UNION OF INDIA Vs. PUSHKAR PAINT INDUSTRIES

JUDGEMENT

(1.) The present petition under Sec. 14 of the Arbitration and Conciliation (Amended) Act, 2015 has been filed for termination of mandate of the Arbitral Tribunal.

(2.) The petitioner herein (who is the respondent in the arbitration proceedings) is the Ordnance Department (Indian Army) under the Ministry of Defence, Government of India. A Supply Order dtd. 30/5/2014 for procurement of Paint Qty. 42,180 amounting to Rs.1,06,19,923.49 was placed upon respondent No.1. However, respondent No.1 failed to submit the advance sample within time in terms of the Contract, leading to huge losses to the petitioner which was compelled to cancel the Supply Order. The Bank Guarantee of Rs.10,61,992.00 submitted by respondent No.1, was forfeited. The Respondent No.1 challenged the forfeiture by way of Writ Petition before the High Court of Allahabad. However, vide Order dtd. 11/5/2017 the Writ Petition was dismissed with a liberty to the parties to invoke arbitration proceedings in terms of Arbitration Clause 3 contained in the Agreement between the parties.

(3.) The petitioner was supposed to choose the name of Arbitrator from the Panel of Arbitrators to work as Arbitrator on payment of fees decided by the Department. The name of Shri B.L. Chaudhary who was not on the Panel of Arbitrators, was chosen with the consent of both the parties. The learned Sole Arbitrator was Ex-Joint Secretary and Legal Advisor in Ministry of Law and Justice and had been holding various positions in Government of India and was last working as Advisor (Legal) in Ministry of Environment, Forest and Climate Change, Government of India.