Jaguar Overseas Limited vs Union Of India & Another

Vipin Sanghi, CJ

1) Despite repeated opportunities, no reply has been filed. Right to file reply of the respondents stand closed.

2) The applicant has preferred the present application under Section 11(6) of the Arbitration and Conciliation Act, to seek appointment of a sole Arbitrator to adjudicate the disputes which have arisen between the parties under their agreement contained in Contract Agreement No. CEB/PGH/45/ on 2022-12 : Provn of MAP Project (Phase I, II & III).

3) The case of the applicant is that the applicant was awarded the said contract which had to be executed within a period of 25 months. However, on account of certain alleged delay and defaults attributed to the respondents, the work under the contract was completed on 25.07.2019, after a delay of almost 41 months. The applicant attributes this delay to the respondents. The applicant claims that on account of additional / extra work, and on account of the delay, the applicant has several outstanding claims against the respondents. The agreement contains an arbitration agreement in Clause 70, under which all disputes between the parties to the Contract (other than those for which the decision of the C.W.E. or any other person is by the contract expressed to be final and binding) shall, after written notice by the party to the Contract to the other of them, be referred to sole arbitration of a service officer of the respondent to be appointed by the authority mentioned in the tender document. The applicant invoked the arbitration agreement on 15.06.2021, enlisting its claims and seeking appointment of an Arbitrator. However, no Arbitrator was appointed by the respondent, and consequently, this application has been preferred.

4) As aforesaid, no reply has been filed by the respondents, despite repeated opportunities.

5) The submission of learned counsel for the respondents is that under the terms of the arbitration clause, only a serving Officer of the respondent could be appointed as an Arbitrator, who has the requisite degree in Engineering, or equivalent, or who has passed final / direct final Examination of sub-division II of Institution of Surveyor (India) recognized by Government of India.

6) This submission of the respondents has no merit for the reason that under Section 12(5) read with the Seventh Schedule, notwithstanding the agreement of the parties to the contrary, the appointment of an Arbitrator, who is an employee, consultant, advisor or who has in the past or present, or who has had in the past or present, business relationship with a party, is barred from being appointed as an Arbitrator. Therefore, an employee of the respondent can possibly not be appointed as an Arbitrator.

7) Since the respondent has not appointed the Arbitrator before the filing of this Application, the right of the respondent to now appoint the Arbitrator stands forfeited.

8) In the light of the aforesaid, I allow this Arbitration Application application, and appoint Mr. Justice Pradeep Nandrajog, Retd. Chief Justice, Bombay High Court, to act as a sole Arbitrator to adjudicate all claims and counter-claims between the parties arising out of the aforesaid agreement.