Arbitration Case No. 52 of 2009 [1] IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH Arbitration Case No. 52 of 2009 Date of Decision: 28.01.2010 M/s Kohli Construction Company ..Petitioner Versus M/s Shakun Infrastructure Development Ltd. ..Respondent CORAM: HON'BLE MR. JUSTICE MUKUL MUDGAL, CHIEF JUSTICE 1.Whether Reporters of local papers may be allowed to see the judgment ? 2. Whether to be referred to the Reporters or not ? 3. Whether the judgment should be reported in the Digest? Present :- Mr. T.S.Dhindsa, Advocate, for the petitioner. Mr. Kanwaljit Singh, Sr. Advocate with Ms. Prachi Sharma, Advocate, for the respondent. *** MUKUL MUDGAL, C.J. (Oral) 1. This petition has been filed by the petitioner under Section 11(6) of the Arbitration & Conciliation Act, 1996 (for short 'the Act), for appointment of a sole Arbitrator to adjudicate upon the disputes between the parties. 2. Clause 44 of the agreement contains the Arbitration Clause which reads as under:- Arbitration Case No. 52 of 2009 [2] “44. A) All disputes or differences of any kind whatsoever which shall at any time arise between the parties hereto touching or concerning the work or the execution or maintenance thereof of this contract or the rights touching or concerning the work or the execution or maintenance thereof of the contract or the construction remaining operation or effect thereof or to the rights or liabilities of the parties or arising out of contract (other than those in respect of which the decision of any person is by the contract expressed to be final and binding) shall after written notice by either party to the contract to the other of them and to the Appointing Authority who shall be appointed for this purpose by the Employer SIDL be referred for adjudication to a sole Arbitrator to be appointed as hereinafter provided. If the dispute or difference pertain to the undernoted matter...... the decision in writing of the Architect, conclusive and binding on the parties. i) Instructions ii)Instructions iii)Proof of quality of materials, iv)Assigning or under letting of the contract, v) Certificate as to the causes of delay on the part of contractor and justifying extension of time. vi)Rectifying of defects, pointed out during the 'Defect liability period. vii)Notice to the contractor to the effect that he is not proceeding with due diligence. viii)Certificate that the contractor has abandoned the contract. ix)Notice of determination of the contract by the employer. For the purpose of appointing the sole Arbitrator referred to above, the Employer will send within thirty days of receipt of the notice to the CONTRACTOR a panel of three names of persons who shall all be presently connected with the organization for which the WORK is executed. THE CONTRACTOR shall on receipt of the names as aforesaid, select any one of the persons named to be appointed as a Sole Arbitrator and communicate his name to the Appointing Authority within seven days of receipt of names. The Appointing Authority shall thereupon without any delay appoint the said person as the Sole Arbitrator. If the CONTRACTOR fails to communicate such selection as provided above within the period specified, the appointing Authority shall make the selection and appoint the selected person as the Sole Arbitrator.” 3. I have heard learned counsel for the parties at some length. Arbitration Case No. 52 of 2009 [3] 4. Learned counsel for the petitioner raised a plea that appointment of the appointing authority as is required by arbitration clause had not taken place, when the Arbitrator was appointed, therefore, the appointment of that arbitrator was void ab-initio. Learned counsel for the respondent while rebutting the aforesaid plea contended that the appointing authority was indeed the Board of Directors who appointed the arbitrator, therefore, appointment was not bad. The said plea of learned counsel for the the respondent is not tenable because that is not supported by the arbitration clause reproduced above which provides that appointing authority shall be appointed for the purpose of appointing Arbitrator, by the employer. 5. Faced with this situation, learned counsel for the respondent stated that the Board of Directors would appoint an appointing authority as per arbitration clause and that appointing authority shall supply a fresh panel of the Arbitrators to the petitioner and the Arbitrator already appointed shall not proceed in the matter further. Learned counsel for the petitioner agreed to the proposal put forth by learned counsel for the respondent. 6. In view of the aforesaid settlement arrived at between the parties, this petition is disposed of with a direction that the appointing authority named by the Board of Directors shall supply a fresh proposed panel of the Arbitrators the petitioner as well as to its counsel not later than six weeks from today. Response to the said proposed panel shall be communicated to the respondent or its counsel by the petitioner within two weeks thereafter. The statement of claim shall be furnished within four weeks after the exchange of the approval of the name of the Arbitration Case No. 52 of 2009 [4] Arbitrator to be appointed. The response to the claim be supplied to the petitioner within four weeks thereafter. However, in case there is no approval given by the petitioner, it will be open for the respondent to appoint one of the Arbitrators named in the panel supplied to the petitioner. The parties shall appear before the Arbitrator so appointed on 26.06.2010 at 4.00 P.M. or on an agreed date convenient to the parties but not later than a fortnight from the date of exchange of pleadings as directed aforesaid. The Arbitrator shall make an endaveour to dispose of the reference not later than six months from the date of first appearance of the parties. (MUKUL MUDGAL) CHIEF JUSTICE 28.01.2010 'ravinder'