Sabita Engineering Works vs Eastern Railway

The Court : This is an application under section 11(6) of the Arbitration and Conciliation Act, 1996, as amended by Act 3 of 2016 (in short,

“the Act of 1996â€) for appointment of the arbitral tribunal to adjudicate the disputes relating to the agreement dated April 1, 2013 between the

present petitioner and the respondent railway. The terms of the contract between the parties are also governed by those provided in the Standard

General Conditions of Contract, 2004 of the respondent Railway (hereinafter referred to “the GCCâ€​).

 There is no dispute between the parties with regard to the arbitration agreement contained in clauses 64(1) and 64(3)(a)(ii) of the GCC issued by

the respondent. In the event of any failure on the part of the General Manager of the respondent to decide the disputes relating to the contract

between the parties, the same are to be adjudicated by an arbitral tribunal.

From the records it is appears that in terms of clause 63 of the GCC, by a letter dated February 22, 2017 the petitioner called upon the General

Manager of the respondent to consider its claim on account of outstanding dues of Rs.25,70,736/-, together with interest at the rate of 18% per annum

from May 15, 2014 but, the General Manager did not decide such claim of the petitioner.

Therefore, in exercise of its rights under clause 64(3)(a)(ii) of the GCC the petitioner by its letter dated August 2, 2017 called upon the General

Manager of the respondent, as the appointing Authority, to appoint the arbitrators for adjudication of its claims, against the respondent. The said letter

was received by the General Manager of the respondent on August 4, 2017 but till this date, the latter has not appointed any arbitrator to adjudicate

the claim of the petitioner.

In such circumstances, the petitioner has filed this application under Section 11(6) of the Act of 1996. In the present case, when there is no dispute

between the parties with regard to arbitration agreement, in view of sub-Section (6A) of Section 11 of the Act of 1996 this application should be

allowed. This view is fortified by the decision of the Supreme Court in the case of M/s. Duro Felguera, S.A. â€"vs.- M/s. Gangavaran Port Ltd.

reported in 2017 (12) SCALE 433.

For the reasons as aforesaid, I find that the present application of the petitioner should be allowed. However, a suggestion was made on behalf of the

petitioner that in stead of appointing thee arbitrators as contemplated in the arbitration agreement between the parties, a sole arbitrator be appointed to

adjudicate the disputes between the parties. Ms. Banerjee appearing for the respondent Railway prayed for an accommodation to take 3 instruction, if

the respondent Railway is agreeable to the proposal of the petitioner for appointment of the sole arbitrator.

Let this application appear in the list on May 8, 2018. In the meantime, Ms. Banerjee will take appropriate instruction from the respondent.