MAHANAGAR TELEPHONE NIGAM LIMITED Vs. UNIBROS

JUDGEMENT

(1.) Parliament's resolve of interring the Arbitration Act, 1940 would be futile if the contention raised in this petition on behalf of the Mahanagar Telephone Nigam Ltd. (MTNL for short) is to be accepted. Further, the ghost of the repealed statute would have encountered only an unsuccessful exorcism despite the perspicuous judgement of the Apex Court in Thyssen Stahlunion GMBJ vs. Steel Authority of India Ltd., AIR 1999 SC 3923: 1999 (9) SCC 334 if these arguments are to be accepted. On 20.9.2002 my learned Brother S.K.Aggarwal, J. had recorded in the present proceeding that - " the issue involved here is whether the old Arbitration Act of 1940 would apply in this case". It is on this question that arguments have been addressed by learned counsel for the adversaries.

(2.) The annals of the litigation are not in dispute. MTNL had awarded a contract to Unibros Ltd. (Unibros for short) for the construction of a telephone exchange-cum- office building in the CGO Complex, Lodhi Road, New Delhi in 1990. On 11.9.1991 Unibros invoked the Arbitration Clause; in response MTNL terminated the contract invoking Clause 25 of General Conditions of Contract (for short GCC). Thereafter Unibros had filed a suit before this Court in 1991 in which the first Arbitrator was appointed by Orders dated 5.12.1991. An interim Award was announced on 13.3.1992 but this Award was assailed before this Court and was set aside by Orders dated 24.5.1999 which read thus:

(3.) The Arbitrator appointed by the Court, namely, Shri K.D. Bali, published his Award dated 29.12.2000 in which a sum of Rs.2,44,62,861.68 was ordered to be paid by the MTNL to Unibros. This Award has been challenged by the MTNL in this petition, which is numbered as Suit No.266A/2001, under Sections 14 and 17 of the Indian Arbitration Act, 1940 praying for the issuance of appropriate directions to the Arbitrator to file his Award along with the arbitral records. This suit was filed on 27.1.2001. Execution No.163/2001 was filed on 30.7.2001 by Unibros under the Arbitration and Conciliation Act, 1996. On 31.7.2001 Hon'ble J.D.Kapoor, J. took note of the statement of the counsel for the Decree Holder, viz. Unibros that no application under Section 34 of the Arbitration Act had been filed till that date. The learned Judge recorded that "since the award was pronounced on 29.12.2000 it has to be enforced as a decree under Section 36, as the Objections under Section 34 of the Act are not filed within three months. Let warrants of attachment to issued (dasti also) for 2.11.2001 in terms of prayer (i)." On 10.8.2001 MTNL filed EA No.306/2001 in Execution No.163/2001 under Order XXI Rule 26 and 29 read with Section 151 of the CPC and Section 41 of the Arbitration Act, 1940 for stay of the execution proceedings. It was ordered by the Court that the attached amount shall not be disbursed to the Decree Holder, and this Order continues to operate till date. Meanwhile Suit No.266-A/2001 was listed before the Joint Registrar (A) on 8.8.2001 and it was noted that the Award and proceedings have been filed. Notice of the suit was issued to Unibros for 28.2.2002. On 5.9.2001 MTNL filed Objections against the Award dated 29.12.2002 praying therein that the said impugned Award may be set aside/quashed on the grounds set forth in Section 30(a) and (c) read with Section 33 of the Arbitration Act (X of 1940). No reply to these Objections had been filed by the Unibros.