parties under Section 11(6) of the Arbitration and Conciliation Act, 1996. The court considered the provisions of Section 12(5) and Section 8 of the Act, and the disclosure requirements for the prospective arbitrator, before making the appointment.
Fact of the Case:
The petitioner sought the appointment of a sole arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 for disputes arising from three separate agreements. The respondent raised objections to the single petition and the appointment of the proposed arbitrator.
Finding of the Court:
The court found that there was an arbitral dispute between the parties and appointed an arbitrator to settle the dispute. The court rejected the objections raised by the respondent regarding the appointment of the proposed arbitrator.
Issues: The issues involved the appointment of an arbitrator under Section 11(6) of the Act and the objections raised by the respondent regarding the proposed arbitrator's independence and impartiality.
Ratio Decidendi: The court's decision was based on the provisions of Section 11(6) and Section 12(5) of the Act, and the disclosure requirements for the prospective arbitrator. The court also considered the objections raised by the respondent and the relevant guidelines from previous cases.
Final Decision: The court appointed Hon'ble Mr. Justice V.C.Gupta as the arbitrator to settle the dispute between the parties and disposed of the application.
JUDGMENT :
1. Heard Sri Syed Tamjeed Ahmad, learned counsel for the applicant and Sri Puneet Chandra, learned counsel for the respondent.
2. This Court, by means of the order dated 07.02.2023, proposed the name of Hon'ble Mr. Justice V.C.Gupta(Former Judge of this Court) as Arbitrator to settle the dispute between the parties. The order dated 07.02.2023, on reproduction, reads as under:-
This Court has passed following order on 12.12.2023:-
"Heard Shri Syed Tamjeet Ahmad, learned counsel for the petitioner. Shri Puneet Chandra, learned counsel has accepted notice on behalf of the respondent.
The instant petition has been preferred under Section 11(6) of the Arbitration and Conciliation Act, 1996 for seeking appointment of a sole Arbitrator.
The submission of the learned counsel for the petitioner is that three separate agreements were entered between the parties. All the three agreements between the parties are dated 30.06.2017. Each of the agreement has an identical arbitration clause.
It is further urged that the first agreement relates to supply of equipment and material for construction of 400kV Sub Station at Jaunpur. The second agreement of the same date relates to the erection, testing, commissioning, operation and maintenance for two years of 400kV Sub Station at Jaunpur whereas the third agreement relates to civil works for construction of 400kV Sub Station at Jaunpur. Accordingly, it is submitted that all the three contracts are part of one composite project which was to be completed by the petitioner under the three separate heads.
It is further urged that during the course of subsistence of the agreements, certain disputes arose between the parties and the petitioner by means of its notice dated 27.09.2023 by making a reference to all the three contracts invoked the arbitration clause.
It is further submitted that as per Clause 38 of the agreement which contained an arbitration clause it provided that any dispute arose between the parties was to be referred to the Chairman of the respondent Corporation, however, in light of the provisions contained in Section 12(5) of the Act of 1996 duly amended in the year 2015 it is now not open for the respondent to either arbitrate or nominate an arbitrator.
In the given circumstances, the petitioner had requested the respondent to cooperate in an early constitution of Arbitral Tribunal, however, despite the notice dated 27.09.2023 having been served on the respondent, there was no response, hence, the petition.
Shri Puneet Chandra, learned counsel for the respondent on the other hand submitted that though he requires time to file his response as he wishes to raise a preliminary objection to the effect that since there are three separate agreements which have given rise to three separate cause of action, hence, one single petition raising the disputes as well as one composite notice dated 27.09.2023 both are not valid, apart from the fact that the agreements also provide for the jurisdiction at Allahabad.
Let the response be filed by the respondent within two weeks from today with an advance copy to the learned counsel for the petitioner, who if may so choose, may file his response within one week thereafter.
Since, the respondent Corporation is represented through its counsel, hence, no fresh notice is required.
List this matter on 12.01.2024. "
Learned counsel for the respondent, on the basis of instructions submits that respondent does not want to file any objection and since there is dispute, therefore, Arbitrator may be appointed.
Having considered the submissions of the learned counsel for the parties there appears to be some arbitral dispute between the parties and if the same is resolved through Arbitrator appointed by this Court in terms of Clause 25 of Section 8 of the agreement none of the parties are going to be prejudiced.
Accordingly the Court proposes to appoint
HRD Corporation (Marcus Oil and Chemical Division) Versus GAIL(India) Limited; (2018)12 SCC 471
The main legal point established in the judgment is the court's authority to appoint an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, and the considerations for ensuri....
Previous judicial involvement does not disqualify an arbitrator under the Arbitration and Conciliation Act, as long as independence and impartiality are maintained.
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....
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 court emphasized the necessity for impartiality in arbitration, ruling that automatic appointments of arbitrators undermined the arbitration clause, rendering the award invalid.
The court ruled that previous arbitration did not cover current disputes, allowing for a new arbitration reference, and that prior involvement of the arbitrator does not disqualify him under the Fift....
The court determined an arbitrator's jurisdiction depends on claims being notified by the General Manager; failure to do so limits arbitration eligibility.
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