IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.T.SANKARAN FRIDAY, THE 3RD DECEMBER 2010 / 12TH AGRAHAYANA 1932 AR.No. 29 of 2010 PETITIONER: --------------------- P.C.POULOSE, PROPRIETOR, CANARA CAFETERIA, RESIDING AT PARAYIL HOUSE (SILVERSAND), MAIKAD.P.O., ANGAMALY, ERNAKULAM-683 589. BY ADV. SRI.ABRAHAM VAKKANAL, SENIOR ADVOCATE SRI.PAUL ABRAHAM VAKKANAL SRI.DIJO SEBASTIAN SMT.VINEETHA SUSAN THOMAS RESPONDENTS: --------------- 1. CHAIRMAN, AIRPORT AUTHORITY OF INDIA, RAJEEV GANDHI BHAVAN, NEW DELHI-110 003. 2. AIRPORT DIRECTOR, AIRPORT AUTHORITY OF INDIA, CALICUT AIRPORT, AIRPORT.P.O., KONDOTTY, CALICUT. BY SENIOR ADVOCATE SRI.N.N.SUGUNAPALAN ADVOCATE SRI.S.SUJIN THIS ARBITRATION REQUEST HAVING BEEN FINALLY HEARD ON 03/12/2010, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: K.T.SANKARAN, J. ----------------------------------------------------------- ARBITRATION REQUEST NO.29 OF 2010 ----------------------------------------------------------- Dated this the 3rd day of December, 2010 O R D E R The applicant and the Airport Authority of India entered into Annexure-A agreement dated 9.1.2001, by which, the applicant was permitted to run a snack bar in the premises of the Calicut Airport on a licence fee agreed upon between the parties. There is provision for annual increase of the licence fee. The period fixed as per the agreement was three years. It is stated that possession of the site was handed over on 24.5.2001 and therefore, the period of three years started from that date. However, before the expiry of the period of licence, the snack counter had to be closed down on account of renovation work in the Airport. 2. The applicant sent Annexure-B letter dated 8.7.2001, requesting for remission of the licence fee. He also put forward certain claims. In Annexure-B, a request was also made to appoint an arbitrator as per the provisions of Annexure-A agreement. Annexure-C reply dated 20.11.2001 was sent by the first respondent approving a rebate of 50%. It was also noticed in Annexure-C that ARBITRATION REQUEST NO.29 OF 2010 :: 2 :: the competent authority has ruled out reopening of the case further. The applicant sent Annexure-D letter dated 20.3.2003 putting forward a claim of Rs.2,60,500/- as loss sustained by him. Later, as per Annexure-E dated 1.7.2003, the applicant made a request to the Chairman of the Airport Authority of India to appoint an arbitrator to decide the dispute and to settle the claims made by the applicant. A total sum of Rs.12,53,643/- was claimed in Annexure E. There was no reply to Annexure-E. Annexures G and H reminders were sent by the applicant. Thereafter, the applicant filed A.R.No.52 of 2005 to appoint an arbitrator. At that juncture, it was submitted by the respondents that an arbitrator was appointed by the first respondent. This Court ratified the action of the first respondent in appointing Sri.K.Natarajan, who was working as the Airport Director, as the arbitrator. A.R.No.52 of 2005 was accordingly disposed of as per Annexure-I order dated 11.8.2006. The arbitrator commenced the proceedings. Notices were issued in respect of the two sittings. Later, the arbitrator was transferred to the Vigilance Department at Delhi. The applicant made Annexure-L request dated 20.5.2008 to the first respondent to appoint another arbitrator in terms of the agreement. Thereafter, Sri.K.Natarajan, the arbitrator, issued Annexure-O letter dated 4.2.2009, fixing 28.2.2009 as the date for ARBITRATION REQUEST NO.29 OF 2010 :: 3 :: sitting. However, the proceedings were not completed by the arbitrator though one sitting was held. On enquiry by the applicant, he came to know that Sri.K.Natarajan availed voluntary retirement with effect from 16.12.2009 and that was why the sitting was not conducted thereafter and the proceedings could not be completed. However, the arbitrator sent Annexure-Q letter dated 6.1.2010 to the Executive Director (Commercial) of the Airport Authority of India stating that both parties did not show any interest in the progress of the case. The applicant submitted that the above statement made by the arbitrator is absolutely incorrect and that the arbitrator himself was responsible for not proceeding with the arbitration proceedings. 3. The applicant made Annexure-S request dated 3.3.2010 to the first respondent to appoint an arbitrator. No reply was sent by the respondents. The applicant again sent Annexure-U reminder dated 19.5.2010. Still, there was no response. Therefore, the applicant was constrained to file the present Arbitration Request on 7.7.2010. 4. Sri.N.N.Sugunapalan, learned Senior Counsel appearing for the respondents submitted that another arbitrator was appointed ARBITRATION REQUEST NO.29 OF 2010 :: 4 :: after the filing of the Arbitration Request. Learned counsel for the applicant submitted that the appointment of another arbitrator after the filing of the Arbitration Request cannot be recognized and the maintainability of the Arbitration Request is not affected by such an appointment. He relied on the decisions in Punj Lloyd Ltd. v. Petronet MHB Ltd. ((2006) 2 SCC 638); Datar Switchgears Ltd. v. Tata Finance Ltd. ((2000) 8 SCC 151) and Bharat Sanchar Nigam Limited and another v. Dhanurdhar Champatiray ((2010) 1 SCC 673). 5. Annexure-A agreement contains the arbitration clause, which reads as follows: “3.37. All disputes and differences arising out of or in any way touching upon or concerning this Agreement (except those the decision whereof, is otherwise herein before expressly provided for) shall be referred to the sole “Arbitration” of the Chairman, Airports Authority of India, National Airports Division, New Delhi, and in case, his designation is changed or his office is abolished, to the sole arbitration of the Officer, who for the time being, is entrusted, whether or not in addition to other functions, with the functions of ARBITRATION REQUEST NO.29 OF 2010 :: 5 :: the Chairman, Airports Authority of India, by whatever designation, such officer may be called (hereinafter referred to as the said Officer) and if the Chairman, Airports Authority of India, National-Airports Division, or the officer, is unable or unwilling to act, to the sole arbitration of some other person so appointed by the Chairman, Airports Authority of India, National Airports Division. There will be no objection to any such an appointment that the Arbitrator, so appointed is a Authority servant and that he had to deal with the matters, to which this Agreement relates and that in the course of his duties, as such Authority servant, he has expressed views on all or, any of the matters in dispute or differences. The award of the Arbitrator so appointed, shall be final and binding on the parties. The Arbitrator may with the consent of the parties, extend the time for making and publishing the 'award'.” 6. Since no arbitrator was appointed by the respondents as per the terms of the arbitration agreement, I am of the view that the Arbitration Request is perfectly maintainable in the light of the decisions of the Supreme Court mentioned above. Subsequent appointment of an arbitrator would not be a bar to the maintainability of the Arbitration Request. The applicant is not bound to accept such an appointment in view of the decisions of the Supreme Court referred to above. ARBITRATION REQUEST NO.29 OF 2010 :: 6 :: 7. For the aforesaid reasons, the Arbitration Request is liable to be allowed. It is necessary to appoint an arbitrator for resolving the disputes between the parties touching upon Annexure-A agreement. It is agreed by both the parties that Justice M.Ramachandran (Retired) may be appointed as the arbitrator. 8. Accordingly, Justice M.Ramachandran (Retired) is appointed as the arbitrator for resolving the disputes between the parties touching upon Annexure A agreement and Annexure-E claim. It is made clear that the claim put forward by the applicant before the arbitrator appointed earlier shall be treated as the claim of the applicant and no additional claim shall be put forward by him except subsequent interest on the amount claimed. The arbitrator would be free to fix his fee. The Arbitration Request is allowed as above. (K.T.SANKARAN) Judge ahz/