BEFORE THE PUNJAB AND HARYANA HIGH COURT AT CHANDIGARH. *** Harish Chandra (India) Ltd. Vs. Engineer in Chief, Haryana. *** Arbitration Case Nos. 79 and 80 of 2007. Date of decision May 15, 2009 **** Present: Shri V.Ramswaroop, Advocate and Shri R.Kartikeya, Advocate, for the petitioner. Shri Ajay Gupta, Addl: A.G.Haryana. *** T.S.Thakur, CJ (Oral) These two petitions filed under Section 11 of the Arbitration and Conciliation Act, 1996 raise common questions of fact and law between the parties. It is common ground that the parties entered into two distinct but similar contracts in relation to periodic maintenance of Jagadhari-Chhachhrauli-Ponta Road which is the subject matter of Arbitration Case No.79 of 2007 and Yamuna Nagar - Radaur – Ladwa – Thanesar – Pehowa Road relevant to Arbitration Case no. 80 of 2007. It is also not in dispute that the agreements executed between the parties envisaged adjudication of disputes, if any, arising between them by reference to an Arbitral Tribunal comprising three arbitrators, one each to be appointed by the parties and the third to be nominated by the Arbitrators so appointed. It is also not denied that disputes in relation to both the contracts have arisen between the parties which are arbitrable but no reference has been made so far on account of the failure of the respondent to nominate its nominee Arbitrators. This has forced the petitioner contractor to approach this Court seeking appointment of a 2nd arbitrator to enable the two arbitrators so nominated to appoint the third and the Presiding Arbitrator, in both the cases. The petitioners' case in both the petitions proceeds on almost identical lines and broadly speaking is based on the assertion that after the clearance of the final bills by the respondents, claims made by the petitioner for payment of additional amount were filed in terms of communications dated 29.05.2004 (Annexure P-2) in Arbitration Case No. 79 of 2007 and that dated -2- Arbitration Case Nos. 79 and 80 of 2007 27.11.2004 (P-2) relevant to Arbitration case No. 80 of 2007. The petitioners' further case appears to be that despite making of the said claims and a request by the petitioner for payment of the amount mentioned therein the respondents had neither made the payment nor agreed to the reference of the disputes between them to arbitration, leaving no alternative for the petitioner except to file the present petitions seeking nomination of an arbitrator in each one of these case to complete the arbitral tribunal and to ensure that the arbitration proceedings are initiated and concluded at the earliest. The respondents have filed their objections. The defence taken appears to be that according to the general terms and conditions of the contract governing the rights and obligations of the parties, the arbitration proceedings had to be preceded by an 'adjudication' by an 'Adjudicator' appointed for working out an amicable solution between the parties. The respondents allege that Shri D.P.Gupta was initially appointed as the Adjudicator upon whose inability to act Shri R.K. Aggarwal, Engineer-in-Chief, Haryana PWD (B&R), Chandigarh was appointed in his place in terms of orders dated 3.7.2002 and 10.6.2002 (Annexures R-7) and P9 respectively annexed to the objections filed in both the cases. A perusal of the said orders would show that the appointment was liable to termination 30 days after the date of issue of notice of termination, if both the employer and the contractor so desired and also that the appointment would automatically stand terminated 14 days after the defect liability / extended liability period expired in terms of clauses 35 and 36 of the conditions of contract. It is common ground that the work in question was completed on 31.03.2003 in Arbitration case No. 79 of 2007 and on 31.05.2003 in Arbitration case No. 80 of 2007. It is also not in dispute that the defect liability/extended liability expired on 30.9.2003 in Arbitration case No. 79 of 2007 whereas in Arbitration case No. 80 of 2007 it expired on 14.10.2003. Consequently, the Adjudicator's appointment relevant to Arbitration case No. 79 of 2007 expired on 14.10.2003 while in the second case the same expired on 14.12.2003.This would mean that on the date the petitioner filed its claims and raised a dispute for adjudication, the adjudicator appointed in relation to both the contracts had -3- Arbitration Case Nos. 79 and 80 of 2007. ceased to hold that position/appointment and no substitute appointment had been made by the respondents. Consequently, the question of any adjudication proceedings being held by the adjudicators did not arise. That being so, the demand for appointment of an arbitrator by the respondents cannot a fortiori be opposed on the ground that he had not approached the adjudicator for adjudication of the outstanding disputes. At any rate, the provision contained in both the contracts provides for settlement of the disputes by an adjudicator only to facilitate resolution of such disputes as could be easily resolved without resort to a relatively longer process of arbitration. The fact that the process of adjudication was delayed on account of non-availability of the adjudicators to look into the same which was in any case not on account of any failure on the part of the contractor, was in my opinion sufficient to entitle the contractor to demand a reference of the disputes to arbitration and upon the respondents failure to nominate an arbitrator in each one of the cases to file the present petitions. In the totality of the above circumstances and having regard to the nature of the disputes, I am of the opinion that these applications deserve to be allowed and the matters referred to arbitration. The question then is whether it would be feasible for the parties to have two arbitral tribunal comprising three arbitrators each to examine the disputes that are similar and arise in almost similar facts and circumstances. It is true that the petitioner has already nominated an arbitrator in each one of the two contracts, yet I am of the view that instead of appointing three arbitrators in each case, the matter could be referred to a sole arbitrator of impeccable honesty and enviable distinction in the legal world. In the circumstances I allow these applications and refer the disputes between the parties for adjudication to the sole arbitration of Dr. A.S. Anand, former Chief Justice of India. Resultantly the nominations made by the petitioner shall be treated non-est and infructuous. The parties shall appear before the sole arbitrator on July 05, 2009. The arbitrator shall be free to determine his own fee. (T.S.Thakur) May 15, 2009 Chief Justice Malik