MEHROTRA BUILDICON (P) LTD. Vs. DEPUTY CHIEF ENGINEER

JUDGEMENT

(1.) This application under Section 11 (6) read with Section 15 (2) of the Arbitration and Conciliation Act , 1996 (in short 'the Act, 1996') has been brought with prayer to appoint a sole arbitrator to arbitrate the dispute between the parties.

(2.) The applicant is a construction company. Respondents floated an advertisement inviting tender on 17.10.2006. The applicant was successful bidder, who was awarded work by letter of acceptance dated 02.04.2007 by the respondents. An agreement was entered between both the parties and the construction was to be completed within 18 months as per the terms of the contract. Due to failure on the part of the respondents in providing the applicant with drawing and due to price variations, the execution of the work was delayed, however, the work was completed on 25.12.2010. Outstanding payment was not cleared by the respondents despite various request and reminders sent by the applicant. The applicant then sent a notice dated 12.01.2012 requesting the respondents to refer the dispute to Arbitral Tribunal in accordance with the terms and the conditions of contract dated 17.08.2007. The respondents constituted Arbitral Tribunal consisting of three members, who were the officers of railway consequent to the notice given. The applicant submitted his claims before the Arbitral Tribunal on 10.12.2012. Subsequent to that change was made in the appointment of arbitrators without the consent of the applicant in a unilateral manner on more than one occasion. It is submitted that on account of such changes, the dispute between the parties could not be adjudicated by the Arbitral Tribunal and was kept pending for almost six years. The applicant then filed a petition under Section 14 of the Act of 1996 before the Commercial Court, Naya Raipur, praying for termination of the mandate given to the Arbitral Tribunal. The learned Commercial Court has vide order dated 17.09.2018 allowed the petition and terminated the mandate of the Arbitral Tribunal, therefore, under these circumstances, the applicant prays for appointment of sole arbitrator.

(3.) Reliance has been placed on the judgment of Delhi High Court in case of Orissa Concrete and Allied Industries Ltd. Vs. Union of India 2016 SCC OnLine Del 3463. Placing reliance on the judgment of Hon'ble Suprme Court in case of Union of India Vs. Singh Builders Syndicate (2009) 4 SCC 523, it is submitted that Hon'ble Supreme Court has deprecated the constitution of Arbitral Tribunal by appointing serving officers posted at far away places and it has also been observed that delay and frequent change in Arbitral Tribunal make a mockery of the process of arbitration. It was further held that appointment of retired judge of Delhi High Court as sole arbitrator was proper. It was also observed in the same judgment that where the Arbitral Tribunal appointed has not functioned then it becomes necessary to make fresh appointment, the Chief Justice or designated is not powerless to make appropriate alternative arrangement to give effect to the provision of arbitration.