NEUTRAL CITATION NUMBER- 2023:DHC:1956

O.M.P.(COMM) 519/2019

Page 1 of 14

$~8

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IN THE HIGH COURT OF DELHI AT NEW DELHI

Date of Decision: 17^th March, 2023

+

O.M.P. (COMM) 519/2019 & I.As. 17587/2019, 2186/2023

M/S ECO RECYCLING LTD

..... Petitioner

Through:

Mr. Rajeeve Mehra, Senior

Advocate with Mr. Arvind

Sharma, Mr. Madhu Kant Jha,

Advocates.

versus

NATIONAL RESEARCH DEVELOPMENT CORPORATION

& ANR.

..... Respondents

Through:

Mr. J.M. Kalia (Enrolment No.

D/46/1985,

Mobile

No.

9810325510), Mr. Dhruv Kalia,

Mr. Siddharth Shukla, Mr.

Paras Machanda, Advocates.

CORAM:

HON’BLE MR. JUSTICE PRATEEK JALAN

PRATEEK JALAN, J. (ORAL)

%

1.

By way of the present petition under Section 34 of the

Arbitration and Conciliation Act, 1996 [hereinafter, “the Act”], the

petitioner assails an award dated 22.08.2019 rendered by a sole

arbitrator in a dispute between the respondents herein (who were the

claimants before the learned arbitrator) and the petitioner (who was

the respondent therein).

Digitally Signed By:SHITU

NAGPAL

Signing Date:20.03.2023

18:21:54

Signature Not Verified

NEUTRAL CITATION NUMBER- 2023:DHC:1956

O.M.P.(COMM) 519/2019

Page 2 of 14

2.

The first ground raised in support of the petition by Mr. Rajeeve

Mehra, learned Senior Counsel for the petitioner, is that the arbitral

proceedings were void ab-initio as the learned arbitrator was

unilaterally appointed by the Secretary, Department of Legal Affairs,

Government of India, who was himself ineligible to act as the

arbitrator.

3.

I have heard Mr. Mehra and Mr. J.M. Kalia, learned counsel for

the respondents on this issue.

4.

Respondent No.1, National Research Development Corporation

[hereinafter, “NRDC”] is an enterprise of the Department of Scientific

and Industrial Research, Government in India [“hereinafter, “DSIR”],

which is arrayed as respondent No.2. The arbitration proceedings

arose out of a Tripartite Agreement dated 23.11.2010 [hereinafter, “the

Agreement”] by which the respondents agreed to support a project of

the petitioner for development of a process for “E-waste recycling and

precious metal recovery”.

5.

Clause 15 of the Agreement contains an arbitration clause in

the following terms:

“If any dispute or difference arises between the parties hereto as to

differences shall be referred to the sole arbitration of the

Secretary of Department of Legal Affairs, Govt. of India or his

nominee. A reference to the arbitration under this clause shall be

Digitally Signed By:SHITU

NAGPAL

Signing Date:20.03.2023

18:21:54

Signature Not Verified

NEUTRAL CITATION NUMBER- 2023:DHC:1956

O.M.P.(COMM) 519/2019

Page 3 of 14

force.”¹

6.

Disputes having arisen between the parties, NRDC invoked

arbitration by a communication dated 08.12.2017 addressed to the

Secretary, Department of Legal Affairs. In the said communication, it

specifically referred to the provisions of the Arbitration and

Conciliation (Amendment) Act, 2015 and requested the addressee not

to act as the arbitrator, but to nominate any other person who may not

fall under the categories specified in the Fifth and Seventh Schedules

to the Act.

7.

Pursuant to this request, the Secretary, Department of Legal

Affairs, issued an order dated 22.02.2018, appointing Shri Sarvesh

Chandra, Former Chairman, FERA Board as the sole arbitrator. The

arbitrator entered into the reference on 05.03.2018 and also made a

declaration in terms of the Act.

8.

After the conclusion of the arguments before the arbitrator, and

during the period when the award was reserved, a communication

dated 16.08.2019 was addressed by Mr. Kalia (who was acting for

NRDC and DSIR in the arbitration proceedings also) to the arbitrator

(incidentally,

without

copying

the

petitioner

herein

or

its

representative), in which it was stated as follows:

“ ***** ***** *****

were put up and considered by the competent authorities o