Industrial Gases Limited @APPELLANT@Hash Hindustan Zinc Limited

This application has been filed under Sections 11, 14 and 15 of the Arbitration and Conciliation Act, 1996 (‘the Act, 1996’) with a prayer for

filling up the vacancy of arbitrator in the arbitral tribunal.

It is inter alia indicated that the parties entered into an agreement dated 10/9/1996 which was extended from time to time and finally terminated in

December, 2000 when the dispute arose and the matter was referred to arbitration.

Though, the arbitral tribunal consisting of 03 arbitrators was constituted, however, due to vacancy of presiding arbitrator, the petitioner filed an

application under Section 11 of the Act, which was decided on 7/4/2006, whereby, the presiding arbitrator was appointed. Subsequently, S.B.Civil

Misc. Arbitration Application no. 37/2008 was filed, which was decided on 8/11/2013 and the presiding arbitrator was substituted by Mr. Sunder Lal

Mehta, a Retired District Judge.

Whereafter, the presiding arbitrator consented to preside with two already appointed arbitrators, Mr. Akhilesh Shukla and Mr.L.R.Garg. Thereafter,

Mr. L.R.Garg resigned and in his place Mr. Santosh Sharma was nominated by the applicant, whereafter, on 20/9/2014 Mr. Santosh Sharma also

expressed his inability to continue as arbitrator, and applicant nominated Mr. Shiv Garg as arbitrator, which was objected to by the respondent,

however, the arbitral tribunal decided to continue with the proceedings.

By letter dated 1/7/2017, Mr. Akhilesh Shukla, arbitrator nominated by the respondent resigned, however, on his resignation as the respondent failed to

nominate another arbitrator, the presiding arbitrator adjourned the matter.

It is inter alia indicated that despite passage of over three months since the arbitrator nominated by the respondent has resigned, no fresh arbitrator

has been nominated and, therefore, present application has been filed seeking appointment of arbitrator to fill up the vacancy arising due to resignation

of Mr. Akhilesh Shukla.

The application has been responded to by the respondent inter alia with the averments that the claim filed by the applicant company before the arbitral

tribunal is based on concealment of vital facts. Further submissions have been made that on account of conduct of the applicant, the application is

liable to be dismissed.

Learned counsel for the applicant submitted that once the arbitral tribunal was constituted and on account of the fact that arbitrator nominated by the

respondent has withdrawn from the office/resigned for any reason, it was incumbent on the respondent to nominate another arbitrator and once it has

failed in doing so, the arbitrator needs to be appointed by this Court.

Learned counsel for the respondent submitted that the manner in which the arbitration proceedings are going on, it is apparent that the applicant is not

interested in proper conduct of arbitration proceedings. Allegations have been made about incompetence of Mr. Shiv Garg, arbitrator nominated by the

applicant and that objections raised by the respondent in this regard are also pending before the arbitral tribunal. However, without prejudice it was

submitted that instead of nominating a fresh arbitrator to the existing arbitral tribunal, a sole arbitrator may be appointed or in the alternative it was

suggested that some retired judicial officer may be appointed as an arbitrator on the arbitral tribunal to fill up the vacancy.

Learned counsel for the applicant opposed the submissions made with regard to appointment of sole arbitrator. It was submitted that arbitration

proceedings have to proceed in terms of Section 15(2), (3) and (4) of the Act, 1996.

I have considered the submissions made by learned counsel for the parties and have perused the material available on record.

The facts of the case present a chequered history, wherein, over a period of about 13 years, the proceedings in arbitration are hanging fire wherein

twice the presiding arbitrator has been replaced and arbitrator nominated by the applicant has been changed twice and now the arbitrator nominated

by the respondent has resigned. The manner in which the matter has proceeded apparently frustrate the very purpose of resolving the dispute through

arbitration.

Be that as it may. Once the arbitrator nominated by the respondent to the arbitral tribunal has resigned, it was incumbent on the respondent to

nominate an independent arbitrator in view of the present status of provisions of the Act, 1996, as amended in the year 2015, however, the respondent

chose not to fill the vacancy in the arbitral tribunal.

The provisions of Section 15 (2) and (3) of the Act clearly envisage that where the arbitrator withdraws from the office, a substitute arbitrator has to

be appointed according to the rules that are applicable to the appointment of arbitrator being replaced and on failure to nominate the arbitrator in

terms of arbitration clause, the present application has been filed.

Though the respondent has sought to raise objection pertaining to merit of the claim and the conduct of arbitration proceedings including the objection

raised about the competence of the arbitrator nominated by the applicant, the said aspect cannot be made subject matter of the present proceedings.

In view of the fact situation noticed hereinbefore, the application filed by the applicant is allowed. Mr. Gorverdhan Singh Surana, Retired District

Judge, resident of 36/108, Panchwati, Udaipur (Mobile No.9413330831) is appointed as arbitrator to arbitral tribunal pertaining to the dispute between

the parties. The appointment is subject to the necessary disclosure being made under Section 12 of the Act. The respondent would be free to raise all

the objections/pursue pending objections pertaining to arbitration proceedings, as noticed hereinbefore.