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I N THE HI GH COURT OF UTTARAKHAND AT NAI NI TAL SRI JUSTICE G. NARENDAR, C.J.

7^TH JANUARY, 2025 ARBI TRATI ON PETI TI ON NO. 78 OF 2023 Between:

M/s SPDD VDPPL JV and another. …………….Applicants and State of Uttarakhand and others. .…Respondents Counsel for the applicants : Mr. B.D. Pande and Mr. Rajesh Sharma, learned counsel.

Counsel for the respondents : Mr. B.S. Parihar, learned Standing Counsel with Ms. Rajni Supyal, learned Brief Holder for the State.

Mr. Rohit Arora, learned counsel for respondent Nos. 2 to 4 virtually.

Upon hearing the learned Counsel, the Court made the following

JUDGMENT :

Heard learned counsel for the applicants and learned counsel for the respondents.

2. Brief facts are that the applicants were awarded a contract vide letter dated 31.12.2016 and the Agreement dated 23.02.2017 came to be executed between the parties for construction and renovation of Jummagad Small Hydro Project, Capacity 2 X 600 KW on turnkey basis and operation and maintenance for three months after commissioning in Block Joshimath, District Chamoli. The period of completion was fixed at 15 months from the date of the Agreement.

3. It is the case of the applicants that the execution of the Project came to be delayed due to climatic and geological conditions and lackadaisical approach of the respondent-Department. Due to the reasons noted supra, the respondents are said to have terminated the contract apparently on account of the failure of the applicants to complete the execution within the agreed period. The termination of the contract is the cause for demand for arbitration. It is not in dispute that the Agreement, more particularly the general conditions of contract, envisages the resolution of disputes that may arise between the parties by resort to arbitration.

4. The short point that arises for consideration in the instant Application is whether the applicants are entitled for appointment of an Arbitrator de-hors the stipulation in Clause 28.0, wherein it has been agreed that the Principal Secretary/Secretary, Department of Energy, Government of Uttarakhand, Dehradun shall act as the sole arbitrator or any person nominated by him is entitled to act as the sole arbitrator?

5. Learned counsel for the applicants places reliance on the ruling rendered in Perkins Eastman Architects DPC and another vs. HSCC (I ndia) Limited reported in (2020) 20 SCC 760 to contend that in the light of the law declared by the Hon’ble Apex Court, the concept of named Arbitrator, who himself is a interested party, is no more sustainable. He takes the Court through Paragraphs 18 to 24, 27 and 28 to buttress his contention that Clause 28.0 cannot be put against him and that the same is no more binding in view of the law declared by the Hon’ble Apex Court. Paragraphs 18 to 24, 27 and 28 of the above judgment are extracted hereinbelow:-

“18. The issue was discussed and decided by this Court as under: (TRF Ltd. vs. Energo Engg. Projects Ltd., (2017) 8 SCC 377):

50. First, we shall deal with Clause (d). There is no quarrel that by virtue of Section 12(5) of the Act, if any person who falls under any of the categories specified in the Seventh Schedule shall be ineligible to be appointed as the arbitrator. There is no doubt and cannot be, for the language employed in the Seventh Schedule, the Managing Director of the Corporation has become ineligible by operation of law. It is the stand of the learned Senior Counsel for the appellant that once the Managing Director becomes ineligible, he also becomes ineligible to nominate. Refuting the said stand, it is canvassed by the learned Senior Counsel for the respondent that the ineligibility cannot extend to a nominee if he is not from the Corporation and more so when there is apposite and requisite disclosure. We think it appropriate to make it clear that in the case at hand we are neither concerned with the disclosure nor objectivity nor impartiality nor any such other circumstance. We are sing