JOHNY J.VILANGADAN v. THE GENERAL MANAGER, SOUTHERN RAILWAY & Ors.

RESPONDENTS' EXHIBITS: ANNEXURE-R1TRUE COPY OF PANEL OF ARBITRATORS SUBMITTED IN A.R.NO.42OF 2004. ANNEXURE-R2TRUE COPY OF LETTER DATED 7.1.2008 OF FIRST RESPONDENT TOTHE PETITIONER. ANNEXURE-R3TRUE COPY OF LETTER DATED 31.1.2008 OF THE FIRSTRESPONDENT TO THE PETITIONER.ANNEXURE-R4COPY OF THE LETTER DATED 6.2.2008 OF SECOND RESPONDENT TOTHE PETITIONER. ANNEXURE-R5TRUE COPY OF LETTER DATED 20.10.2009 OF THE FIRSTRESPONDENT TO THE PETITIONER.ANNEXURE-R6THE EXTRACT OF CLAUSES 63 AND 64 OF GENERAL CONDITIONS OFCONTRACT IN FORCE.ANNEXURE-R7TRUE COPY OF THE LETTER DATED 26.10.2009 TO THE PETITIONER. ANNEXURE-R8TRUE COPY OF LETTER DATED 10.11.2009 OF THE PETITIONER TOARBITRATOR. //TRUE COPY//AHZ/ K.T.SANKARAN, J.------------------------------------------------------ A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010------------------------------------------------------ Dated this the 11th day of July, 2012 O R D E RIn all these Arbitration Requests, the parties are the same andthe questions involved are identical. Therefore, these ArbitrationRequests were heard jointly and they are being disposed of by thiscommon order. The applicant and the first respondent entered intodifferent contracts and separate agreements were executed betweenthem. The agreements contain similar arbitration clause. Clauses64 (3)(a)(i) and 64(3)(a)(ii) read as follows:“64(3)(a)(i)--In cases where the total value of all claims inquestion added together does not exceedRs.10,00,000/- (Rupees Ten lakhs only), the ArbitralTribunal consist of a sole arbitrator who shall be eitherthe General Manager or a gazetted officer of Railwaynot below the grade of JA grade nominated by theGeneral Manager in that behalf. The sole arbitrationshall be appointed within 60 days from the day when awritten and valid demand for arbitration is received byRailway.” A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 2 ::“64(3)(a)(ii) -In cases not covered by clause 64(3) (a)(i), theArbitral Tribunal shall consist of a panel of threeGazetted Rly. Officers not below JA grade, as thearbitrators. For this purpose, the Railway will send apanel of more than 3 names of Gazetted RailwayOfficers of one or more departments, of the Railway tothe contractor who will be asked to suggest to GeneralManager upto 2 names out of the panel forappointment as contractor's nominee. The GeneralManager shall appoint at least one out of them as theContractor's nominee and will, also simultaneouslyappoint the balance number of arbitrators either fromthe panel or from outside the panel, duly indicating the'presiding arbitrator' from amongst the 3 arbitrators soappointed. While nominating the arbitrators it will benecessary to ensure that one of them is from theAccounts Department. An officer of Selection Grade ofthe Accounts Department shall be considered of equalstatus to the officers in SA grade of other departmentsof the Railways for the purpose of appointment ofarbitrators.”2. The arbitration clauses in the model agreement were A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 3 ::modified and there is some confusion with respect to theappointment of the arbitrator in cases where the total value does notexceed Rupees Five lakhs. It is stated that in A.R.Nos.36, 37 and 38of 2010, the contract amount involved is less than Rupees Fivelakhs. I do not think that this confusion would have any relevance indeciding these Arbitration Requests.3. According to the applicant, agreements were entered intoon 28.6.1995. The time stipulated for completing the work was30.11.2005. On 9.6.2004, the applicant made the final claims, whichwere received by the respondents on 11.6.2004. According to theapplicant, the works were completed within the extended time andamounts are due to him from the Southern Railway. The applicantmade Annexure A2 final claim dated 9.6.2004. Since the amountsclaimed by the applicant were not paid, he made a demand forresolving the dispute by arbitration (Annexure A3 dated 4.10.2004).Arbitrators were not appointed as per the request in Annexure A3.Therefore, the applicant filed A.R.Nos.41 to 47 of 2004 underSection 11(6) of the Arbitration and Conciliation Act. Therespondents raised a contention that the said Arbitration Requests A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 4 ::were premature. Arbitration Request Nos.41 to 47 of 2004 werelater withdrawn by the applicant.4. Thereafter, the applicant filed Arbitration Request Nos.4 to10 of 2005 under Section 11(6) of the Arbitration and ConciliationAct, which were disposed of as per Annexure A6 order dated21.3.2006. The operative portion of Annexure A6 order reads asfollows:“9. Having regard to the aforesaid circumstances,I am not inclined to grant the request as prayed for.However, if the applicant is willing to appoint any of thearbitrators named in the panel submitted by theRailways during the course of the proceedings beforethis Court in A.R.No.41/2004 and connected matters, ashis arbitrator, he may do so by informing the firstrespondent in these proceedings, in writing, with copy tothe Divisional Railway Manager, Southern Railway,Thiruvananthapuram by registered post, within a periodof a fortnight from today and if the applicant takes sucha course, the Railways will further do the needful interms of clause 64(3)(b) of the Arbitration Agreement.” A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 5 ::5. According to the applicant, he complied with Annexure A6order and nominated his nominee arbitrator from Annexure A5 panelgiven by the respondents. According to the applicant, though hecomplied with Annexure A6 order by issuing Annexure A7 letterdated 3.4.2006 nominating Sri.K.Masthan Rao from among the panelsubmitted by the Railways, Arbitral Tribunal was not constituted asdirected in Annexure A6 order. Therefore, the applicant filedA.R.Nos.30 to 36 of 2006 on 16.8.2006. After filing A.R.Nos.30 to 36of 2006, the Deputy General Manager/General for General Managerof Southern Railways issued Annexure A8 proceedings dated19.9.2006 constituting an Arbitral Tribunal. The Chief Justicedisposed of A.R.Nos.30 to 36 of 2006 by Annexure A9 order dated13.12.2006, the relevant portion of which reads as follows:“4. Counsel for the applicant vehementlycontends that even though Sri.K.Masthan Rao may beone of the persons in the panel for appointment ofArbitrator in the applications earlier made whichculminated into order dated 21st March, 2006, but theapplicant had a limited choice at that time as it was onlyfrom the panel an Arbitrator could be appointed, but the A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 6 ::respondents have now forfeited their right to appoint anArbitrator as, surely, such an appointment is made afterthe filing of these applications. Learned counsel reliesupon the decision of the Honourable Supreme Court inPunj Lloyd Ltd. v. Petronet MHB Ltd. [(2006) 2 SCC638]. Counsel further contends that once therespondents have forfeited their right to make anappointment of an Arbitrator, the applicant wouldcertainly seek appointment of an Independent Arbitratorand the very fact that Sri.K.Masthan Rao was named bythe applicant himself as an Arbitrator earlier was undercircumstances when the applicant had no other choice.5. There cannot be any exception to thecontention of the learned counsel for the applicant.There is indeed an arbitration clause in the agreementand the matter has to be referred to an Arbitrator. Forappointment of Arbitrator, there is no dispute. Once, therespondents have lost right to make appointment ofArbitrator, this Court would consider it appropriate tomake appointment of a former Judge of this Court asArbitrator. It is urged by the learned counsel for theRailways that an Engineer with M.Tech. Degree has tobe an Arbitrator because of the subject requiringexpertise of such a person. The Court only directs thatthe Arbitrator may seek assistance of an Engineer with A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 7 ::M.Tech.Degree. Sri.Justice R.Bhaskaran, former Judgeof this Court, residing at “Sreekrishna Kripa”, Kaloor,Kochi - 682 017 is appointed as Arbitrator.”6. Justice R.Bhaskaran entered upon the ArbitrationReference on 18.12.2006. It is contended that sixteen sittings wereconducted by him and the respondents participated in the arbitrationproceedings. In view of Annexure A9 order dated 13.12.2006appointing Justice R.Bhaskaran as the Arbitrator, the ArbitralTribunal constituted as per Annexure A8 proceedings dated19.9.2006 was terminated as per Annexure A10 proceedings of theArbitrators dated 30.4.2007.7. Thereafter in May 2007, the respondents filed S.L.P.(Civil)N0.14395 of 2007 before the Honourable Supreme Courtchallenging the order in A.R.No.30 of 2006. It is submitted by thelearned counsel for the applicant that the orders in A.R.Nos.31 to 36of 2006 were not challenged before the Honourable Supreme Court.The Honourable Supreme Court granted special leave to appeal anddisposed of the appeal as per Annexure A11 order dated 7.12.2007. A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 8 ::The Honourable Supreme Court held thus:“We fail to understand how can a Judge beappointed dehors the law of this Court. It was held bythis Court in the case of ACE Pipeline Contracts (P) Ltd.versus Bharat Petroleum Corpn. Ltd. reported in 2007(5) SCC 304 that “the departmental lethargy in makingappointment of arbitrators in terms of the arbitrationclause is well known. Therefore, mandamus can beissued by the Courts in exercise of powers underSection 11(6) of the Act but the demand should be in theevent of failure by the authorities to appoint arbitratorswithin a reasonable time. Courts are not powerless toissue mandamus to the authorities to appoint arbitratorsas far as possible as per the arbitration clause. But inlarge number of cases if it is found that it would not beconducive in the interest of parties or for any otherreasons to be recorded in writing, the choice can gobeyond the designated persons or institutions inappropriate cases. But court should normally adhere tothe terms of arbitration clause and appoint thearbitrator/arbitrators named therein except in exceptionalcases for reasons to be recorded or where both partiesagree for common name.” (Page 306)Therefore, in view of the aforesaid decision, the A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 9 ::view taken by the learned Single Judge cannot besustained. The same is set aside and the Arbitratorappointed by the Railways shall proceed in the matterand dispose of the whole matter preferably within aperiod of six months from today.The appeal is accordingly, allowed.”8. According to the applicant, the Arbitral Tribunal constitutedby the Railways as per Annexure A8 dated 19.9.2006 was expectedto proceed with the arbitration. However, according to therespondents, they could constitute a fresh Arbitral Tribunal.9. The applicant filed O.P.(Arb.) No.287 of 2008 before theDistrict Court, Thiruvananthapuram, under Sections 14 and 15 of theArbitration and Conciliation Act to decide on the termination of themandate of the Arbitral Tribunal and to pass an order to the effectthat the mandate of the Arbitral Tribunal was terminated and theArbitral Tribunal had no jurisdiction to enter upon the reference andadjudicate upon the disputes. In O.P.(Arb.) No.287 of 2008(Annexure A18), the applicant contended that the period of six A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 10 ::months prescribed in the judgment of the Honourable SupremeCourt was over and the Arbitral Tribunal did not enter upon thereference and adjudicate upon the matters in dispute and pass theaward within the time stipulated. The respondents filed AnnexureA12 objection in O.P.(Arb.) No.287 of 2008, in which it wascontended, inter alia, thus:“17. Averments in paras 4 and 5 of the petitionare false and hence denied. The allegation thatbecause of the laches, delay and breach of the contracton the part of respondents 1 and 2, that the petitionersuffered huge loss is against true facts and deniedemphatically. In accordance with the arbitration requestmade by the contractor, the railway was making allpreparations to constitute the Arbitral Tribunals. Buteven before the period available for the same, thecontractor rushed to the Hon'ble High Court with thearbitration requests 41/04 to 47/04 and finally on gettingrealised that the said requests are premature, thecontractor himself represented that he is withdrawing theArbitration Requests. Thereafter the very samepetitioner approached the Hon'ble High Court withanother bundle of petitions as AR Nos.4/05 to 10/05. Inthe said petitions, the Hon'ble High Court passed an A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 11 ::order on 21.3.06 directing the petitioner to nominate oneamong the panel of the Gazetted Officers of theSouthern Railway submitted by the respondents duringthe course of the proceedings in A.R.No.41/04 toA.R.47/04. On the request of the contractor the railwayhad constituted the Arbitral Tribunal with Sri.K.MasthanRao as the sole Arbitrator and further a three memberTribunal with Sri.K.Masthan Rao as the presidingArbitrator was also constituted. In the meanwhile thecontractor again rushed to the High Court withArbitration requests Nos.30/06 to 36/06. After filing suchapplications, the contractor refrained from participatingin the arbitration proceedings. Finally in A.R.30/06 theHon'ble High Court appointed Justice R.Bhaskaran(Retd) as the Arbitrator and thereby the Arbitratorsappointed by the 1st respondent lost their mandate.After the appointment of Justice R.Bhaskaran as theSole Arbitrator by the Hon'ble High Court, Railway alsoparticipated in his proceedings till the order of theHon'ble Supreme Court stayed the common order of theHon'ble High Court of Kerala in A.Rs.30 to 36/06.During the course of the above said SLP, JusticeR.Bhaskaran was the Arbitrator. As on the date of theorder of the Apex Court the Arbitrators appointed by theRailway was not functioning as the Arbitrators and theproceedings were terminated. Hence the spirit of the A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 12 ::order of the Apex court regarding the direction that “thearbitrator appointed by the railways shall proceed in thematter” can only be the new arbitrators to be appointedby the Railway shall proceed with the matter anddispose of the same. It is in consonance with the spiritof the Apex Court order that the railway had appointedSri.P.Jayakumar as the sole Arbitrator and also tried toconstitute the other three Member Tribunal with the co-operation of the contractor which he never extended.18. Averments in paras 6 to 9 of the petition arefalse and hence denied. As stated earlier as on the dateof the order of the Apex Court, the Arbitrators appointedby the Railway were not in existence. Those Arbitratorslost their mandate even as on the date of theappointment of Justice R.Bhaskaran as the Arbitrator bythe Hon'ble High Court. The Hon'ble Supreme Courtdid not pass any order reviving the proceedings of theRailway by which the Arbitrators were appointed by theproceedings dated 19.9.06. Respondents 3 to 5 werenot having the authority to enter upon the reference andadjudicate the disputes since the proceedings werealready terminated. The appointment of new ArbitralTribunal with 3 members could not be done due to theintentional misconduct of the contractor and non-cooperation in the proceedings. A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 13 ::19. Averments in paras 10 to 12 of the petitionare false and hence denied. There was no reason forthe contractor to abstain from participating in the arbitralproceedings since Sri.K.Masthan Rao, the previous soleArbitrator happened to be abroad on deputation andhence the contractor was directed to give his choicefrom among the panel submitted by the Railways, whichalso remained without any response and so alsoreturning the letters sent to him. It may be submittedthat the Railway is ready to constitute the Tribunal andget the disputes resolved through the Arbitrators to beappointed as per the terms of the agreement, providedthe contractor gives his choice of the Arbitrator. Simplybecause of the period of six months had expired fromthe date of the order of the Apex Court, the authority ofthe 1st Respondent in constituting the Arbitral Tribunal,was not lost and especially because the 3 MemberTribunal could not be constituted due to the completelack of co-operation from the side of the Contractor.Also every attempt was made to get the order of theApex Court modified and even at present there is nostrict direction as to the period within which the disputesare to be answered.” A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 14 ::10. The District Court disposed of O.P.(Arb.) No.287 of 2008as per Annexure A15 order dated 14.8.2009, which reads as follows:“Counter filed. In view of the contention in thecounter that the mandate of the arbitrator appointedearlier has been terminated with effect from 30.04.2007and in view of the endorsement made by the counsel forthe petitioner that the O.P. can be closed in view of theabove contention, the petition is dismissed as notpressed with liberty for the petitioner to agitate thevalidity of the arbitral tribunal alleged to have been laterconstituted in appropriate proceedings. The parties aredirected to bear their respective costs.”11. Thereafter, the present Arbitration Requests were filed bythe applicant under Section 11(5) and (6) of the Arbitration andConciliation Act praying for appointment of an independent andimpartial arbitrator. The present Arbitration Requests (A.R.Nos.31 to34 of 2009) were filed on 25.9.2009. Before filing the ArbitrationRequests, the applicant sent Annexure A13 notice dated 21.8.2009to the respondents nominating Sri.Venkatanarayanan, Deputy ChiefSignal Telecommunication Engineer and Sri.A.K.Maurya, Senior A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 15 ::Divisional Electrical Engineer. Annexure A13 letter was sent in replyto the letters dated 7.1.2008 (Annexure R2) and 31.1.2008(Annexure R3), which, according to the applicant, were served onhim only on 14.8.2009 through his counsel along with the objection inO.P.(Arb.)Nos.287 of 2008, 288 of 2008, 289 of 2008 and 290 of2008, District Court, Thiruvananthapuram. (It would appear that theapplicant filed O.P.(Arb.) Nos.288, 289 and 290 of 2008 before theDistrict Court making similar prayers as made in O.P.(Arb.)No.287 of2008, which was disposed of as per Annexure A15 order.) Theapplicant contended that even after the issue of Annexure A13 letter,the respondents did not constitute the Arbitral Tribunal within thirtydays.12. After filing the present Arbitration Requests, as perAnnexure R5 dated 20.10.2009, an Arbitral Tribunal was constitutedby the Deputy General Manager/General for General Manager of theSouthern Railway. It is submitted by the applicant that the first sittingof the Arbitral Tribunal constituted as per Annexure R5 was on12.8.2010, beyond the period of six months from the date ofconstitution of the Tribunal. It is contended by the applicant that the A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 16 ::Arbitral Tribunal constituted after the filing of the ArbitrationRequests would not take away the jurisdiction of the Chief Justice todeal with the application under Section 11(6) of the Arbitration andConciliation Act. The learned counsel for the petitioner relied on thedecisions reported in Datar Switchgears Ltd. v. Tata Finance Ltd.and another ((2000) 8 SCC 151), Punj Lloyd Ltd. v. Petronet MHBLtd. ((2006) 2 SCC 638), Union of India v. Bharat BatteryManufacturing Co.(P) Ltd. ((2007) 7 SCC 684) and DivisionalRailway Manager v. West Coast Agencies (2005 (2) KLT 734) inthis context. Learned counsel for the applicant contended that inview of the terms in the agreements and the works undertaken, notechnical qualification is required for the Arbitrator to resolve thedisputes involved in the case and, therefore, clause (a) of sub-section (8) of Section 11 of the Arbitration and Conciliation Act maynot as such apply. The counsel also relied on the order dated26.9.2006 in A.R.No.36 of 2005 (M/s.K.A.Pillai & Co. v. Union ofIndia and another) in which this Court appointed a retired Judge asthe Arbitrator in respect of a contract entered into between theapplicant therein and the Southern Railway. The counsel also relied A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 17 ::on the decision of the Supreme Court in Denel (ProprietaryLimited) v. Bharat Electronics Ltd. and another (CDJ 2010 SC484) wherein a retired Judge of the Supreme Court was appointedas the sole Arbitrator in spite of the fact that the arbitration clausestipulated appointment of the Managing Director of the respondenttherein as the Arbitrator.13. Sri.M.C.Cherian, learned counsel appearing for therespondents contended that all through out the applicant wasavoiding settlement of disputes by the Arbitral Tribunal and he doesnot really want to resolve the disputes. It is contended that theintention of the applicant is only to drag the proceedings. Before therespondents could take appropriate proceedings for constitutingArbitral Tribunal, the applicant rushed to this Court to pre-empt theproceedings of the respondents. It is pointed out that after AnnexureA11 order was passed by the Honourable Supreme Court, theRailways issued Annexure R2 letter dated 7.1.2008 to the applicantrequesting to nominate his nominee. But that letter was returned asunclaimed. Two other letters were also issued to the applicant, but A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 18 ::those letters were also returned as unclaimed. The counsel alsocontended that the applicant was waiting to expire the period fixed bythe Supreme Court and he did not issue any letter making hisnomination till the expiry of the period. The counsel also pointed outthat Annexures R7 to R13 letters were issued by the Arbitral Tribunalto the applicant, but he did not participate in the proceedings.14. In Datar Switchgears Ltd. v. Tata Finance Ltd. andanother ((2000) 8 SCC 151), the Supreme Court held thus:“19. So far as cases falling under Section 11(6)are concerned-- such as the one before us-- no timelimit has been prescribed under the Act, whereas aperiod of 30 days has been prescribed under Section 11(4) and Section 11(5) of the Act. In our view, therefore,so far as Section 11(6) is concerned, if one partydemands the opposite party to appoint an arbitrator andthe opposite party does not make an appointment within30 days of the demand, the right to appoint does not getautomatically forfeited after expiry of 30 days. If theopposite party makes an appointment even after 30days of the demand, but before the first party hasmoved the court under Section 11, that would be A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 19 ::sufficient. In other words, in cases arising under Section11(6), if the opposite party has not made anappointment within 30 days of demand, the right tomake appointment is not forfeited but continues, but anappointment has to be made before the former filesapplication under Section 11 seeking appointment of anarbitrator. Only then the right of the opposite partyceases. ....”15. In Punj Lloyd Ltd. v. Petronet MHB Ltd. ((2006) 2 SCC638), a three Judge Bench of the Supreme Court relied on thedecision in Datar Switchgears Ltd. v. Tata Finance Ltd. andanother ((2000) 8 SCC 151).16. In Union of India v. Bharat Battery Manufacturing Co.(P) Ltd. ((2007) 7 SCC 684), the Supreme Court relied on thedecisions in Datar Switchgears Ltd. v. Tata Finance Ltd. andanother ((2000) 8 SCC 151) and Punj Lloyd Ltd. v. Petronet MHBLtd. ((2006) 2 SCC 638) and held thus:“As already noticed, the respondent filed Section11(6) petition on 30.3.2006 seeking appointment of an A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 20 ::arbitrator. The appellant, thereafter, said to haveappointed one Dr.Gita Rawat on 15.5.2006 as a solearbitrator, purportedly in terms of Clause 24 of theagreement. Once a party files an application underSection 11(6) of the Act, the other party extinguishes itsright to appoint an arbitrator in terms of the clause of theagreement thereafter. The right to appoint arbitratorunder the clause of agreement ceases after Section 11(6) petition has been filed by the other party before theCourt seeking appointment of an arbitrator.”17. In Divisional Railway Manager v. West Coast Agencies(2005 (2) KLT 734), a Division Bench of this Court held thus:“11. Chapter III of the Act relates to Composition ofArbitral Tribunal. S.11 therein relates to Appointment ofArbitrators. Sub-s.(2) of S.11 provides that subject to sub-s.(6), the parties are free to agree on a procedure forappointing the arbitrator or arbitrators. Sub-s.(6) to whichsub-s.(2), as noticed above, is subject to, provides thatwhere, under an appointment procedure agreed upon by theparties, a party fails to act as required under that procedure,a party may request the Chief Justice or his designate totake the necessary measure, unless the agreement on theappointment procedure provides other means for securingthe appointment. Therefore, in our view, when the writ A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 21 ::petitioner has failed to act as required under the procedureagreed upon by the parties in sub-clause 64(1)(i) of GCC,the compulsion in sub-cl. 64(3)(a)(iii) of GCC that no personother than a Gazetted Railway Officer should act as anArbitrator would not survive. This is so because sub-s.(5) ofS.11 provides that when an agreement on a procedure forappointing the Arbitrators referred to in sub-s.(2) fails, theappointment shall be made upon the request of a party bythe Chief Justice or his designate. In doing so, the ChiefJustice or his designate shall have due regard to theprovisions contained in sub-s.(8) of S.11 which works as alegislative guideline for the Chief Justice or his designate inmaking the choice of the person to be appointed as theArbitrator. If it were the intention of the Legislature that themeasure taken by the Chief Justice or his nominee can beto appoint only the arbitrator identified by name or office inthe agreement, such a stipulation would have beenexpressly provided in sub-s.(8). The absence of such aprovision therein and the prescription in sub-s.(8) that intaking the measure, the Chief Justice or his nominee shall,in appointing an arbitrator, have due regard to (a) anyqualifications required of arbitrator by the agreement of theparties; and (b) other considerations as are likely to securethe appointment of an independent and impartial arbitrator,the two factors enumerated in the said sub-section, go toshow that the power to appoint an arbitrator while takingsuch measure as is required, includes the power to choose.The factor (b) noticed above enables the Chief Justice to A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 22 ::secure the appointment of independent and impartialarbitrator. This is sufficient indication that the Chief Justiceneed not limit his choice to the arbitrator identified by nameor office in the agreement (in this case, to a RailwayOfficer). Therefore, such power to appoint cannot be tieddown to the terms as to appointment contained in theagreement as regards the identity of the arbitrator.12. In our considered view, the object sought to beachieved by such a mechanism ensures that a party, whohas the right to make the appointment of the Arbitrator,having not done so on request by the party seekingreference for arbitration, should not be permitted to urgebefore the Chief Justice or his nominee that notwithstandingthe fact that it had rejected the request for arbitration or hasrefused to make the appointment, the Chief Justice or hisnominee exercising the statutory power under S.11(6) of theAct is tied down to the preference dictated by the oppositeparty (Railways in this case) in the matter of choosing thearbitrator. Such a contention, if it is accepted, will lead tofetter the power of the Chief Justice or his nominee to takethe necessary measure as warranted by the situation forwhich they are empowered in terms of S.11(6) subject onlyto the legislative guidelines contained in sub-s.(8) of S.11.In our view, any other construction would lead to whittlingdown the quality of power conferred by sub-s.11(6) on ahigh office. A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 23 ::............15. Referring to para 23 of the judgment in DatarSwitchgear's case (supra), the learned counsel for the writpetitioner emphasised that the parties having entered intothe contract and settled on a procedure, due importancehas to be given to such procedure and that the Court has torespect the terms of the contract entered into by the partiesand endeavour to give importance and effect to it. It isurged that when the party has not disputed the arbitrationclause, normally he is bound by it and obliged to complywith the procedure laid down under the said clause. Theseobservations have been made by the Apex Court in thecontext of the facts of that case wherein the crux of theissue was that appointment of arbitrator was made by therespondent therein before the filing of the ArbitrationRequest under S.11(6). As we have already held, the effectof the provisions of the agreement would stand supersededby the authority of the Chief Justice and his nomineeconferred by S.11(6), in cases where the appointment is notmade before the Arbitration Request is made by thepresentation of the request in the form of an application inthe Court, in terms of the Scheme for Appointment ofArbitrators by the Chief Justice of High Court of Kerala,1996 and the Kerala Arbitration and Conciliation (Court)Rules, 1997. In the instant case, no appointment havingbeen made before the filing of such request by the 1strespondent, the writ petitioner is precluded from claiming A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 24 ::that the Chief Justice or his nominee could have eitherappointed or directed the Railways to appoint only aGazetted Railway Officer as provided under sub-cl. 64(3)(a)(iii) of GCC.”18. In Indian Oil Corporation Limited and others v. RajaTransport Private Limited ((2009) 8 SCC 520), the Supreme Courtheld thus:“38. Before parting from this issue, we mayhowever refer to a ground reality. Contractors in theiranxiety to secure contracts from Government/statutorybodies/public sector undertakings, agree to arbitrationclauses providing for employee arbitrators. But whensubsequently disputes arise, they baulk at the idea ofarbitration by such employee arbitrators and tend tolitigate to secure an “independent” arbitrator. Thenumber of litigations seeking appointment ofindependent arbitrator bears testimony to this vexedproblem.39. It will be appropriate if Governments/statutoryauthorities/public sector undertaking reconsider theirpolicy providing for arbitration by employee arbitrators indeference to the specific provisions of the new Act A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 25 ::reiterating the need for independence and impartiality inarbitrators. A general shift may in future be necessaryfor understanding the word “independent” as referring tosomeone not connected with either party. That mayimprove the credibility of arbitration as an alternativedispute resolution process. Be that as it may.Re: Question (ii)40. Where the arbitration agreement names ordesignates the arbitrator, the question whether the ChiefJustice or his designate could appoint any other personas the arbitrator, has been considered by this Court inseveral decisions.41. In Ace Pipeline Contracts (P) Ltd. v. BharatPetroleum Corpn. Ltd. ((2007) 5 SCC 304), a two-JudgeBench of this Court held that where the appointingauthority does not appoint an arbitrator after receipt ofrequest from the other party, a direction can be issuedunder Section 11(6) to the authority concerned toappoint an arbitrator as far as possible as per thearbitration clause. It was held that normally the courtshould adhere to the terms of the arbitration agreementexcept in exceptional cases for reasons to be recordedor where both the parties agree for a common name. A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 26 ::42. In Union of India v. Bharat Battery Mfg. Co.(P) Ltd. ((2007) 7 SCC 684), another two-Judge Benchof this Court held that once the notice period providedfor under the arbitration clause for appointment of anarbitrator elapses and the aggrieved party files anapplication under Section 11(6) of the Act, the right ofthe other party to appoint an arbitrator in terms of thearbitration agreement stands extinguished.43. The divergent views expressed in AcePipeline ((2007) 5 SCC 304) and Bharat Battery ((2007)7 SCC 684) were sought to be harmonised by a three-Judge Bench of this Court in Northern Railway Admn. v.Patel Engg. Co.Ltd. ((2008) 10 SCC 240). Afterexamining the scope of sub-section (6) and (8) ofSection 11, this Court held: “11. The crucial expression in sub-section(6) is 'a party may request the Chief Justice orany person or institution designated by him totake the necessary measure' (emphasis inoriginal). This expression has to be read alongwith requirement in sub-section (8) that the ChiefJustice or the person or an institution designatedby him in appointing an arbitrator shall have 'due A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 27 ::regard' to the two cumulative conditions relatingto qualifications and other considerations as arelikely to secure the appointment of anindependent and impartial arbitration.12. A bare reading of the scheme ofSection 11 shows that the emphasis is on theterms of the agreement being adhered to and/orgiven effect as closely as possible. In otherwords, the Court may ask to do what has notbeen done. The Court must first ensure that theremedies provided for are exhausted. It is true ascontended by Mr.Desai, that it is not mandatoryfor the Chief Justice or any person or institutiondesignated by him to appoint the named arbitratoror arbitrators. But at the same time, due regardhas to be given to the qualifications required bythe agreement and other considerations. 13. The expression 'due regard' meansthat proper attention to several circumstanceshave been focussed. The expression 'necessary'as a general rule can be broadly stated to bethose things which are reasonably required to bedone or legally ancillary to the accomplishment ofthe intended act. Necessary measures can be A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 28 ::stated to be the reasonable steps required to betaken.14. ... It needs no reiteration thatappointment of the arbitrator or arbitrators namedin the arbitration agreement is not a must, butwhile making the appointment the twinrequirements of sub-section (8) of Section 11have to be kept in view, considered and taken intoaccount.”19. In the peculiar facts and circumstances of the case, I amof the view that it is just and necessary to appoint an independentarbitrator. The applicant complains that the respondents did notproperly constitute the Arbitral Tribunal, while the respondentscontend that the applicant was protracting the proceedings andavoiding appointment of arbitrators as per the terms of the arbitrationagreement. It is not disputed and it is clear from the facts narratedabove that the parties were before this Court in three sets ofArbitration Requests in 2004, 2005 and 2006. The presentArbitration Requests are the fourth in the series. The agreementswere signed between the parties in 1995. Final claim was made by A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 29 ::the applicant in 2004. Even now, the disputes between the partieshave not been resolved. Had there been no arbitration clause,probably civil courts would have disposed of the cases and resolvedthe disputes much earlier. The purpose and object of the Arbitrationand Conciliation Act is to resolve the disputes expeditiously. In thepresent cases, even after several rounds of litigation, the arbitrationproceedings have not really commenced. Both parties accuse eachother for the delay. The applicant even disputes the impartiality ofthe officers of the Railways in view of the nature of the disputes inthe various proceedings before this Court and the District Court. It issubmitted by the learned counsel for the applicant that therespondents did not disclose the correct facts before the HonourableSupreme Court. It is submitted that though Justice R.Bhaskaran,who was appointed as per Annexure A9 order, conducted sixteensittings, the respondents did not disclose the same in the SpecialLeave Petition filed before the Honourable Supreme Court thereafter.The applicant also contends that the Arbitral Tribunal constituted incompliance of Annexure A6 order dated 21.3.2006 terminated theirproceedings as per Annexure A10 dated 30.4.2007 and that fact wasalso not brought to the notice of the Honourable Supreme Court. It A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 30 ::is also relevant to note here that from the pleadings and recordsproduced in the cases, it would appear that only the order inA.R.No.30 of 2006 was challenged before the Honourable SupremeCourt. The orders in A.R.Nos.31 to 36 of 2006 were not challengedbefore the Supreme Court. It is clear that though the parties foughtseveral litigations, both the parties could be blamed for making ahide and seek game.20. If an independent Arbitrator is appointed, it would protectthe interests of both the parties. I am also inclined to accept thecontention of the applicant that technical qualifications are notrequired for the arbitrator for resolving the disputes involved in thecases. Even assuming that the arbitrator requires any assistance ofa technical expert, he can very well seek such assistance at therequest of any of the parties.Accordingly, the Arbitration Requests are allowed. JusticeV.Ramkumar, a former Judge of the High Court of Kerala, isappointed as the sole Arbitrator to decide the disputes A.R. Nos.31, 32, 33, 34 of 2009, 36, 37 and 38 of 2010 :: 31 ::between the parties in the Arbitration Requests. The Arbitratorwould be free to fix his fee. (K.T.SANKARAN)Judgeahz/