A non-party to an arbitration agreement lacks standing to challenge the appointment of an arbitrator, based on existing contractual terms.

ORDER

(Passed on this 27th day of January, 2021)

1. This order shall also govern the disposal of this batch of petitions filed under Article 226 of the Constitution of India given the similarity of the issue involved. For the sake of convenience, the facts as narrated in Writ Petition No.12141/2019 are being taken into consideration.

2. The sole question that arises for the consideration of this court is that whether a writ petition is maintainable to challange the appointment of an arbitrator by the petitioner who is not a party to the arbitration agreement.

3. The Writ Petition has been filed against order dated 22.05.2018 (Annexure P/3) passed by the Chief Engineer (CZ), Central Public Works Department, Nirman Sadan, Bhopal MP (respondent No.3) whereby to adjudicate a dispute between respondents No.3 and 4 (on one side) and respondent No.5 (on the other), respondent No.6 has been appointed as an Arbitrator.

4. Petitioner’s contention is that the appointment of respondent No.6, as an Arbitrator, to adjudicate the dispute between respondents No.3 & 4 and respondent No.5 is contrary to Section 12 of Arbitration and Conciliation Act, 1996 (herein after referred to as “AC Act of 1996) read with V^th and VII^th Schedule.

5. In brief, the facts of the case are that the petitioner - Pandit Dwarka Prasad Mishra, Indian Institute of Information Technology, Design and Manufacturing (in short, IIITDM) is an autonomous Technical Institute of National importance fully funded by Ministry of Human Resources Development (MHRD). According to the petitioner, it had assigned construction activities of its campus to respondents No.1 to 4, who are the Authorities of CPWD; and has also deposited more than 200 crores with respondents No.1 to 4 during different financial years for construction of the projects. According to the petitioner, the work has still not been completed even after lapse of seven years; and on a complaint made by the petitioner, the matter has also been referred by the respondent No.1 to the Central Vigilance Commissioner (CVC) and the entire work initiated by respondents No.3 to 5 is to be evaluated by CVC.

6. It is further the case of the petitioner that for construction of the aforesaid work, a Memorandum of Understanding (MoU) between petitioner and respondent No.3 has also executed on 20^th November, 2009 (Annexure P/1) enumerating various conditions for construction of projects needed by the petitioner for running the Institution effectively. Pursuant to the aforesaid MoU, respondent No.3 also issued a Notice Inviting Tender (NIT) for construction of projects; and respondent No.5 was selected as the Contractor.

7. Admittedly a dispute has arisen between respondent No.5 and respondent No.3, pursuant to which, Shri Basab Majumdar, a Retired Director General, CPWD, New Delhi (Respondent No.6) has been appointed as an Arbitrator by the respondent No.3 to adjudicate the dispute between the parties.

8. It is also an admitted fact that the contract executed between respondents No.3 & 4 with respondent No.5 is governed by General Conditions of Contract of CPWD (Annexure P/2) in which Clause 25 provides for settlement of dispute through Arbitrator.

9. Grievance of the petitioner is that appointment of respondent No.6, as an Arbitrator, to adjudicate the dispute between the parties is in contravention of Section 12 of the AC Act of 1996 read with Schedule V^th and VII^th appended therewith, as respondent No.6 is a Retired Director General of CPWD and falls within the mischief of the said Section and cannot be appointed as an Arbitrator.

10. In support of his contention, Shri Ajay Pal Singh, counsel for the petitioner has also relied upon the decision