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IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL
Raghvendra Singh Chauhan, J.
Harjinder Pal Singh - Appellant
Versus
Cantonment Board - Respondent
Arbitration Application No. 20 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) - The Act - Summary of Acts and Sections: Section 11(6), Section 12(5) - The court discussed the provisions of Section 12(5) of the Act, which creates a bar on the appointment of an arbitrator in certain relationships, and the exception to this bar through an express agreement in writing. The court found that there was no express agreement in writing to waive the bar, and therefore, the respondent's appointment of the arbitrator was not justified. The court appointed a retired judge as the sole arbitrator to resolve the disputes between the parties.
Fact of the Case:
The applicant, a contractor, filed an Arbitration Application under Section 11(6) of the Act for the appointment of a sole arbitrator due to non-payment by the respondent for completed work orders. The respondent had appointed 'the Garrison Engineer' as the sole arbitrator, claiming waiver of the bar under Section 12(5) of the Act.
Finding of the Court:
The court found that there was no express agreement in writing to waive the bar contained in Section 12(5) of the Act, and the respondent's appointment of the arbitrator was not justified. The court appointed a retired judge as the sole arbitrator to resolve the disputes between the parties.
Issues: Appointment of Sole Arbitrator, Waiver of Bar under Section 12(5) of the Act
Ratio Decidendi: The court held that there was no express agreement in writing to waive the bar contained in Section 12(5) of the Act, and therefore, the respondent's appointment of the arbitrator was not justified. The court exercised its power under Section 11(6) of the Act to appoint a retired judge as the sole arbitrator.
Final Decision: The court appointed Mr. B.C. Kandpal, Retd. Judge, High Court of Uttarakhand, as the sole arbitrator to resolve the disputes between the parties.
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 four 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 to door window glazing of Cantt. Quarter No.4 (2nd June, 2017) | 34,319/- | 34,319.43/- | 25.06.2018 |
2. | Public Group Latrine Double Compartment in Cantt. Area 6 nos. (17th November, 2017) | 3,71,755/- | 3,71,755.57/- | |
3. | Construction of vacation room & extension of playground at Cantt. Inter College, Chakrata (19th September, 2017) | 11,49,019/- | 11,49,019/- | |
4. | Repairs to Ceiling Gate and Mile Steel Grill of Cantt. Qtr. No.18 (5th March, 2018) | 65,262/- | 65,262.48/- | 25.06.2018 |
Amount Payable | 16,20,355/- | 16,20,356.48/- | ||
6. The applicant has also done work under the Work Orders in relation to the Guest House, Chilmiri to the satisfaction of the respondent. However, no payments were received by the applicant in relation to the said work orders. Therefore, according to the learned counsel for the applicant, the respondent owes Rs.84,78,552/- 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 appointmen
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