TRAXPO ENTERPRISES PVT. LTD Vs. PEC LIMITED

JUDGEMENT

(1.) THE petitioner before this Court entered into an agreement with respondent No.1 -PEC Limited, which is a public sector undertaking. The agreement between the said parties contained the following arbitration clause: -

(2.) AS per the rules of Arbitration of ICA, since the claim raised by respondent No. 1 amounted to Rs 13,22,55,637/ -, it was required to be decided by the Tribunal of three arbitrators, one each to be nominated by the parties and the third or the presiding arbitrator to be nominated by the Council unless the parties to the dispute mutually agreed to refer the dispute to a sole arbitrator. The disputes arose between the parties and respondent No. 1 raised a claim of Rs 13,22,55,637/ - against the petitioner and approached respondent No.2 -Indian Council of Arbitration. Vide letter dated 24.04.2013, the said Council, referring to the claim of respondent No. 1, required the petitioner to forward the name of its nominee arbitrator from the ICA panel of arbitrators which was available on its website, on or before 25.05.2013. The petitioner was also required to deposit a sum of Rs 14,45,490/ - towards its share of the advance deposit of the tentative arbitration cost and expenses of arbitration, in terms of Rule 28 of the ICA Rules of Arbitration, on or before 25.05.2013. The petitioner responded to the letter of respondent No. 2 dated 25.04.2013 by way of reply dated 23.05.2013. In its reply, the petitioner denied the claim raised by respondent No.1, but neither did it appoint an arbitrator from the panel of ICA nor did it deposit its share towards the cost of tentative cost of arbitration. In fact, no request was made in the reply dated 23.05.2013 for extension of time for nominating the arbitrator of the petitioner and/or depositing its share towards the tentative cost of arbitration.

(3.) VIDE letter dated 18.06.2013, ICA informed the petitioner that in view of their refusal to make payment of arbitral fee, they could, under Rule 28, realize the share of the petitioner from the claimant/respondent No.1. The petitioner was further informed that the claimant had forwarded the name of Shri P.C. Markanda, Senior Advocate and had proposed to resolve the dispute through his sole arbitration instead of resolving it through the panel of three arbitrators. The petitioner was asked to convey its consent in case the proposal was acceptable to it. The petitioner responded to the said letter vide reply dated 27.06.2013, objecting to the proposal of the claimant/respondent No. 1 for resolving the dispute by sole arbitrator instead of a panel of three arbitrator and also informed ICA that they would convey the name of their arbitrator within three weeks. ICA was requested to grant three weeks time for the purpose. However, despite having sought time for three weeks for appointing its arbitrator, admittedly, the petitioner failed to do so.