S.K.Sarawagi & Co. Pvt. Ltd. vs Union Of India

The Court : In this application under Section 11(6) of the Arbitration & Conciliation Act, 1996, as amended by Act 3 of 2016 (in short, ""the Act of

1996""), the petitioner has prayed for appointment of the nominee Arbitrator for the respondent Railway, as well as the Presiding Arbitrator of the

arbitral tribunal.

Clause 16 of the said agreement dated December 5, 2007 contemplates that all disputes arising out of and relating to the said agreement shall be

referred to an arbitral tribunal comprising two Arbitrators, one to be appointed by each of the parties and the Presiding Arbitrator to be nominated by

the mutual agreement between the parties, failing which the Presiding Arbitrator shall be appointed in accordance with the provisions of the Act of

1996.

By a letter dated January 17, 2018 the petitioner invoked the said arbitration agreement for adjudication of its claim raised against the respondent

Railway and appointed a Senior Advocate of this Court as its Arbitrator. By the said letter the petitioner called upon the respondent to nominate its

Arbitrator. In response to the said notice under Section 21 of the Act of 1996, the respondent appointed one of its retired General Manager as the

nominee Arbitrator and forwarded a panel of four retired officers for selecting one of them as the Presiding Arbitrator. By a letter dated March 5,

2018 the petitioner selected Mr. Ranjan Tiwari, the retired FA & CAO of the respondent Railway as the third Arbitrator and the same was accepted

by the respondent Railway.

Subsequently, however, the said third Arbitrator passed away and by a letter dated May 2, 2018 the petitioner through its advocate, for the first time,

raised objection to the appointment of the retired General Manager of the respondent as an Arbitrator and proposed a Senior Advocate nominated by

them should be appointed as the sole Arbitrator or in the alternative, the respondent should choose and nominate an Arbitrator in accordance with the

amended provisions of the Act of 1996.

By a letter dated June 26, 2018 the respondent informed the petitioner due to the demise of Mr. Ranjan Tiwari the petitioner may choose one of the

retired railway officers mentioned therein as the Presiding Arbitrator. In this application the petitioner has claimed that the appointment of the retired

General Manager of the respondent Railway as its nominee Arbitrator is violative on the grounds mentioned in Schedules 5 and 7 of the Act of 1997.

Mr. Mishra, learned counsel appearing for the respondent Railway, however, produced an instruction in writing from the concerned officer of the

Railway that the said General Manager who has been nominated by the respondent as its Arbitrator had retired from service on August 31, 2013.

Thus, as held by this Court by the judgment dated August 30, 2018 in AP No.1075 of 2017 (Dibyendu Bose â€"versus- South Eastern Railway &

Anr.) when the Arbitrator nominated by the respondent Railway had retired from the service of Railway three years before the date of his

appointment, there is no infirmity in the appointment of the nominee Arbitrator of the respondent Railway. Nothing was submitted on behalf of the

petitioner to point out any infirmity in the said decision of this Court in the case of Dibyendu Bose (supra).

So far as the appointment of the third Arbitrator, that is, the Presiding Arbitrator from a reading of the Clause 16 of the said agreement dated

December 5, 2007 it is evident that the Presiding Arbitrator can be appointed either by the mutual agreement between the parties or in accordance

with the provisions of the Act of 1996. In the present case, the parties have failed to agree to the appointment of the Presiding Arbitrator.

Accordingly, Justice Bhaskar Bhattacharyya, Former Chief Justice of Gujarat High Court is appointed as the Presiding Arbitrator of the arbitral

tribunal for adjudication of the disputes between the parties herein. At this juncture, it is contended by Mr. Mishra that the claim of the petitioner in the

arbitral proceeding is hopelessly barred by limitation. In view of the provisions contained in Sub-section(6A) of Section 11 of the Act of 1996, such

point raised by the petitioner cannot be decided by this Court and the same shall be decided by the arbitral tribunal.

In the present case, the appointment of the Arbitrators shall be deemed to have been made in compliance with all requirements of the Act of 1996

including the Fifth, Sixth and Seventh Schedule thereof. The learned Arbitrators will be free to fix his remuneration and to engage the necessary

secretarial staff for conducting the arbitral proceeding. The fees of the learned Arbitrators and the remuneration of the secretarial staff shall be borne

by the parties in equal share. With the above directions, AP No.584 of 2018 stands disposed of. There shall, however, be no order as to costs. Urgent

certified website copies of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.