(1) Arbitration Case No.133 of 2007 v. State of Punjab & Ors.

CORAM: HON’BLE MR. JUSTICE T.S.THAKUR, CHIEF JUSTICE Present: Mr. Yog Raj, Manager, (Claims & Audit) in person for Petitioner-company. Mr. Naresh Kumar, Assistant Engineer, in person on behalf of the respondents. T.S.THAKUR, CHIEF JUSTICE A common question of law arises for consideration in these petitions filed under Section 11 of the Arbitration and Conciliation Act, 1996. These petitions were, therefore, heard together and shall stand disposed of by this common order. The petitioner-Company has in each of these cases prayed for appointment of a sole arbitrator to adjudicate upon the disputes and differences that have arisen between the petitioner-company on the Arbitration Case No.133 of 2007 3 one hand and the respondents on the other. These disputes, it is common ground, relate to an agreement entered into between the parties for several civil and other works, execution whereof was entrusted to the petitioner-Company. It is also admitted that each one of the agreements executed between the parties contain an arbitration clause that provides for adjudication of the disputes and differences by an arbitral Tribunal comprising three Arbitrators, one each to be nominated by the parties and the third who is to be the Presiding Arbitrator to be chosen by the two Arbitrators so nominated by the parties. Clause 25.3 of the general condition of the contract, which is applicable to all the contracts, relevant to each of these petitions may at this stage be extracted:- ARBITRATION (GCC Clause 25.3) The procedure for arbitration will be as follows.

25.3(a) In case of any dispute or difference arising between the employer and the contractor relating to any matter arising out of or connected with this agreement, such disputes or differences shall be settled in accordance with the provisions of Arbitration and Conciliation Act, 1996. The parties shall make efforts to agree on a sole arbitration and only if such an attempt does not succeed an Arbitral Tribunal consisting of 3 Arbitrators one each to be appointed by the Employer and the contractor and the third presiding Arbitrator to be chosen by the two Arbitrators so appointed by the parties to act as Presiding Arbitrator shall be constituted. 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 subsequently, the third Presiding Arbitrator shall be appointed by the Punjab Infrastructure Development Board. Arbitration proceedings shall be held in (b) Chandigarh and the language of the arbitration proceedings and documents and communications between the parties shall be English. Arbitration Case No.133 of 2007 4 (c) The decision of the majority of arbitrators shall be final and binding upon both the parties. The cost and expenses of Arbitration proceedings including fee of the Arbitral Tribunal will be paid as determined by the Arbitral Tribunal. (d) Performance under the contract shall continue during the arbitration proceedings and payments due to the contractor by the owners shall not be withheld, unless they are the subject matter of the arbitration proceedings. The petitioners’ case is that disputes having arisen between the parties, efforts were made to persuade the respondents to agree to the appointment of a sole Arbitrator to reduce the cost of arbitration implicit in case the Arbitral Tribunal comprising three Arbitrators and an independent Tribunal is appointed for each one of the contracts. The respondents, however, did not agree to the appointment of a sole arbitrator. The petitioner-company was therefore, left with no option but to seek the intervention of this court in terms of Section 11(6) of the Arbitration and Conciliation Act. The respondents have in the objections filed on their behalf inter alia pointed out that pursuant to the demand made by the petitioner-company for appointment of an arbitrator, the respondents had proposed the name of Sh. S.P. Banwait, former Additional Director General, Central Public Works Department and former Chief Engineer (DDA) for appointment as an impartial sole Arbitrator in the matter. Instead of agreeing to the appointment of Sh. Banwait, the petitioner-company rushed to this court to file the present petitions. The reply further states that in case the name of Sh. Banwait is not acceptable to the petitioner-company as the sole Arbitrator, he may be treated as a nominee Arbitrator for constitution of a three-member Arbitral Tribunal. Having said so, the respondents have disputed the Arbitration Case No.133 of 2007 5 claims made by the petitioner-company as misconceived, unfounded and untenable. The respondents allege that whatever amounts were payable to the petitioner-company were paid to it and nothing, further is due to it. When the matter came up for hearing before me on February 20, 2009, learned counsel for the parties submitted that given a week’s time, the parties would nominate their respective Arbitrators leaving the appointment of a Presiding Arbitrator to this Court to expedite the adjudication of the disputes that have arisen between the parties. The petitions were accordingly adjourned to February 27, 2009. Sh. Yograj, Manager (Claims and Audit) appearing for the petitioner-company has accordingly placed on record a communication addressed by Sh. H.S. Dev, Superintending Engineer (Retd.), Kothi No.1790, Phase 3-B2, Mohali, conveying his consent to act as nominated Arbitrator of the company. It is submitted by Sh. Yograj that Sh. Devraj may be taken as the nominee Arbitrator of the petitioner-company for adjudication of the disputes in relation to each one of the contracts forming the subject matter of these petitions. The respondent Chief Engineer (IP) Punjab, PWD (B&R), Chandigarh has by a communication dated 25.02.2009 addressed to Shri Amol Rattan Singh, Addl. Advocate General, Punjab, a copy whereof was placed on record by the representative of the respondents, conveyed that the department would continue with the name of Sh. S.P. Banwait as the nominated Arbitrator on their behalf to adjudicate upon the disputes. It was submitted that the two Arbitration Case No.133 of 2007 6 Engineers nominated by the parties mentioned above can be taken as Members of the Arbitral Tribunal and the Presiding Arbitrator nominated by this Court. It was urged that the nomination of the Presiding Arbitrator by this Court instead of the Arbitrators nominated by the parties would expedite the constitution of the Tribunal and eventually the adjudication of the disputes that have arisen between the parties. In the circumstances, therefore, and keeping in view the fact that the existence of the arbitration clause in each one of the agreements executed between the parties, the subject matter of these petitions, is not in dispute as also the fact that the disputes that have arisen between the parties, are arbitrable, I see no reason why a single Arbitral Tribunal cannot be constituted to ensure that the process of adjudication is undertaken and completed in good time. I also see no reason why the nominated Arbitrators of the parties should not be a part of the Arbitral Tribunal. All that, therefore, remains is to nominate a Presiding Arbitrator which in the ordinary course ought to have been done by the nominated Arbitrators but has been left by the parties to this Court in the interest of speedy disposal of the matter. I, accordingly, nominate Hon’ble Mr. Justice S.S. Kang, former Judge of this Court and former Chief Justice of Jammu & Kashmir High Court as the Presiding Arbitrator for the Arbitral Tribunal with two nominated Arbitrators mentioned above as co- Arbitrators for adjudicating upon the disputes and differences that have arisen between the parties in relation to the contracts referred to in these petitions. The Tribunal so constituted shall, however, be Arbitration Case No.133 of 2007 7 free to make a common or independent awards in respect of each one of the contracts as may be found feasible. The Arbitral Tribunal shall be free to fix its fee and the proportion in which the same shall be paid by the parties. These petitions are with the above directions disposed of. The parties are directed to appear before the Presiding Arbitrator for further directions on 28th March, 2009 at 10.30 A.M. at his residence at Chandigarh. Copies of this order shall be sent to the Presiding Arbitrator and nominee Arbitrators separately. No costs. March 20, 2009 `Kalra ( T.S.THAKUR ) CHIEF JUSTICE