1 S.B.Civil Arbitration Application No.76/2008 18.2.2010 Hon'ble the Chief Justice Mr.Jagdish Bhalla Mr.Alok Sharma for the applicant. Mr.O.P.Gandhi for Mr.Rajendra Arora for respondent no.1 Mr.Dinesh Yadav for respondent no.2. This is an application for substitution of learned Arbitrator Mr.M.L.Jain, appointed by respondent no.1. Brief facts of the case are that authorized representative of opposite party no.1 i.e. opposite party no.2 had entered into an agreement with the applicant having arbitration clause in case of dispute. At the time when the dispute arose, both parties had nominated their Arbitrators. Thereafter, two Arbitrators were requested to appoint third Arbitrator and when third Arbitrator was not appointed, in such circumstances, the applicant has approached this Court for appointment of third Arbitrator. However, during the pendency of application of the applicant, the two Arbitrators in its meeting held on 9.10.2005, appointed Shri Justice S.N.Bhargava, Chief Justice (Retd.) as third Arbitrator and thus, the application was dismissed by this Court as infructuous. The proceedings started before three learned Arbitrators. On 3rd October, 2006, Mr.M.L.Jain, learned Arbitrator appointed by the respondent no.1 resigned. Accordingly, an application was moved before this Court for substitution. The said application was rejected by this Court vide order dated 10.8.2007 on the ground that neither the original copy of the agreement nor its certified copy was filed alongwith 2 the application. The said order was challenged by way of appeal before the Division Bench of this Court, though the same was not maintainable. Hence, the appeal was dismissed as withdrawn vide order dated dated 12th August, 2008. Thereafter, the present application has been filed before this Court. The learned counsel for the respondent no.1 has submitted that this Court has no jurisdiction to entertain this application because jurisdiction lies with the Pune courts. Secondly, it has been contended that there is no agreement between the applicant and the respondent no.1. However, during the course of arguments, it has been conceded on behalf of the respondent no.1 that the agreement entered upon by respondent no.2 with the applicant was on behalf of respondent no.1 and the same is binding on respondent no.1. The learned counsel for the applicant has submitted that now he has filed certified copy of the agreement before this Court alongwith the application and therefore, this Court can show interference while passing order of substitution of the learned Arbitrator. He has relied upon Section 4 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act”), which is quoted hereunder:- “4.Waiver of right to object.- A party who knows that- (a) any provision of this Part from which the parties may derogate, or (b) any requirement under the arbitration agreement, has not been complied with and yet proceeds with the arbitration without stating his objection to such non-compliance without undue delay or, if a time limit is provided for stating that objection, 3 within that period of time, shall be deemed to have waived his right to so object.” It has been emphatically contended by the applicant that no objection was raised by the respondent no.1 with regard to constitution of the Arbitral Tribunal. However, respondent no.1 has raised objection with regard to the arbitration proceedings. The said objection was rejected by the Arbitral Tribunal. Aggrieved by the same, the respondent no.1 had filed a writ petition no.399/06, in which initially interim order was granted on stay application, but later on, the same was vacated on 27.11.2006 and the learned counsel for the respondent no.1 informs that the said writ petition was ultimately dismissed by this Court. Now the question before this Court is whether after resignation of Mr.M.L.Jain, he can be substituted by an order of this Court? The learned counsel for the applicant has drawn attention of this Court to the agreement and jurisdiction of the Pune courts and submits that this is with respect to contractual dispute, on the other hand, the dispute before this Court is not contractual one, but it is statutory one because of the reason that one Arbitrator has resigned and in his place another Arbitrator is to be substituted. Further, it has been contended that now in light of the provisions of the Act, the appointment of the Arbitrator is within the jurisdiction of the High Court and not other courts. Therefore, the Pune courts otherwise do not have jurisdiction. The learned counsel for the respondent no.1 submits that in such circumstances, the jurisdiction 4 lies with the Bombay High Court. He has no knowledge whether jurisdictional question was raised earlier when the first application for appointment of Arbitrator was filed. The learned counsel for the applicant further contended that the parties have already submitted to the jurisdiction of the Arbitrators in light of Section 7 of the Act. The learned counsel for the respondent no.1 could not substantiate its stand with respect to jurisdiction of this Court. On the other hand, I find force in the argument raised by the applicant that the appointment of Arbitrator is statutory in nature and not contractual one. After resignation of Mr.M.L.Jain, Arbitrator nominated by respondent no.1, no other Arbitrator was nominated by the respondent no.1 for the reason best known to them. However, in its reply, the respondent no.1 admits the need of the substitution of Arbitrator in place of Mr.M.L.Jain. In light of the discussions made above, this Court has jurisdiction to order substitution. Accordingly, Shri Justice V.S.Dave, Judge (Retd.) is appointed as Arbitrator in place of Mr.M.L.Jain. The Arbitrator will fix his fee according to the Arbitration Manual. With these observations, the application stands disposed of. (Jagdish Bhalla)C.J. Parmar