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IN THE HIGH COURT OF DELHI AT NEW DELHI

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Date of Decision: 17.12.2013

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W.P.(C) 7918/2013 and CM No. 16777/2013 (stay)

TRAXPO ENTERPRISES PVT. LTD

..... Petitioner

Through: Mr Kuljeet Rawal and Mr Jagjit

Singh, Advs.

Versus

PEC LIMITED & ANOTHER

..... Respondent

Through: Mr Arvind Chaudhary, Adv for R-1

CORAM:

HON'BLE MR. JUSTICE V.K.JAIN

JUDGMENT

V.K.JAIN, J. (Oral)

The petitioner before this Court entered into an agreement with

respondent No.1-PEC Limited, which is a public sector undertaking.

The agreement between the said parties contained the following

arbitration clause:-

“Any dispute or difference in respect of may matter

relating to or arising out of the Associateship Agreement

between PEC and ASSOCIATE, if the same is not

resolved amicably, will be settled at New Delhi by

arbitration in accordance with Rules of Arbitration of

Indian Council of Arbitration, New Delhi and the Award

made in pursuance thereof shall be final and binding on

the parties. The Arbitrator will give a reasoned Award.

The venue of arbitration will be New Delhi.

2013:DHC:6473

2. As per the rules of Arbitration of ICA, since the claim raised by

respondent No. 1 amounted to Rs 13,22,55,637/-, it was required to be

decided by the Tribunal of three arbitrators, one each to be nominated

by the parties and the third or the presiding arbitrator to be nominated by

the Council unless the parties to the dispute mutually agreed to refer the

dispute to a sole arbitrator.

The disputes arose between the parties and respondent No. 1

raised a claim of Rs 13,22,55,637/- against the petitioner and

approached respondent No.2-Indian Council of Arbitration. Vide letter

dated 24.04.2013, the said Council, referring to the claim of respondent

No. 1, required the petitioner to forward the name of its nominee

arbitrator from the ICA panel of arbitrators which was available on its

website, on or before 25.05.2013. The petitioner was also required to

deposit a sum of Rs 14,45,490/- towards its share of the advance deposit

of the tentative arbitration cost and expenses of arbitration, in terms of

Rule 28 of the ICA Rules of Arbitration, on or before 25.05.2013.

The petitioner responded to the letter of respondent No. 2 dated

25.04.2013 by way of reply dated 23.05.2013. In its reply, the petitioner

denied the claim raised by respondent No.1, but neither did it appoint an

arbitrator from the panel of ICA nor did it deposit its share towards the

2013:DHC:6473

cost of tentative cost of arbitration. In fact, no request was made in the

reply dated 23.05.2013 for extension of time for nominating the

arbitrator of the petitioner and/or depositing its share towards the

tentative cost of arbitration.

3. Vide letter dated 30.05.2013, respondent No. 2 Indian Council of

Arbitration, extended time till 21.06.2013 for compliance of the

directions, contained in its letter dated 25.04.2013. The petitioner

responded to the letter of ICA dated 30.05.2013, by way of reply dated

13.06.2013. The stand taken in the reply was that it was not bound to

pay to ICA towards the deposit for arbitration. No request was made in

this letter for extension of time either for appointment of an arbitrator on

behalf of the petitioner or for depositing the share of the petitioner in the

tentative cost of arbitration.

4. Vide letter dated 18.06.2013, ICA informed the petitioner that in

view of their refusal to make payment of arbitral fee, they could, under

Rule 28, realize the share of the petitioner from the claimant/respondent

No.1. The petitioner was further informed that the claimant had

forwarded the name of Shri P.C. Markanda, Senior Advocate and had

proposed to resolve the dispute through his sole arbitration instead of

resolving it through the panel of three arbitrators. The petitioner was

2013:DHC:6473

asked to convey its consent in case the proposal