Rakesh VIJ vs State Of Himachal Pradesh And Others

Mohammad Rafiq, CJ

The petitioner is before this Court in this petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’), seeking for appointment of an Arbitrator to resolve the dispute that has arisen between the parties.

It is the case of the petitioner, who is a Government Contractor, that there was an agreement (Annexure P-2), between the petitioner and the respondents and accordingly a contract was entered into between the parties in respect of work “providing Sewerage System to Solan Town (SH: Improvement & Up gradation of 2.90 MLD STP by Designing and Supplying and Fixing of Tube settler in the existing clarifier of Sewerage Treatment PlanT Solan in Tehsil and Distt. Solan, H.P”. The expenditure to be incurred for completion of the aforesaid work was approximately to the tune of Rs. 18,94,698/-. Under Clause 25 of the aforesaid Agreement, the parties are required to refer all disputes to the sole arbitrator to be nominated and appointed by the Chief Engineer I&PH Department (South Zone), Shimla. The notice for appointment of Arbitrator was served upon I&PH Department (Sourth Zone), Shimla vide Annexure P-3, dated 20.08.2021. The Chief Engineer, (I&PH) Department (South Zone), Shimla, after lapse of thirty days period appointed Superintending Engineer (Arbitration) HP PWD, Solan as Arbitrator. According to the petitioner, the appointment of the aforesaid Arbitrator was against the provisions of Section 12(5) of the arbitration and Conciliation Act, 1996. He objected to the appointment of the aforesaid Arbitrator. The said Arbitrator failed to even enter into reference and initiate the Arbitration Proceedings. Thus, the petitioner was left with no other remedy but to invoke arbitration clause for redressal of his grievances. Clause 25 of the Agreement provides for appointment of an Arbitrator.

Notice of the petition was served upon the respondents. However, they did not file reply to the petition, but the learned Additional Advocate General submits that he has no objection, if an Arbitrator is appointed.

Having regard to the submissions taken note of, it is found: (i) that it is not disputed that there exists an arbitration clause in the Arbitration Agreement (Annexure P-2) between the parties; (ii) that certain disputes arose between the parties and, therefore, the existence of dispute is not doubted; (iii) that the petitioner invoked the arbitration clause calling upon the respondents to refer the dispute to the arbitrator; and (iv) that the respondents have failed to act in accordance with the agreed procedure in the arbitration agreement to refer the dispute to the arbitrator.

Under these circumstances, it is a fit case for making a reference to an independent arbitrator and this application deserves to be allowed and the dispute referred to arbitration.

Accordingly, Mr. J.N. Barowalia, District and Sessions Judge (Retd.), Barowalia’ North Bank Estate, Below Kali Bari Temple, Shimla, is appointed as an Arbitrator, after his disclosure in writing is obtained in terms of Section 11(8) of the Act and only after receipt thereof, shall his appointment, as an Arbitrator, come into force.

On his giving consent to arbitrate the dispute between the parties, as an Arbitrator, Mr. J.N. Barowalia, District and Sessions Judge (Retd.), shall enter into reference and shall pass an award in accordance with law. Copy of this order be forwarded to the learned counsel for the parties, as also to the learned Arbitrator. The learned Arbitrator so appointed shall be entitled to fee as per stipulation contained in 4th Schedule appended to the Arbitration and Conciliation Act, 1996.

The arbitration petition is disposed of accordingly, so also pending miscellaneous application(s), if any.