IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL
Raghvendra Singh Chauhan, J.
Virendra Singh Rawat - Appellant
Versus
Cantonment Board - Respondent
Arbitration Application No. 19 of 2020
Decided On : 06-08-2021
Arbitration Application - Appointment of Sole Arbitrator - Section 11(6) of the Arbitration and Conciliation Act, 1996 - Section 12(5) of the Act
Fact of the Case:
The applicant, a contractor, undertook government contracts for supplying material/goods. The respondent, Cantonment Board, invited tenders for road repair and maintenance. Despite completing the work, the applicant did not receive payments for the work orders, leading to disputes and a request for the appointment of a sole Arbitrator.
Finding of the Court:
The court found that the respondent did not appoint the requested Arbitrator within the stipulated time, and there was no 'express agreement in writing' to waive the bar contained in Section 12(5) of the Act. Therefore, the court appointed a retired judge as the sole Arbitrator to resolve the disputes.
Issues: Dispute over non-payment for completed work, appointment of sole Arbitrator, and waiver of the bar contained in Section 12(5) of the Act.
Ratio Decidendi: The court held that the respondent's silence and failure to appoint the requested Arbitrator within the specified time indicated a rejection of the request, and there was no 'express agreement in writing' to waive the bar contained in Section 12(5) of the Act.
Final Decision: The court appointed a retired judge as the sole Arbitrator to resolve the disputes.
JUDGMENT
Raghvendra Singh Chauhan, C.J. - The present Arbitration Application has been filed under Section 11(6) the Arbitration and Conciliation Act, 1996 (''the Act' for short), for appointment of the sole Arbitrator.
2. According to the learned counsel for the applicant, the applicant is the contractor who undertakes government contracts for supplying material/goods in relation to contracts entered with the Government and the Semi-Government Organization.
3. The respondent, the Cantonment Board, had invited tenders for "repair and maintenance of roads" in the year 2016. Consequently, the applicant had submitted his rates for the work on 15.11.2016. By order dated 30.03.2017, the said tender was accepted by the respondent. Therefore, the work order contract was issued on 06.04.2017.
4. According to the work order contract, it was agreed that the respondent shall make payments within the time stipulated under the agreement. Moreover, the respondent was under the duty to clear all the bills of the applicant within 18 days' after which the amounts had become due.
5. According to the applicant, despite the fact that the work order was completed with utmost satisfaction, no payments were received by the applicant in relation to the for work orders, which are as under:-
S. No. | Work Order | Amount/Valu e (in INR) | Amount of Bill (in INR) | Date of Bill |
1. | Repairs of cement concrete road leading from back side Janta Hotel to Veterinary Dr. Residence (20th June, 2017) | 56,70,300/- | 58,96,982.28/- | - |
2. | Repairs of cement concrete road near Jubli Qtrs. To Kailana | 8,78,6008/- | 9,52,523.86/- | 25.10.2018 |
3. | Repairs of Jeep Road Dehradun Road to House No.80, Cantt. PGL (5th March, 2018) | 19,98,500/- | 21,56,875.88/- | 28.06.2018 |
4. | Repairs of Road providing interlocking leading from Jubli Quarters to 5- Vikas R.P. Post Kailana (20th January, 2019) | 12,03,000/- | 13,49,326.51/- | 27.10.2018 |
5. | Estimate for providing chequered tile at Jadu Ghar (05.03.2018) | 4,50,500/- | 3,19,450.08/- | 25.06.2018 |
Total Amounts of Works | 1,02,00,900/ - | 1,06,75,158.61/- | ||
6. Therefore, according to the learned counsel for the applicant, the respondent owes Rs.1,06,75,158.61/- along with the GST.
7. Since the respondent was not heeding to the request of the applicant, on 17.06.2020 the applicant sent a legal notice requesting the respondent to both clear the outstanding bills and, since disputes had arisen between the parties to appoint the sole Arbitrator, 'the Garrison Engineer'.
8. According to Clause 19 of the Agreement, the parties had agreed that, in case disputes were to arise, 'the Garrison Engineer' shall be appointed as the sole Arbitrator.
9. In the letter dated 17.06.2020, the applicant had clearly stated that the Garrison Engineer shall be appointed within a period of thirty days from the date of the letter.
10. According to the learned counsel for the applicant, letter dated 17.06.2020 was replied by the respondent on 14.08.2020. However, in the letter dated 14.08.2020, the respondent maintained a study silence with regard to the appointment of the sole Arbitrator. In the letter dated 14.08.2020, the respondent merely directed the applicant to submit further documents including photographs of the construction work carried out by the applicant. There was no whisper about the appointment of an Arbitrator.
11. Since, even after making a request for appointment of an Arbitrator, and due to laxity on the part of the respondent in appointing the Arbitrator, left with no other option, the applicant filed the present Arbitration Application under Section 11(6) of the Act.
12. The respondent has filed its counter-affidavit. According to Mr. B.S. Adhikari, the learned counsel for the respondent, on 15.10.2020, the respondent has appointed 'the Garrison Engineer' as the sole Arbitrator. The learned counsel for the respondent submits that, although, it is true that Section 12(5) of the Act, does contain a bar which prevents the appointment of any person whose relationship is with the parti
The court emphasized the importance of 'express agreement in writing' to waive the bar contained in Section 12(5) of the Act and held that failure to appoint the requested Arbitrator within the speci....
The main legal point established in the judgment is that the waiver of the bar under Section 12(5) of the Act requires an express agreement in writing, and in the absence of such agreement, the court....
The court emphasized the importance of adhering to the agreed arbitration process and the necessity of an express agreement in writing to waive the bar contained in Section 12(5) of the Act.
Point of law: As per the legal position settled by the Supreme Court in catena of judgments, the High Court has the jurisdiction under Section 11(6) of the said Act to nullify the appointments made b....
The limitation period for seeking the appointment of an arbitrator begins only after a valid notice invoking arbitration is issued, and failure to appoint forfeits the right to do so.
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 appointment of an arbitrator must comply with the Arbitration and Conciliation Act, particularly Section 12(5), which disqualifies certain individuals from serving as arbitrators.
Whatever advantage a party may derive by nominating an arbitrator of its choice would get counter balanced by equal power with the other party. But, in a case where only one party has a right to appo....
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