WAKACHIKU CONSTRUCTION CO. LTD.

WAKACHIKU CONSTRUCTION CO. LTD. VS.
ROAD DEVELOPMENT AUTHORITY

SUPREME COURT
SALEEM MARSOOF, PC.,J.
SRIPAVAN J. AND
IMAM,J.
S. C. MISC. 01/2011
H. C. (ARB) NO. 2404/2010
FEBRUARY 6TH, 2012

Arbitration Act No. 11 of 1995 - Sections 7(3)(b),32 - When parties unable to reach an agreement as to the appointment of an Arbitrator or Arbitrators, any party may apply to the High Court to take necessary measures towards the appointment of the Arbitrator or Arbitrators - Inherent jurisdiction of Court?

The Petitioner is a foreign construction company which was engaged in construction work for the Respondent. Disputes had arisen between the Petitioner and the Respondent during the course of the construction works. The Petitioner referred the said disputes first to the Engineer and then to the Adjudicator in terms of the provisions of the Condition of contract. Being dissatisfied with the decision of the adjudicator, the Petitioner referred the said disputes to Arbitration. The Petitioner nominated three foreign Arbitrators and requested the Respondent to select one of them to serve as an Arbitrator with the stipulated time period of 21 days. The Respondent refused to comply with the request made by the Petitioner and made a counter request to name Sri Lankan Arbitrators for consideration. The Petitioner urged the Respondent to select one Arbitrator from the list submitted by the Petitioner within the contractually stipulated period of 21 days. The Respondent rejected the three names submitted by the Petitioner.

As the Respondent failed to select an Arbitrator from the three names nominated by the Petitioner within the stipulated period, the Petitioner,

with notice to the Respondent appointed Mr. Neville Tait as the sole Arbitrator as per Clause 19.5 of the Conditions of Contract.

The Respondent thereafter invoked the jurisdiction of the High Court on the ground that inter alia the Petitioner had unilaterally appointed an Arbitrator in violation of its contractual obligations and the provisions of the Act.

The High Court by its order dated 11.3.2011, held that the procedure adopted by the Petitioner to appoint the said Neville Tait is contrary to the agreement and the said appointment has been done without authority.

On appeal:

Held:

Per Sripavan, J.

"It would be a matter for determination by the Court in each individual case whether the circumstances of the case make out the necessity to exercise the inherent power and make it incumbent on the Court to exercise that power to do justice between the parties. Hence the inherent power of the Court has to be exercised carefully and with caution and only where such exercise is justified considering the facts of the case which saddens the conscience of the Court."

(1) When a statute provided a method so as to meet a contingency in a particular manner, any other method thought of by the Court cannot then be said to be a method which would advance the interest of justice. No occasion for the exercise of any inherent power arises when the statute expressly provides for what is to be done in that situation.

per Sripavan J. -

"The remedy provided by the statute may not be an efficacious one. It may even lack the necessities to grant quick relief. However, it is well settled and accepted as axiomatic that justice be administered in accordance with the law of the land"

(2) If all the powers which will be necessary to secure the ends of justice exists at some point and such existence is recognized by the statute, inherent power of a Court cannot be invoked disregarding express statutory provision.

(3) The Act gives the Petitioner an express provision to invoke the jurisdiction of the High Court in a particular manner once an award is made and the party seeking to enforce the right must resort to that remedy and not to others.

(4) It cannot be the duty of any Court to exercise its inherent powers when it

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