SUDARSHAN TELECOM Vs. BHARAT SANCHAR NIGAM LTD

JUDGEMENT

(1.) This is an petition under Section 11(6) of the Arbitration and Conciliation Act, 1996(hereinafter referred to as the `Act') for appointment of an independent arbitrator and discloses the indifference of the public sector undertakings on their belated response to the request for appointment of an arbitrator and the consequences thereof.

(2.) The parties to this petition entered into a tender/contract for purchase of 12 Fibre(12F) and 24Fibre(24F) Optical Fibre Cables by the respondents. The petitioner is the supplier and the purchaser/respondent is the Bharat Sanchar Nigam Limited. Clause 20.1 of the Agreement between the parties providing for settlement of disputes by way of arbitration reads as follows:-

(3.) It is not in dispute that upon disputes arising between the parties and in accordance with the above clause, the petitioner had called upon the respondent No.2 to appoint an arbitrator by addressing a communication to the CMD, BSNL as provided in the aforesaid clause 20.1 on 28th January, 2004 by a letter admittedly received by the respondents. There was no response from the respondent No.2. On 16th March, 2004 the petitioner approached this Court under sub-section (6) of Section 11 of the Act. The notice was served upon the respondents. In reply to the arbitration petition, Mr. S. Pattjoshi appears on behalf of the respondents and has stated that they have now appointed an arbitrator on 17th May, 2004. It is not in dispute that the said appointment was after the petitioner approached this Court on 16th March, 2004 and even after the service of the notice upon the respondent in April, 2004. The position of law in respect of the delayed response to a request for appointment of an arbitrator is to be found in the judgment of the Supreme Court in Datar Switchgears Ltd. Vs Tata Finance Ltd. & Another reported as JT 2000 (Suppl.2) SC 226 wherein the relevant para 19 reads as follows:-