NAGINBHAI C PATEL Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS is an application under sub-section (6) of section 11 of the Arbitration and Conciliation Act, 1996 ("act") for appointment of an arbitrator to decide the disputes and differences between the parties arising out of contract dated 16th June, 1997 for construction of Drawing Hall Electrical Lab for Technical High School at Diu. The arbitration agreement is contained in Clause 25 of the contract which reads as follows :

(2.) I have heard Miss L. Munim, learned Counsel for the petitioner and perused the facts of the case. I have also heard Mr. A. V. Mohta, learned Counsel for the respondents. There is no dispute about the existence of the arbitration agreement, arising of disputes between the parties in regard to the claims of the petitioner, demand for arbitration by the petitioner on 20th July, 1998 and receipt of the same by the respondents on the very same day. Admittedly, no arbitrator was appointed by the appointing authority till the making of request by the petitioner to the Chief Justice under sub-section (6) of section 11 of the Act on 21st August, 1998 to appoint an arbitrator. Despite that, the respondents oppose the appointment of arbitrator by the Chief Justice or the person designated by him on two grounds. First, an arbitrator has been appointed by the appointing authority during the pendency of this applications on 29th September 1998. That being so, this application has become infructuous. Second, on the failure of the authority to appoint an arbitrator under the procedure set out in the arbitration agreement, the Chief Justice or the person designated by him cannot appoint the arbitrator itself. It can only direct the appointing authority to act under the procedure and to appoint an arbitrator. So far as the second ground is concerned, it has been held by the Chief Justice M. B. Shah of this Court (as His Lordship then was) in (B. T. Patil and Sons v. Konkan Railway Corpn.), 1998 (4) Bom. C. R. 111 : 1998 (2) Mh. L. J. 327 and by me in Arbitration Petition No. 161 of 1998 (Larsen and Toubro Limited v. Konkan Railway Corpn.), in judgment dated 23rd December, 1998 reported in 1999 (2) Bom. C. R. 167, that the Chief Justice or any person designated by him has to make the appointment himself. It has been categorically held that the expression "to take the necessary measures" in sub-section (6) of section 11 intended to mean that the Chief Justice or the person designated by him should make the appointment himself having regard for considerations likely to secure an independent and impartial arbitrator and not merely order the recalcitrant party or appointing authority to act. The second ground of opposition to appointment of arbitrator in this case is thus squarely covered by the above decisions against the respondents.

(3.) SO far as the first ground is concerned, the submission of Mr. Mohta, learned Counsel for the respondents is that there being no time limit in the arbitration agreement for appointment of an arbitrator, the filing of the application under sub-section (6) of section 11 of the Act after the expiry of thirty days cannot preclude the respondents from appointing an arbitrator in terms of the arbitration clause even after the filing of the application. Miss Munim, learned Counsel for the petitioner, on the other hand, submits that the appointment after the filing of the application is no appointment in the eye of law. According to her, after filing of this application, the respondents cannot appoint the arbitrator. It can be done only by the Chief Justice or a person designated by him.