S B P Vs. PATEL ENGINEERING LIMITED

JUDGEMENT

(1.) THIS Writ Petition seeks to challenge the order dated 18th November 2001 appointing the third Arbitrator passed by the learned designated Judge on the arbitration Application moved by respondent no 1 under Section 11 of the Arbitration and conciliation Act, 1996 (for short, "the said act" ).

(2.) DR. Tulzapurkar has appeared for the petitioner and Mr. Chinoy for the respondents.

(3.) THE facts leading to this petition are as follows: - (a) Respondent No. 1 was awarded a contract by State of Maharashtra through its Irrigation Department for the construction of civil works pertaining to stage IV of the Koyna Hydroelectric project. Respondent No. 1 in turn entered into a sub-contract with the petitioner with respect to a piece work for that purpose. Clause 19 of the Agreement contained an arbitration clause which reads as follows -.-"the continuance of this piece work agreement/contract or at any time after the termination thereof, any difference or dispute shall arise between the parties hereto in regard to the interpretation of any of the provisions herein contained or act or thing relating to this agreement/ contract, such difference or dispute shall be forthwith referred to two Arbitrators for Arbitration in Bombay one to be appointed by each party with liberty to the Arbitrators in cases of differences or their failure to reach an agreement within one month of the appointment, to appoint an umpire residing in Bombay and the award which shall be made by two arbitrators or umpire as the case may be shall be final, conclusive and binding on the parties hereto. If either party to the difference or dispute shall fail to appoint an arbitrator within 30 calendar days after notice in writing having been given by the parties or shall appoint an arbitrator who shall refuse to act then the arbitrator appointed by the other party shall be entitled to proceed with the reference as a Sole Arbitrator and to make final decision on such difference or dispute and the award made as a result of such arbitration shall be a condition precedent to any right of action against any two parties hereto in respect of any such difference and dispute. (b) It so happened that the petitioner appointed respondent No. 2 as its arbitrator. Respondent No. 1 appointed one Shri S. N. Huddar to act as its Arbitrator. Shri Huddar, however, later on expressed his inability to act an Arbitrator in view of the fact that he was associated with the Koyna Project Work as superintendent and Chief Engineer earlier. In view of Shri Huddar declining to act as an Arbitrator, respondent No. 1 appointed one Shri S. L. Jain as its arbitrator in the matter. Respondent no. 1, by its letter dated 27th February 2002 addressed to respondent No. 2, pointed out that as per Section 15 (2) of the said Act, it was entitled to appoint another Arbitrator within 30 days of Shri huddar's declining to act and there is no question of respondent No. 2 acting as the Sole Arbitrator. Shri Jain suggested the names of three retired Judges of this Court to act as the Third Arbitrator. However, respondent No. 2, by his letter dated 25th March 2002, rejected the contention of respondent No. 1 that any such Third Arbitrator could be appointed. It was, in these circumstances, that respondent No. 1 moved an Application before the learned designated judge to appoint the Third Arbitrator. The learned Judge accepted the submissions of respondent No. 1 that there was a need to appoint the Third Arbitrator since there was a vacancy and appointed a retired Judge of this Court as the Third Arbitrator. Being aggrieved by this order passed by the learned Single judge under Section 11 of the said Act, this petition has been filed.