The court clarified the applicability of section 12(5) of the Act of 1996 and emphasized the need for expeditious disposal of arbitration matters.

JUDGMENT : – This appeal has been preferred under section 37 of the Arbitration Conciliation Act, 1996 (hereinafter referred as the Act of 1996) by the claimant-appellant against the order dated 15-3-2022, passed by the Additional District Judge, Commercial Court, Indore in MJC AV No. 1300059/2016 whereby the application filed by the appellant under section 34 of the Act of 1996 has been rejected holding that no case for interference is made out.

2. In brief, the facts of the case are that the respondent No. 1 had invited a tender in respect of construction of Neemuch Administrative Block and Dormitory and wherein the appellant’s tender was accepted and an agreement was also executed between the parties in this regard on 10-8-2001. It is an admitted fact that the aforesaid agreement also contained an arbitration clause for settlement of the dispute between the parties and as a dispute arose regarding the claim of the appellant to the tune of Rs. 63,74,637/- to which the respondent No. 1 did not claim and The Arbitrator who has partly awarded the claim to the tune of Rs. 5,85,551/- along with interest.

3. Shri Vijay Assudani, learned counsel appearing for the appellant, at the outset, has submitted that the appellant is assailing the order dated 15-3-2022 only on the ground available under section 12(5) of the Act of 1996, as there was a unilateral appointment of the Arbitrator, since the Arbitrator was appointed by the respondent’s Chief Engineer, Central Public Works Department in-Charge of the work and, thus, the same is barred by the decision rendered by the Supreme Court in the case of Perkins Eastman Architects DPC and others vs. HSCC (India) Limited, reported as (2019) SCC OnLine SC 1517.

4. Counsel for the appellant has also relied upon the decision rendered by the Supreme Court in the case of Bharat Broadband Network Limited vs. United Telecoms Limited, reported as (2019) 5 SCC 755 as also a decision rendered by the Delhi High Court in the case of A. K. Builders vs. Delhi State Industrial Infrastructure Development Corporation Ltd., O.M.P. (T) (COMM.) 12/2022 and I. A. No. 1395/2022. Thus, it is submitted that the appointment of Arbitrator in the present case, Shri K. K. Varma, a retired Additional Director General of Central Public Works Department, was contrary to the provisions of section 12(5) of the Act of 1996 as it was void ab initio and as such the impugned Award is liable to be set aside and the parties may be allowed to initiate a fresh arbitration proceedings.

5. Shri Himanshu Joshi, learned counsel appearing for the respondent, on the other hand, has opposed the prayer and it is submitted that no case for interference is made out, as the Arbitrator was appointed at the request of the appellant itself and at this juncture, when the Award was passed by the Arbitrator way back on 28-1-2009, and the aforesaid ground which was not even raised by the appellant in their application filed under section 34 of the Act of 1996 before the lower Court, cannot be allowed to be agitated for the first time before this Court in the appeal under section 37 of the Act of 1996.

6. Heard the learned counsel for the parties and also perused the record, as also the documents filed by the appellant.

7. From perusal of the record, this Court finds that as per the general conditions of the contract of the Central Public Works Department Works, Clause 25 of the same provides for settlement of disputes and arbitration, it provides that the Arbitrator can be appointed by the Chief Engineer, CPWD in charge of the work or where there is no Chief Engineer, the administrative head of the said PCWD. It is also found that the Arbitrator was appointed at the request of the appellant vide its application dated 8-3-2006, and subsequently, the Arbitrator was appointed on 3-1-2007. Shri K. K. Verma was appointed as the Arbitrator to adjudicate upon the dispute between the parties, who has passed his final Award on 28-1-2009. The aforesaid Award w