COBRA-CIPL JV Vs. CHIEF PROJECT MANAGER

JUDGEMENT

(1.) This miscellaneous petition under Article 227 of the Constitution, is directed against the order of the Commercial Judge, Jabalpur dated 10th of September, 2020 passed in MJC(AV)36/2020 whereby the petitioner's application under Section 14 of the Arbitration and Conciliation Act, 1996 (for short 'the Act' ) has been dismissed.

(2.) The case of the petitioner is that it had entered into a contract with the respondent for Composite Electrical Work for Design, Supply, Erection, Testing and Commissioning of 25 KV, 50 Hz, AC Single Phase Electrification Works of Jabalpur Division of West Central Railway. In 2015, major setback in the progress of work was suffered and thereafter the termination notice dated 12.02.2019 was issued by the respondent and steps were taken for invoking the bank guarantee for which separate proceedings under Section 9 of the Act were initiated. Since the dispute had arisen between the parties, therefore, the petitioner had given the legal notice dated 06.08.2019 invoking the arbitration clause and making a request to the respondent to appoint Mr. Justice (Retd.) D.M. Dharmadhikari, Former Judge, Supreme Court of India as sole Arbitrator and; in the alternatively to appoint Justice (Retd.) Usha Mehra, Former Judge, Delhi High Court in terms of Arbitration clause 1.2.54 (d)(ii) of the agreement. Thereafter, the email dated 23.08.2019 was sent by the Chief Project Director to the petitioner's Advocate intimating that the notice was addressed to wrong officer. The petitioner on 26.08.2019 had given the reply and had separately sent the notice addressed to General Manager, CORE, Allahabad. On 16.09.2019, the respondent wrote to the petitioner asking for consent to waive off applicability of Section 12(5) of the Act. On 25.09.2019, respondent wrote a letter to the petitioner asking the petitioner to appoint any two out of the panel of four names forwarded by it as petitioner's Arbitrator. Thereafter, on 05.10.2019, the petitioner filed an application under Section 11(4) of the Act as the respondent had failed to appoint the Arbitrator inspite of petitioner's notice for appointment. The respondent appeared before the High Court on 01.11.2019 in AC No.96/2019 filed under Section 11 of the Act. On 19.11.2019, the General Manager of the Central Organisation for Railway Electrification appoint the Arbitral Tribunal consisting of the retired employees belonging to the Ministry of Railways and Arbitral Tribunal so constituted had passed the order dated 28.11.2019 directing the parties to file their pleadings. The petitioner objected to the constitution of the Arbitral Tribunal and; thereafter, he had filed an application under Section 14 of the Act before the trial Court on 22.07.2020 seeking to terminate the mandate of the Arbitrator. The Tribunal by the impugned order has dismissed the said application.

(3.) Submission of learned counsel for the petitioner is that in terms of Section 12(5) r/w Section 14 of the Act, the retired employees of the Railways appointed as Arbitrator have de jure become ineligible to conduct the arbitration, hence their mandate ought to have been terminated by the Tribunal. In support of his submission, he has placed reliance upon the judgment of the Supreme Court in the matter of Perkins Eastman Architects DPC and another vs. HSCC (India) Ltd.,2019 SCCOnLineSC 1517 and in the matter of Bharat Broadband Network Limited vs. United Telecoms Limited , 2019 5 SCC 755.