Mr. Lovkesh Sawhney, Senior Advocate with Mr. Kartik Dhingra and Mr. Rohit Kumar, Advocates v. M/S SJVN LIMITED

Judgment

1. The present petition has been filed under Section 14 read with Section 15 of the Arbitration and Conciliation Act, 1996 (hereinafter ‘Act’) seeking the following reliefs:- i. Terminate the appointment and mandate of the allegedly

illegally appointed Presiding Arbitrator namely Shri P. Umashankar, Signature Not Verified Digitally Signed By:VIVEK MISHRA Signing Date:04.11.2025 21:09:55 O.M.P. (T) (COMM.) 116/2024 Retd. IAS; and restrain him from discharging the functions of a Presiding Arbitrator and/ or cancel continuation of called/purported arbitration proceedings before Arbitral Tribunal presided by him and/or, ii. Direct both the Nominee Arbitrators to appoint Presiding Arbitrator, or In the alternative, iii. Appoint/Substitute any independent and impartial arbitrator to act as Presiding Arbitration for adjudication of disputes.

2. The necessary facts for deciding the present petition are as follows: 2.1. The disputes between the parties arose under Contract bearing no.3.0, which was signed between the parties on 24th June 1996.

2.2. The arbitration clause is Clause 67 of the General Clauses and Conditions (hereinafter ‘GCC’). In terms of the said arbitration clause, the Board of arbitrators was to be constituted by three (3) arbitrators, one (1) to be nominated by the Contractor, the second by the NJPC (SJVNL), and the third by the Secretary (Power), Ministry of Energy, Govt. of India.

2.3. The petitioner invoked the arbitration clause. The arbitration proceedings culminated in an Arbitral Award dated 11th January 2009, passed in favour of the petitioner.

2.4. The respondent challenged the aforesaid Arbitral Award under Section 34 of the Act in OMP(COMM) 170/2017 and by judgment dated 12th July 2023, the said Arbitral Award was set aside. 2.5. An appeal, being FAO(OS)(COMM) 214/2023, was preferred by Signature Not Verified Digitally Signed By:VIVEK MISHRA Signing Date:04.11.2025 21:09:55 O.M.P. (T) (COMM.) 116/2024 the petitioner under Section 37 of the Act, against the aforesaid judgment, which was dismissed by the Division Bench of this Court by judgment dated 20th February 2024, with liberty to the parties to initiate fresh arbitration.

2.6. Thereafter, the petitioner again invoked the arbitration clause and appointed its nominee arbitrator as Justice (Retd.) V.K. Gupta, (Former Chief Justice, State of Uttarakhand). The respondent appointed Justice (Retd.) Kuldeep Singh (Former Judge of the High Court of Himachal Pradesh) as its nominee arbitrator. 2.7. The respondent, relying upon the letter dated 21st November 2021 issued by the Ministry of Power, notified the appointment of the Presiding Arbitrator, namely Sh. P. Umashankar, Retd. IAS. 2.8. Both the nominee arbitrators raised the issue of the legality of the appointment of the Presiding Arbitrator by the respondent. By letter dated 17th July 2024, the respondent refused to change the Presiding Arbitrator.

2.9. In view of the aforesaid letter issued by the respondent, the nominee arbitrator appointed by the respondent, i.e. Justice (Retd.) Kuldeep Singh, (Former Judge of High Court of Himachal Pradesh) resigned as an arbitrator.

2.10. Subsequently, the respondent vide letter dated 18th September 2024, appointed Justice (Retd.) Kurian Joseph as its nominee arbitrator in place of its earlier nominee arbitrator, Justice Kuldeep Singh.

3. In these facts and circumstances, the petitioner has challenged the Signature Not Verified Digitally Signed By:VIVEK MISHRA Signing Date:04.11.2025 21:09:55 O.M.P. (T) (COMM.) 116/2024 appointment of the Presiding Arbitrator, Sh. P. Umashankar, Retd. IAS, by the respondent in the present proceedings. 4. Senior counsel appearing on behalf of the petitioner submits that the Ministry of Power holds a 60% shareholding in the respondent company and therefore, is an interested party. Therefore, the Presiding Arbitrator appointed by the respondent no.2 is barred to act as an arbitrator under the ‘Seventh Schedule’ read with Section 12 (5) of the Act. 5. Senior counsel for the petitioner submits that Clause 67 of the GCC allows only one party to appoint the Presiding Arbitrator, which is not permissible. He further submits that unilateral appointment of an Arbitrator/Umpire is not permissible in terms of the decision of the Supreme Court in Perkins Eastman Architects DPC v. HSCC (India) Ltd.1, and more recently in Lombardi Engg. Ltd. v. Uttarakhand Jal Vidyut Nigam Ltd.2, wherein Perkins (supra), was discussed, and it was held that the Court should proceed to appoint an independent arbitrator. 6. Mr. Uttam Datt, senior counsel appearing on behalf of the respondent no.1 submits that there has been a waiver on the part of the petitioner as per the proviso to Section 12(5) of the Act, inasmuch as the petitioner has accepted the appointment of the Presiding Arbitrator appointed by the Ministry of Power as per the arbitration clause. 7. In this regard, reliance has been placed on a communication dated 17th September 2021, sent by the petitioner, wherein the petitioner has acknowledged the fact that the Presiding Arbitrator has to be appointed by the Ministry of Power. It is submitted that the aforesaid communication was