Som Datt Builders Pvt. Ltd. vs Chief Engineer (PSRSP)

Sanjay Kishan Kaul, C.J.

CM No. 23289 of 2013

Leave is granted to place on record reply of the respondent and application is allowed.

Arbitration Case No. 135 of 2013

The disputes inter-se the parties arise out of a contract dated 20.08.2007 for upgradation of Ludhiana-Malerkotla-Sangrur Road. It is

undisputed that the agreement inter-se the parties contains arbitration clause 20.6 which reads as under:-

Claims Disputes and Arbitration

20.6 Arbitration: Substitute sub paragraph (a) with the following:-

(a) A dispute with an Indian Contractor shall be finally settled by arbitration in accordance with the Arbitration & Conciliation Act, 1996, or any

statutory amendment thereof. The arbitral tribunal shall consist of 3 (three) Arbitrators, one each to be appointed by the Employer and the

Contractor. The third Arbitrator shall be chosen by the two Arbitrators so appointed by the Parties and shall act as Presiding Arbitrator. In case of

failure of the two Arbitrators, appointed by the parties to reach upon a consensus within a period of 30 days from the appointment of the arbitrator

appointed in the last, the Presiding Arbitrator shall be appointed by the Appointing Authority as specified in the Bid Data Sheet. For the purposes

of this Sub Clause, the term ""Indian Contractor"" means a Contractor who is registered in India and is a juridical person created under Indian law as

well as a joint venture between such a Contractor and a Foreign contractor.

In case of a dispute with a Foreign contractor, the dispute shall be finally settled in accordance with the provisions of the UNCITRAL Arbitration

Rules. If agreed to by both the parties, the disputes shall be settled in accordance with the Arbitration & Conciliation Act, 1996 or any statutory

amendment thereof. The arbitral tribunal shall consist of three Arbitrators, one each to be appointed by the Employer and the Contractor. The third

Arbitrator shall be chosen by the two Arbitrators so appointed by the parties and shall act as Presiding Arbitrator. In case of failure of the two

Arbitrators appointed by the parties to reach upon a consensus within a period of 30 days from the appointment of the Arbitrator appointed in the

last, the Presiding Arbitrator shall be appointed by the Authority specified in the Bid Data Sheet. For the purposes of this Sub Clause, the term

''Foreign Contractor'' means a Contractor who is not registered in India and is not a juridical person created under Indian Law.

In view of the disputes having arisen inter-se the parties, the arbitration clause was invoked. The petitioner appointed Shri I.M. Singh as their

nominee Arbitrator while the respondent appointed Shri G.S. Mann, as their nominee Arbitrator. Two Arbitrators thereafter met to appoint the

Presiding Arbitrator but there was no agreement in respect of the same, with the result Shri I.M. Singh addressed a communication to both the

parties stating that since they had not been able to reach the consensus on the name of the Presiding Arbitrator, the parties were requested to take

further action for appointment of Presiding Arbitrator as per terms of the contract agreement.

It has already been noticed that in terms of Clause 20.6 the Presiding Arbitrator was to be appointed by the Appointing Authority as specified in

the ''Bid Data Sheet''. Unfortunately, in the Bid datasheet, there is no ''Appointing Authority'' prescribed, an undisputed position. This left the

parties to only option to approach this Court. However, it appears that the respondent sought to appoint Shri Pawitter Singh Walia, Chief

Engineer, as the Presiding Arbitrator ostensibly on the plea that though the term of the ''Appointing Authority'' has not been specifically defined in

the Bid data-sheet, but as a natural consequence ''Appointing Authority'' would mean the Employer and in the instant case the Governor of Punjab

is the Employer. This is infact the sole plea which has been set up by the respondent.

I am unable to accept the plea urged on behalf of the respondent for the reason that it runs contrary to the terms of the contract. If the contract

has not been properly drawn and there is a vacuum left qua the issue of appointment of the Presiding Arbitrator, then the only option for the parties

is to approach this Court seeking appointment of the Presiding Arbitrator. The relevant clause is quite specific as in the arbitration clause it is set

out that it has to be the Appointing Authority ""as specified in the Bid data-sheet"". As noticed, there is no Appointing Authority specified in the Bid

data-sheet.

Accordingly, I appoint Justice M.S. Liberhan, retired Chief Justice of Andhra Pradesh High Court, # 81, Sector-9, Chandigarh, as the Presiding

Arbitrator to enter upon the reference and adjudicate upon the disputes between the parties.

Petition is accordingly allowed leaving the parties to bear their own costs.

The fee of the Arbitrator will be governed by the High Court Rules.

A copy of this order be sent to the Arbitrator without process fee.