THE HON’BLE JUSTICE MOUSHUMI BHATTACHARYA AND THE HON’BLE JUSTICE GADI PRAVEEN KUMAR

+ COMMERCIAL COURT APPEAL No. 35 OF 2024 % 24-04-2026 #

M/s. Ramky Elsmex Hyderabad Ring Road Limited …Appellant vs.$ M/s. Hyderabad Metropolitan Development Authority and 4 others.… Respondents

!Counsel for the Appellant: Mr. A.Venkatesh, learned Senior Counsel Ms.Pratusha Bopanna

^Counsel for Respondents: Mr. C.V. Mohan Reddy, learned Senior Counsel Mr. Dhananjaya Naidu Kolla

Gist :>Head Note :? Cases referred

1. 2009(9) SCC 384

2. (2000) 8 SCC 153. (2006) 2 SCC 6384. (2013) 4 SCC 35

JUDGMENT:

(Per Hon’ble Justice Moushumi Bhattacharya)

1. The present Commercial Court Appeal (COMCA) is filed under section 37 of The Arbitration and Conciliation Act, 1996 (‘A&C Act’) against an order dated 05.08.2024 passed by the learned Commercial Court at Hyderabad whereby the Commercial Court allowed an application (COP No.100 of 2018) filed by the respondent Nos.1 and 2 under section 34 of the A&C Act, setting aside an Arbitral Award dated 18.06.2018.

2. The appellant was the claimant before the Arbitral Tribunal consisting of three learned arbitrators. The Arbitral Tribunal, by the Award dated 18.06.2018, directed the respondent Nos.1 and 2 to pay Rs.168,36,97,859/- within 3 months from the date of the Award, failing which, the respondent Nos.1 and 2 were directed to pay interest as per the State Bank of India Prime Lending Rate on the aforesaid amount till its realization.

3. The respondent Nos.1 and 2 filed the Commercial Original Petition for setting aside the Award dated 18.06.2018. By the impugned order dated 05.08.2024, the Commercial Court allowed the C.O.P and set aside the Award dated 18.06.2018 on the ground that the constitution of the Arbitral Tribunal was improper as the presiding arbitrator could not have been appointed during pendency of the section 11(6) application before the erstwhile High Court of Andhra Pradesh.

4. The appellant/claimant has filed the present COMCA aggrieved by the order dated 05.08.2024 passed by the Commercial Court whereby the Award in its favour was set aside.

5. Learned Senior Counsel appearing for the appellant submits that section 11(6) of the A&C Act does not contain any bar on a consensual appointment of the presiding arbitrator, particularly where such appointment was brought to the notice of the High Court and the High Court permitted the appellant to withdraw the application filed under section 11(6) of the A&C Act on that basis. Senior Counsel further submits that the parties in the present case had already exercised their right to appoint their nominee arbitrators and that the only remaining step was the appointment of the presiding arbitrator, which was duly carried out with the consent of both nominee arbitrators. It is further submitted that the respondent did not raise any objection at the relevant point of time with regard to the appointment of the presiding arbitrator and that a plea of invalidity of the appointment cannot be taken at this belated stage.

6. Learned Senior Counsel appearing for the respondent Nos.1 and 2 (who sought for setting aside of the Award before the Commercial Court) submits that the two nominated arbitrators proceeded to nominate the presiding arbitrator during pendency of the application filed under section 11(6) of the A&C Act by the appellant, which was impermissible in law. Senior Counsel relies on decisions to urge that the right to appoint an arbitrator stands forfeited once an application is filed under section 11(6) of the A&C Act. It is further submitted that the two nominee arbitrators had failed to agree upon the presiding arbitrator which led to the appellant filing an application for appointment of an Arbitrator under section 11(6). Senior Counsel submits that since the appointment of the presiding arbitrator was barred under section 11(6), the constitution of the Arbitral Tribunal was not in accordance with the A&C Act and