M/s. United Transport vs The General Manager, The Chief Administrative Officer (Construction), Dy. Chief Engineer (West)(Construction) South Western Railway and The Executive Engineer (West)(Construction) South Western Railway

H.N. Nagamohan Das, J.—Petitioner entered into a contract with the respondents on 18.07.2007 as per Annexure-P2 for transportation of sleepers. Since the respondents committed breach of agreement, petitioner invoked arbitration clause 64(3)(a)(i) of the agreement and got issued a notice on 24.09.2011 as per Annexure-P7. Respondents by their reply dated 16.11.2011, Annexure-P8 refused to give consent for appointment of Arbitrator. Therefore, the petitioner is before this court. The agreement between the parties as per Annexure-P2 is not in dispute. This agreement provides for appointment of arbitrator under clause 64(3). Since the claim of petitioner is more than Rupees ten lakhs they demanded the respondents as per their notice, Annexure-P7 dated 24.09.2011 for appointment of arbitrator. Now that respondents have denied for appointment of an arbitrator, it is necessary for this court to appoint an arbitrator in terms of clause 64(3)(a)(ii) which reads as under:

In case not covered by Clause 64(3)(a)(i), the Arbitral Tribunal shall consist of panel of three Gazetted Railway officers not below, JA grade or two Railway gazetted Officers not below JA grade and a retired Railway Officer, retired not below the rank of SAG Officer, as the arbitrators. For this purpose, the Railway will send a panel of more than 3 names of Gazetted Railway Officers of one or more departments, of the railway which may also include the name (s) of retired Railway Officer (s) empanelled to work as Railway Arbitrator to the Contractor within 60 days from the day when a written and valid demand for arbitration is received by the General Manager. Contractor will be asked to suggest to the General manager atleast 2 names out of the panel for appointment as the Contractors nominee within 30 days from the date of despatch of the request by Railway. The General manager shall appoint atleast one out of them as the Contractor''s nominee and will, also simultaneously appoint the balance number of arbitrators either from the panel or from outside the panel, duly indicating the "Presiding Arbitrator" from amongst the 3 Arbitrators so appointed. General Manager shall complete the exercise of appointing the Arbitral Tribunal within 30 days from the receipt of the names of contractor''s nominees. While nominating the arbitrators it will be necessary to ensure that one of them is from Accounts Department. An Officer of Selection Grade of the accounts Department shall be considered of equal status to the officers in SA grade of other Departments of the railways for the purpose of appointment of arbitrators.

For the reasons stated above, the following:

ORDER

i) Petition is hereby allowed.

ii) Respondents are hereby directed to suggest more than three names of gazetted railway officers as arbitrators within a time frame of 60 days from the date of receipt of copy of this order.

iii) Out of the names suggested by the respondent railways, petitioner is entitled to nominate two arbitrators and one by the railways. In turn these three arbitrators to conduct the proceedings as per the arbitration clause provided under the agreement and to adjudicate the dispute between the parties arising out of the contract dated 18.7.2007.