/ 1/ IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION ARBITRATION APPEAL NO.9 OF 2004 ALONGWITH CIVIL APPLICATION NO.12 OF 2004 IN ARBITRATION APPEAL NO.9 OF 2004 Arabian Jacking Enterprises for Contracting & Trading Company ...Appellant V/s. Municipal Corporation of Greater Mumbai ...Respondent Mr.Zal Andhyarajina i/b. R.V. Talsikar for Appellant. Mr.M.D. Siodia, Sr.Adv. for Respondent. CORAM : V.M. KANADE, J. DATED : 25th APRIL, 2008. P.C.:- 1. Heard learned counsel for the Appellant and learned counsel for the Respondent. 2. Appellant and Respondent entered into an agreement on 11th May, 1999. Thereafter, an agreement was signed on June 28, 2001. In the agreement, there was a escalation clause which permitted the Appellant to seek enhanced amount on account of the escalation clause. Accordingly, / 2/ Appellant herein relied on the said escalation clause, claiming certain amounts from the Respondent. This was disputed by the Respondent. In the said agreement, there was a Clause 67.3 which contemplated that in case of dispute between the parties, matter may be referred to the Arbitral Tribunal consisting of three Arbitrators. Accordingly, initially name of Mr.D.M. Rege, retired Judge of this Court, was suggested by the Appellant. Corporation also agreed to refer the dispute to Mr.D.M. Rege. Thereafter, the learned Arbitrator passed an order dated 10th September, 2004. Arbitrator after relying on Cause 67.3 of the contract held that in view of said Clause, Tribunal shall consist of three Arbitrators and accordingly, directed the parties to take steps to constitute the Arbitral Tribunal. Being aggrieved by the said order, the Appellant has preferred this Appeal. 3. Learned counsel for the Appellant submitted that Clause 67.3 was later on varied on account of subsequent correspondence between the parties. He submitted that initially names of three Arbitrators were referred to. Out of three Arbitrators, both the Appellant as well as Respondent agreed to appoint Mr.D.M. Rege as sole Arbitrator. He invited my attention to the correspondence between the parties and submitted that both the parties agreed to appoint Mr.D.M. Rege as sole Arbitrator. He submitted that this / 3/ subsequent correspondence and the minutes of meeting which are referred to in the Appeal clearly showed that parties had agreed to vary terms of the contract. He invited my attention to Article 5 of the UNCITRAL Arbitration Rules and submitted that the Article 5 clearly contemplated that if firstly the parties had not agreed on the number of Arbitrators and if within 15 days after arbitration notice was received by the parties, parties had not agreed that there should be only one Arbitrator, three Arbitrators should be appointed. Learned counsel for the Appellant submitted that as a result of subsequent correspondence between the parties, term of contract was varied and parties had agreed to appoint a sole Arbitrator. He submitted that Arbitrator had erred and had wrongly construed Article 5 of the said Rules. 4. Learned counsel for the Corporation, on the other hand, submitted that arbitration notice was issued on 13th December, 2002 and correspondence on which reliance was placed by the learned counsel for the Appellant had taken place in March, 2003 and as a result, within 15 days from arbitration notice, no steps had been taken by the parties and therefore, Arbitrator had correctly held that party should appoint three Arbitrators. 5. It is not possible to accept the submissions made by the Appellant. Clause 67.3(ii) reads as under:- / 4/ “In the case of a dispute with a Foreign Contractor, the dispute shall be finally settled in accordance with the provisions of UNCITRAL Arbitration Rules. The arbitral tribunal shall consist of three Arbitrators one each to be appointed by the Employer (The Claimant) and the Contractor (the Respondent). The third Arbitrator shall be chosen by the two Arbitrators so appointed by the Parties, and shall act as presiding Arbitrator. 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 Presiding Arbitrator shall be appointed by the President of the Institution of Engineers(India). For the purpose of this Clause 67 the term “Foreign Contractor” means a contractor who is not registered in India and is not a juridic person created under Indian Law.” 6. There was no variation of the said Clause by either parties before the arbitration notice was issued. Correspondence on which reliance was placed by the Appellant relates to period after 15 days had expired from the / 5/ receipt of the arbitration notice and therefore, said term cannot be construed to mean that the parties had varied the term of the contract and agreed to appoint a sole Arbitrator. Clause 5 of UNCITRAL Arbitration Rules is quite clear on this aspect which reads as under:- “If the parties have not previously agreed on the number of arbitrators (i.e. one or three,) and if within fifteen days after the receipt by the respondent of the notice of arbitration the parties have not agreed that there shall be only one arbitrator, three arbitrators shall be appointed.” 7. Perusal of Article 5 clearly discloses that the parties have specifically agreed that Arbitration would consist of three Arbitrators and within 15 days from the receipt of arbitration notice which was issued on 13th December, 2002, the parties had not agreed that there should be one Arbitrator and as a result, in view of the Article 5, three Arbitrators were appointed. For the aforesaid reasons, submissions made by the learned counsel for the Appellant cannot be accepted. Appeal is dismissed. In the circumstances, there shall be no order as to costs. Appeal is disposed of accordingly. / 6/ 8. In view of disposal of Appeal, nothing survives in the Civil Application. Civil Application is disposed of accordingly. ( V.M. KANADE, J.)