MANMOHAN, J : (Oral)

1. Present application has been filed under Sections 30 and 33 of the Arbitration Act, 1940 challenging the Award dated 13th November, 1995 passed by Mr. Avadh Behari Rohatgi, Sole Arbitrator.

2. Mr. P.D. Gupta, learned counsel for respondent/objector-cooperative society submitted that the impugned Award was liable to be set aside as the appointment of the Arbitrator was illegal inasmuch as the Arbitrator had been unilaterally appointed by petitioner/claimant-architect. In this connection, Mr. Gupta relied upon a judgment of Supreme Court rendered in the case of Dharma Prathishthanam Vs. Madhok Construction Pvt. Ltd. reported in IV (2004) CLT 130 (SC).

3. Mr. Gupta further submitted that the learned Arbitrator could not have awarded any compensation to claimant-architect as under the contract, claimant-architect was only entitled to, “a fee of 2.5% on total cost of executed works excluding the cost of land.” In this connection, Mr. Gupta relied upon a judgment of Supreme Court rendered in the case of Ramnath International Construction (P) Ltd. Vs. Union of India reported in (2007) 2 SCC 453.

4. On the other hand, Mr. D.R. Bhatia, learned counsel for petitioner/claimant-architect stated that the arbitration clause in the agreement had been invoked by the claimant-architect vide legal notice dated 6th May, 1995. He stated that as the objector-society vide its reply dated 1st June, 1995 had refused to appoint an arbitrator, the claimant-architect’s nominee had become the Sole Arbitrator. He submitted that the objector-cooperative society was estopped from raising this objection as it had not only participated in the arbitration proceedings before the learned Arbitrator but had also filed its counter-claim before him.

5. Mr. Bhatia further submitted that it is well settled that compensation can be awarded to a party whose rights have been violated. In this connection, Mr. Bhatia relied upon the case of Thomas Vs. Hammersmith Borough Council reported in (1938) 3 All England Law Reports Annotated 203 wherein it has been held as under :-

“…..I think it helpful first to consider what would have been the agreement between the parties if the appointment had been simpliciter to act as architect for the erection of the new town hall, without any provision as to scale of charges, and if the council had then, before the work was completed without cause other than their mere volition, terminated the agreement. In such case, I entertain no doubt that the architect would have been entitled to reasonable remuneration for the work which he had already done, and also to damages for the loss of remuneration which he had been prevented from earning until the work was finished: see Planche v. Colburn (1831), 8 Bing. 14 and Prickett v. Badger (1856), 1 C.B.N.S. 296. Although the contract in this assumed form would contain the no express term to this effect, I think that it would be implied that the council, having employed the plaintiff to build their town hall, agreed with him that they would not prevent him from doing the work, and so prevent him from earning his remuneration…..”

6. Having heard the parties at length, I am of the view that Mr. Avadh Behari Rohatgi’s appointment as a Sole Arbitrator was neither unilateral nor illegal. The arbitration clause in the agreement executed between the parties reads as under :-

“8. ARBITRATION: In the event of any dispute, difference of question arising out of or touching or concerning this agreement or execution of the said works, the same shall be referred to the arbitration of two persons, one each appointed by the parties, who in turn may appoint an umpire, if required.”

7. After the disputes arose, the claimant-architect had issued a legal notice dated 6th May, 1995 wherein it was stated as under :-

“6. In the facts and circumstances stated above, my clients exercise the right of invoking the above arbitration clause and propose to appoint Mr. Justice Avedh Behari, a retir