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P. NAVEEN RAO, NAGESH BHEEMAPAKA
Engineering Projects (India) Limited – Appellant
Versus
KMV Prasad Rao (Contractor) – Respondent
JUDGMENT :
P. NAVEEN RAO, J.
1. The first appellant is a Government of India Enterprise engaged in executing Civil, Mechanical, Infrastructure Development etc. works. The 2nd appellant is its Managing Director. The 1st respondent is a Company dealing in construction of civil works.
2. First appellant was awarded contract by M/s. Singareni Collieries Company Limited (SCCL) to execute Part-I (RG-I Area) for construction of quarters with Civil, Electrical, Plumbing and all other required accessories on back to back basis and also works pertaining to RG-II Area on back to back basis as per designs and drawings provided by SCCL. Appellant appointed 1st respondent as subcontractor to execute the RG-I area work. The work was awarded on 15.02.2005 with a completion period of 18 months. Later it was also entrusted with RG-II works.
3. While appellants allege that 1st respondent delayed completion of work, the 1st respondent alleges that 1st appellant was responsible for delay in executing the work. According to 1st respondent, the work was completed in May, 2007 and the defect liability period expired in May, 2008. First respondent alleges that he was subjected to several impediments and delays
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....
Arbitrators must be impartial and capable of performing their duties; prolonged inaction in arbitration proceedings justifies termination of their mandate.
An arbitrator's mandate can be terminated when they fail to act without undue delay; new appointments must ensure impartiality as per updated legal standards.
The appointment of an arbitrator must comply with Section 12(5) of the Arbitration & Conciliation Act, ensuring independence and impartiality, regardless of when the arbitration proceedings were init....
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 established that an arbitrator appointed by an ineligible individual cannot act, and waivers of objections regarding ineligibility must be expressed in writing, not inferred by conduct.
An arbitrator appointed by a party with vested interests is legally invalid under the Arbitration and Conciliation Act, 1996.
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....
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