NATIONAL BUILDINGS CONSTRUCTION Vs. CORPORATION LTD.

JUDGEMENT

(1.) THE dispute interse the parties arises from the agreement of 1980 with State Organisation for Tourism, Iraq for construction of two hotels. NBCC entered into a back to back contract with Reunion Engineering Company Limited for electrification work in these two hotels. THE work was completed in 1987 but the claim interse the parties before us could not be resolved and thus arbitration was invoked.

(2.) IN terms of arbitration clause 36, the dispute had to be referred to the sole arbitration of the Project Director, NBCC or any person appointed by him. IN the relevant time, the post of the Project Director had not been filled. NBCC appointed one Mr. V.A. Kelkar, one of its Chief Engineers as an Arbitrator, which was objected to by the contractor, resulting in filing of OMP 49/1989 under sections 5, 11, 12 and 33 of the Arbitration Act, 1940 (hereinafter referred to as the said Act). This dispute was amicably resolved as the parties jointly filed an application before the court for appointment of Mr. S.R. Nair, as Sole Arbitrator in substitution of the earlier arbitrator , which was accepted by the learned Single Judge and the OMP was disposed of on 06.08.1991. Mr. S.R. Nair thereafter entered upon reference and the award finally came to be made on 22.10.1994. Needless to note that during this period, the time for making the award was extended at joint request of the parties. The award was filed in court and registered as CS(OS) 83A/1995. NBCC filed objections under sections 30 and 33 of the said Act, which was registered as IA No.2515/1995. These objections have been partly allowed by the impugned order dated 05.04.2005, which has given rise to appeal and cross appeal.

(3.) ON examination of the pleas of the learned counsel for parties, we find that nothing prevents the parties from novating the terms of contract inter se the parties, with the consent, of its own free will. It is nobody's case that the consent has been procured without free will or under any duress. In fact it could hardly have been pleaded so by the NBCC. Undoubtedly, the original terms of the contract envisaged only the designated authority to appoint an Arbitrator, failing which arbitration process was not to be resorted to for settlement of disputes. However, the joint application filed by the parties sought appointment of Mr. S.R. Nair as an Arbitrator. The relevant portion of the application reproduced in the orders of the learned Single Judge for convenience is once again reproduced by us as under :-