SOLUTIONS ADVERTISING Vs. THANE MUNICIPAL CORPORATION

JUDGEMENT

(1.) The Petitioner seeks the appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act 1996. Under an agreement entered into between the Petitioner with the First Respondent on 19 September 2008, the Petitioner agreed to construct 298 bus shelters and to maintain 172 bus shelters and to supply 9 transport buses to the Transport Undertaking of the Thane Municipal Corporation. As consideration for the services to be performed, the Petitioner was permitted to display advertisements for a stipulated period. The contract was terminated on 25 October 2010. The Petitioner thereupon moved an application under Section 9 of the Arbitration and Conciliation Act of 1996 before the Principal District Judge, Thane. By an interim order dated 21 December 2010, the learned trial judge restrained the Undertaking from preventing the Petitioner from putting advertisements on 470 bus stops pursuant to the agreement until the disputes/claims were taken before the arbitrator under Clause 85 of the agreement. Clause 85 of the agreement stipulates that all differences and disputes between the parties shall be referred to the sole arbitration of the Commissioner of the Thane Municipal Corporation. The arbitration agreement was invoked by the Transport Undertaking on 24 December 2010. The Petitioner by its letter dated 13 January 2011 objected to the appointment of the Commissioner on the ground that he was a party to the agreement dated 19 September 2008. Thereupon the Petitioner instituted these proceedings for the exercise of the jurisdiction under Section 11(6).

(2.) Counsel appearing on behalf of the Petitioner submitted that the Commissioner of the Thane Municipal Corporation should not act as an arbitrator since the Petitioner has justifiable doubts about his impartiality. Learned Counsel, during the course of the hearing, submitted that the objections which have been raised in the Petitioner s letter dated 13 January 2011 that the ' Commissioner was a party to the agreement may not be strictly correct since the agreement has been entered into between the Transport Undertaking and the Petitioner. However, it was submitted that when the contract was awarded, Clause 5 states that the award of the contract has been approved by the Municipal Corporation and the approval forms a part of the agreement. The resolution of the Municipal Corporation for the award of the contract in turn refers to the approval of the transport committee dated 23 July 2008 and to the recommendation made by the Commissioner for the award of the contract. On these grounds, it has been submitted that this Court should appoint an independent arbitrator.

(3.) Counsel appearing on behalf of the Respondents submitted that as a matter of fact, the Transport Undertaking of the Municipal Corporation functions independently and is presided over by the Transport Manager. Besides, it has been submitted that though the resolution for the award of the contract to the Petitioner was recommended by the Commissioner, the Commissioner has had no role whatsoever to play in the actual execution of the contract or the supervision of the work to be performed. Moreover, it has been submitted that the Commissioner has already entered upon the proceedings. The next meeting is to be held on 31 January 2011. Learned Counsel submitted that in the event that the Petitioner has any doubt about the impartiality of the arbitrator, the provisions of Sections 12 and 13 provide an adequate remedy and that therefore having regard to the fact that the Commissioner has already entered upon the arbitral proceedings, this Petition should not be entertained.