A.B. Singh vs Central Coalfields Ltd.

Balasubramanyan , C.J.—With the consent of the parties, since the same question was involved and the parties were the same, A.A. No. 28 of 2003 was also brought up to be heard and disposed of along with these cases.

These applications are u/s 11(6) of the Arbitration and Conciliation Act, 1996. According to the petitioner, Clause 95 of the contract provided for arbitration and though the petitioner raised the claim for arbitration as envisaged by Clause 95 of the contract, the respondents did not respond or make a reference as contemplated and consequently, the petitioner was constrained to approach this court. In the counter affidavit, originally filed, the respondents submitted that attempts were being made to settle the dispute. Subsequently, it was submitted that the matter could not be settled and consequently the respondents are ready to appoint Director Technical, Project & Planning Division, Central Coalfields Limited, Ranchi, who had no connection with the present work, as the Arbitrator.

Learned counsel for the petitioner submitted that the respondents should not be permitted to appoint an Arbitrator in terms of Clause 95, since they had lost the right to name the Arbitrator in view of the fact that the respondents did not respond on demand being made or make a reference as contemplated and hence it was for this Court to appoint an Arbitrator. Counsel submitted that pending the proceedings, some penalty has been imposed, which created an apprehension in the mind of the petitioner that unless there is an independent Arbitrator appointed, he may not get justice. This submission of the petitioner is sought to be met by counsel for the respondents by pointing out that in terms of Clause -95, the matter had to be referred to the Director Technical, Project & Planning Division, Central Coalfields Limited, Ranchi for decision and that is what is proposed to be done by the respondents. There is no room for any apprehension in the mind of petitioner. It is also pointed out that the respondents have themselves raised a counter claim against the petitioner.

On a reading of Clause -95 of the agreement between the parties, I find that the parties agreed that all the disputes arising out of the contract shall be referred to the Director Technical, Project & Planning Division, Central Coalfields Limited, Ranchi and the decision of the Director shall be final and binding on the contractor. Therefore, this is a case where the contract itself fixed the Arbitrator as the Director Technical. Now, what the respondents have submitted is that they are willing to appoint the Director Technical, Project & Planning Division, Central Coalfields Limited, Ranchi, as the Arbitrator in terms of Clause -95. In the light of the contractual provision, regarding arbitration, I am of the view that this is not a case where the Chief Justice should even at the first instance appoint an Arbitrator on his own. It is really a case of ensuring that the arbitration clause agreed upon between the parties is implemented in the first instance and only on the failure of the parties to do so, this Court should exercise its jurisdiction u/s 11(6) of the Act to appoint an independent Arbitrator.

Though, counsel for the petitioner sought to argue that a serving officer of the Company cannot be appointed as an Arbitrator and even a retired officer of the Company can be appointed as an Arbitrator, I am not satisfied that there is any justification to accept that argument. After all, the parties were at arm''s length and they entered into the agreement and under Clause -95, named the Arbitrator to settle the dispute between the parties. I am, therefore, satisfied that it will not be improper to accept the suggestion made by the respondents and to appoint the Director Technical, Project & Planning Division, Central Coalfields Limited, Ranchi as the Arbitrator in terms of Clause-95 of the Contract, to arbitrate upon all the disputes between the parties. Though, the Company has offered to appoint the Director Technical, Project & Planning Division, Central Coalfields Limited, Ranch, as the Arbitrator to arbitrate upon all the disputes between the parties, I think it appropriate to appoint the Director Technical, Project & Planning Division, Central Coalfields Limited, Ranchi as the Arbitrator in this proceeding itself, so that the Arbitrator can enter upon the reference at the earliest and render his Award without delay. The Arbitrator obviously has the duty to consider the claim and the counter claim of the respective parties, including the claim regarding anything that might have been done by the Company pending these proceedings.

These applications are, therefore, allowed to the extent of appointing the Director Technical, Project & Planning Division, Central Coalfields Limited, Ranchi, as the Arbitrator to arbitrate upon all the disputes arising between the parties, involved in these cases. The Arbitrator will enter upon the reference at the earliest and will under his Award within nine months of entering the reference.