Bidyut Das vs Union Of India & Ors

The Court:-This arbitration petition is for appointment of Arbitrator.

Mr.Dutt, learned advocate appears on behalf of petitioner in this arbitration petition for appointment of arbitrator. He draws attention to letter dated 6th September, 2017 written by Presiding Arbitrator informing that the Tribunal decided to terminate proceeding in terms of provision under sub-section (3) of section 32 in Arbitration and Conciliation Act, 1996. On query from Court Mr. Dutt submits, this was by reason of one of the arbitrators not being available. He then draws attention to letter dated 12th April, 2017 written by his client in response to respondents' request for waiver under sub-section (5) of section 12 to submit, his client did not waive. Hence, his client is before Court for appointment of arbitrator because agreed procedure has not been able to secure the appointment.

Ms. Banerjee, learned advocate appears on behalf of respondents and submits, there be appointed retired gazetted officers of Eastern Railway, for a panel of names she is ready with. She submits, this panel was not made over to petitioner since petitioner did not take any steps. She hands over the panel to Mr. Dutt.

She relies on judgment dated 3rd January, 2019 of Supreme Court in Civil Appeal 27 of 2019 (Government of Haryana Vs. G. F. Toll Road Pvt. Ltd.), paragraphs 3.9 to 3.11 therein. She submits, though in the case Supreme Court found pre-amended Arbitration and Conciliation Act, 1996 was applicable but observation made therein regarding of the Act not disqualifying a former employee from acting as arbitrator is what she is relying upon for constitution of arbitral tribunal accordingly. She also relies on judgment dated 30th August, 2018 of a learned single Judge of this Court in AP 1075 of 2017 (Dibyendu Bose Vs. South Eastern Railway) in which the learned Judge said, inter alia, as follows:-"In the case of TRF Ltd.(supra) relied by the petitioner, the arbitration agreement contemplated that all disputes between the parties thereto were to be referred to the sole arbitration of the Managing Director of the respondent or his nominee. Disputes having arisen between the parties and the appellant invoking the arbitration clause, the Managing Director of the respondent referred the same for arbitration to his nominee. In those facts of the said case, the Supreme Court held that when in view of the prohibitions contained in the clauses of the Fifth and Seventh Schedule of the Act of 1996 (which are already quoted above) when the Managing Director of the respondent could not have himself act as the arbitrator he also lacked the authority in law to nominate an arbitrator. However, in the facts of the present case when the General Manager of the respondent railway is not to act as the arbitrator, the said decision of the Supreme Court in the case of TRF Ltd.(supra) has no application. It is settled law that judgments should not be read as statutes. A decision is an authority for which it decided and not what can logically deduced therefrom. It is also well settled that a little difference in facts or additional facts may make a lot of difference in precedential value of a decision.

For all the foregoing reasons, I do not find any merit in this application and the same stands rejected."

In reply Mr.Dutt submits, in G.F. Toll Road (supra) arbitration agreement between parties therein was extracted in paragraph 2.2. the extract therein is reproduced below:-

"39.2 Arbitration

39.2. 1. Any dispute which is not resolved amicably as provided in Clause 39.1 shall be finally decided by reference to arbitration by a Board of Arbitrators, appointed pursuant to Clause 39.2.2. sub-clause (b) below. Such arbitration shall be held in accordance with the Rules of Arbitration of the Indian Council of Arbitration and shall be subject to the provisions of the Arbitration Act.

39.2. 2. There shall be a Board of three arbitrators of whom each party shall select one and the third arbitrator shall be appointed in accordance with the Rules of Arbitration of the Indian Council of Arbitration."

Drawing attention to above extracted arbitration agreement he submits, that agreement did not mandate constitution of the tribunal to include an employee or departmental person. Arbitration clause applicable between parties herein mandates constitution of the Tribunal to have two railway gazetted officers and a retired railway officer. His client wants a Court appointed arbitrator. Such submission is also with reference to Dibyendu Bose (supra).

Facts and circumstances in this case do not invite application of provisions in sub-section (6) of section 11. The appointment procedure worked for purpose of tribunal being appointed. However, presiding arbitrator in the tribunal terminated its mandate on one of appointee arbitrators not being available. So petitioner's request for appointment of arbitrator must be seen as one made pursuant to mandate of the tribunal being terminated and therefore substitution sought. Prayer made in the petition is reconstitution of arbitral tribunal by substitute arbitrators with direction upon appointees to make disclosure required by section 12.

Sub-section (2) in section 15 requiring substitute arbitrator(s) being appointed according to rules that were applicable cannot be resorted to since agreed appointment procedure has resulted in constitution of a panel which could not work. Hence, it needs to be seen whether provisions in sub-sections (2), (3) and (4) in section 11 stand attracted. On failure of agreed procedure, respondents have suggested a panel of names, copy of which has been made over to Mr. Dutt in Court, yet Mr. Dutt's submissions stand recorded above, of his client wanting a Court appointed arbitrator. In the circumstances, the request must be dealt with in a situation where the appointment procedure has failed and there is no other means for securing the appointment.

Retired Justice Tapan Kumar Dutt is appointed arbitrator. Arbitrator shall fix his own fees. Parties will bear in equal share remuneration of arbitrator as well as attendant costs.

Arbitration Petition (AP 13 of 2019) is disposed of.