Back
2024 Supreme(Online)(DEL) 22513
HIGH COURT OF DELHI
Prathiba M. Singh, J
M/S ROSHAN REAL ESTATES PVT LTD – Appellant
Versus
PUBLIC WORK DEVELOPMENT DELHI – Respondent
O.M.P.(MISC.)(COMM.)-256/2023
Ms. Anusuya Salwan, ld. Counsel with Mr. Parth Kaushik, Adv.
The appointment of an arbitrator from a mutually agreed panel is valid, even if the appointing authority is ineligible, provided there is mutual consent from both parties.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 12(5), 21, and 29A - Extension of mandate of Sole Arbitrator - Petition filed for extension of mandate after expiry - Court considers whether sufficient cause exists for extension - Respondent's objections regarding the appointment of the Sole Arbitrator based on ineligibility under Section 12(5) - Court finds that the appointment was made with mutual consent and thus valid - Mandate extended till 31st July, 2024. (Paras 1, 10, 43)
(B) Arbitration Proceedings - Validity of appointment - Consent of parties to the appointment of Sole Arbitrator from a mutually agreed panel - Ineligibility of appointing authority does not invalidate the appointment if made from an agreed panel. (Paras 41, 42)
Facts of the case:
The petitioner sought an extension of the mandate of the Sole Arbitrator after the initial mandate expired. The respondent opposed the extension, claiming the Sole Arbitrator was ineligible due to the manner of appointment. The court examined the validity of the appointment and the consent of both parties.
Findings of Court:
The court found that the appointment was valid as it was made from a panel agreed upon by both parties, despite the ineligibility of the appointing authority.
Issues: The main issues were whether the appointment of the Sole Arbitrator was valid given the objections raised by the respondent and whether sufficient cause existed for extending the mandate.
Ratio Decidendi: The court ruled that the appointment was valid due to mutual consent and that objections regarding ineligibility do not invalidate the appointment when made from an agreed panel.
Result: Petition allowed; mandate extended till 31st July, 2024.
Prathiba M. Singh, J. Background
1. This hearing has been held through hybrid mode.
2. The present petition under Section 29A (3) & (4) of the Arbitration and Conciliation, Act 1996 (hereinafter, ‘1996 Act’) has been filed by the Petitioner- Roshan Real Estate seeking extension of the mandate of the ld.
Sole Arbitrator. According to both the parties, arguments have been concluded before the ld. Sole Arbitrator and only the final award is to be delivered. Hence, a six months extension of the mandate of the ld. Sole Arbitrator is sought.
3. The brief background of the present petition is that tenders were invited by the Respondent-Public Works Developments (hereinafter, ‘PWD’) in August, 2013 for ‘Redevelopment of C-block of the Delhi High Court’ in respect of certain RCC framed structure buildings, water supply, sanitary & electrical installations vide NIT/No..18/NIT/CE/PWD/M (hereinafter, ‘the contract’). The bid submitted by the Petitioner was declared to be the successful bid on 5th December, 2013, and as per the Petitioner, by 10th July, 2017, the work was fully completed. As per the petition, the final bill was raised on 6th June, 2018 and the said bill was not paid. On 3rd July, 2020, the matter was referred to the Disputes Redressal Committee under the Chairmanship of Chief Engineer, however, the claims of the Petitioner were rejected. Vide letter dated 29th July 2020, the Petitioner invoked the arbitration clause 25 of the contract in terms of Section 21 of the 1996 Act.
4. The Respondent, vide letter dated 13th August, 2020, suggested a list of three Arbitrators to be picked by the Petitioner for appointment as the sole arbitrator. The said letter is relevant, and is set out below:
- “With reference to your above cited letter on the subject matter vide which you have raised objection on appointment of Sh. B. B. Dhar, Retd. Chief Engineer, CPWD as arbitrator on the ground of professional relation with him as he was superintending your work in the past. The said appointment has been withdrawn on your request.
- In view of the above objection, the following five empanelled PWD Arbitrators are mentioned below for choosing name of three arbitrators so that one of the arbitrator can be appointed as Sole Arbitrator :-
1. Sh. K. B. Rajoria, Retd. E-in-C, PWD 2. Sh. A. K. Singhal, Retd. DG, CPWD 3. Sh. Rakesh Mishra, Retd. DG, CPWD 4. Sh. Dinesh Kumar, Retd. E-in-C, PWD 5. Sh. Anil Kumar Sharma, Retd. SDG, CPWD”
5. In response thereto, vide letter dated 13th August, 2020, the Petitioner stated as under:
- “Dear Sir, Please refer to your letter of even No.1286-H dated 13.08.2020. With reference to your above quoted letter, and as desired by you therein, out of the list sent by your office, we hereby give you the name of three arbitrators as under:
1. Shri Dinesh Kumar, Retd. E-In- C, PWD 2. Shri Rakesh Mishra, Retd. DG, CPWD 3. Shri A. K. Singhal, Retd. DG, CPWD.”
6. Finally, vide order dated 17th August, 2020, the Office of the Chief Engineer (hereinafter, ‘Chief Engineer’), appointed Mr. Dinesh Kumar, Retired Engineer-in-Chief, PWD as the ld. Sole Arbitrator, to render the award in the dispute between the parties. It is not disputed that the ld. Sole Arbitrator has entered reference. The ld. Sole Arbitrator also sent a letter dated 17th August, 2020 giving his disclosure under Section 12(1)(a), & (b) of the 1996 Act. In terms of the said letter, the parties were also asked to file their objections to the appointment of the ld. Sole Arbitrator, if any, by 28th August, 2020.
7. In the first meeting held on 31st August, 2020, the ld. Sole Arbitrator fixed the procedure qua the conduct of the arbitral proceedings and recorded as under:
- “1. The Constitution of this Arbitral Tribunal with the sole Arbitrator was notified by Arbitrator vide letter no.
- —ARB/DIC43/1 dated 17-08-2020 to the parties.
2. The objections to the appointment as sole Arbitrator were invited by: 28/08/2020 from both the parties.
3. The Clai
