Tilak Raj vs Chief Engineer (MZ), HP PWD Mandi & Another.

Vivek Singh Thakur J.

Present petition has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') for appointment

of a new independent Arbitrator to adjudicate upon the claim of the petitioner against the respondents arising out of agreement No. 198 of 2006-2007

entered upon between the parties to execute the work with respect to construction of link road from Manali Leh to village Marbal Km.0/0 to 6/700

package No. HP-07-02.

In the reply, respondents have controverted the plea of the petitioner, rather, have levelled counter allegations upon the petitioner regarding

executing the work without adhering to the terms and conditions of the agreement entered into between the parties.

It is undisputed that there is clause 25 in the agreement for referring the dispute arising out of the agreement for arbitration.

It is undisputed that to resolve the dispute between the parties, Mr. Kartar Singh, Engineer 1st Circle, HP PWD, Mandi, District Mandi was

appointed as Arbitrator vide order dated 2.9.2016 passed by this High Court in Arbitration Case No. 76 of 2016 and further that he has failed to

adjudicate the claims even during extended period granted to him and thereafter he has suspended the proceeding vide order communicated to the

parties vide letter dated 14.3.2018 (Annexure P-2) till further extension or substitution of Arbitrator by this High Court as per amended provisions of

Arbitration and Conciliation Act.

In reply, it is mentioned that the Arbitrator cannot finally adjudicate the dispute within stipulated period due to compelling climate condition of the

area, as the work under dispute could not be inspected and re-measured on the site on account of blockade of road due to heavy snow fall, as the

work site is situated in Lahaul valley and since November, 2017 till March, 2018, Rotang Pass, the gateway of the valley as well as site of work

remained under cover of snow, making it impossible to jointly inspect the site work to reconcile the work executed and payment made to the petitioner.

Section 29A (1) of the Act provides that the award by arbitral tribunal shall be made within a period of twelve months from the date the arbitral

tribunal enters upon the reference. Section 29A (3) provides further extension of period specified in sub section (1) for a period not exceeding six

months. Section 29A (4) provides that on failure to make the award within specified period under sub-section (1) or the extended period specified

under sub-section (3), the mandate of arbitrator(s) shall terminate unless the Court has, either prior to or after the expiry of the period so specified,

extended the period.

Section 29A (6) provides that at the time of extending the period referred in sub-section (4), Court may substitute one or all of the arbitrators and in

such case the arbitral proceedings shall continue from such stage already reached and on the basis of evidence and material already on record and the

newly appointed arbitrator shall be deemed to have received the said evidence and material and as per sub-section (7), the reconstituted arbitral

tribunal shall be deemed to be in continuation of the previously appointed arbitral tribunal and Section 29A (8) empowers the Court to impose actual or

exemplary costs upon any of the parties under this section and proviso to sub-section (4) of Section 29A provides reduction of fees of arbitrator(s) by

not exceeding five percent for each month of delay in making the award if it is found by the Court that the proceedings have been delayed for the

reasons attributable to the arbitral tribunal.

In present case, the explanation for causing delay is genuine and beyond the control of Arbitrator as well as the parties and therefore, further

extension of period as provided under Section 29A, deserves to be granted. However, in view of the provisions of Section 12 (5) of the Act and

Seventh Schedule, continuance of appointment of Superintending Engineer, 1st Circle, HPPWD, Mandi, as Arbitrator is not sustainable. Therefore,

parties have agreed for substitution of Arbitrator.

It is submitted by learned counsel for the parties that in identical dispute Hon’ble Mr. Justice Surinder Singh Thakur, Judge (retired) has been

appointed as Arbitrator in Arbitration Case No. 68 of 2017 and it would be convenient and beneficial to the parties to refer this dispute also to the

same Arbitrator.

Therefore, allowing the petition, with the consent of the parties, I appoint Hon'ble Mr. Justice Surinder Singh Thakur, Judge (retired), as an

Arbitrator by substituting the Arbitrator appointed earlier, with a direction to him to enter into reference within a period of two weeks from receipt of

this order and to make a reasoned speaking award in terms of arbitration agreement, in accordance with law, on the basis of material placed before

him during proceedings. Fee of learned Arbitrator shall be as per his entitlement as admissible in accordance with law.

Registry is directed to immediately supply copy of this order to Hon'ble Mr. Justice Surinder Singh Thakur, Judge (retired.)

Petition is allowed in the aforesaid terms.