IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Arb. Case No. 291 of 2006 Date of decision 6.4.2011 M/s Vijay Constructions Works Builders and Engineers and another ……petitioners Vs. Union of India and another ……respondents CORAM: - HON’BLE MR. JUSTICE HEMANT GUPTA Present: - Mr. Vikas Mohan Gupta, Advocate for the petitioners Mr. Jagdish Marwah, Advocate for respondents. Hemant Gupta, J The present is the petition for appointment of an Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short the ‘Act’). Petitioner submitted tender dated 1.12.1983 regarding the construction of Administrative Block in Diesel Component Works, Patiala. Such offer of the petitioner was accepted and a written Agreement No. DCW/CE/WA/CS-42 dated 13.3.1984 was executed between the parties containing an Arbitration Clause. The dispute between the parties arose. The petitioner filed a petition under Section 20 of the Arbitration, Act 1940 (for short the ‘ old Act’). Learned trial Court allowed the said petition and passed an order on 21.5.1998 for appointment of an Arbitrator in terms of the Arbitration Clause. The operative part of the said order reads as under: - In view of my findings on the above issues, petition is accepted, whereby the dispute in respect of the agreement No. DCW/CE/WA/CS-42 dated 13.3.1982 between the parties is referable to the arbitration. The Arbitrator be Arb Case NO. 291 of 2006 appointed as per the arbitration clause contained in the agreement. File be consigned to the record room. The said order was challenged by the respondents herein before this Court. The said appeal bearing FAO No. 381 of 1999 was dismissed on 29.4.2002. Thereafter, on 7.8.2003 vide the Annexure P-4, Shri Gurdeep Singh, FA & CAO, DCW/PTA and Shri D. A. Anand, CME (P), DCW PTA were appointed as Arbitrators. Subsequently, Shri Gurdeep Singh resigned as an arbitrator on 26.4.2004 whereas Shri D. A. Anand resigned as an arbitrator on 1.6.2005. There is an exchange of communication in respect of supply of vacancies so caused resting with a notice issued by respondents on 7.6.2006 to the petitioner with the following averments: 5. As a period of 8 months has already passed without any further response from you, please take this final notice that in case you do not communicate the name of your nominee within one week from the receipt of this notice, the Chief Administrative Officer (R) will have no option to appoint one person out of the panel as your nominee besides appointing a Railway nominee as the second arbitrator. The arbitrators so appointed shall be entitled to proceed with the arbitration from the stage the earlier arbitrators left the proceedings. It is thereafter the petitioner filed the present petition for appointment of an Arbitrator before this Court. It is the case of the petitioner that in terms of sub Clause 3(f) of Clause 64, the Arbitration and Conciliation, Act, 1996 is applicable in respect of the disputes between the parties as the parties have agreed to be governed by the statutory modification in the old Act. Reliance is placed upon the judgment of the Hon’ble Supreme Court reported as (1999) 9 SCC 334 , Thyssen Stahlunion GMBH vs. Steel Authority of India Ltd. On the other hand, learned counsel for respondents contends that since the Arbitrators have resigned and the respondents have sought consent of the petitioner for appointment of the Arbitrator, therefore, the vacancies 2 Arb Case NO. 291 of 2006 had to be filled up in terms of the agreement between the parties and the present petition under Section 11(6) of the Act is not maintainable before this Court. The question whether the old Act or the Arbitration and Conciliation Act, 1996 applies, is not really an issue arising in the present case. The fact remains that the Civil Court on an application under Section 20 of the old Act has directed the Arbitrator to be appointed in terms of the Arbitration clause contained in the Agreement. The respondents appointed Shri Gurdeep Singh and Shri D. A. Anand as Arbitrators in exercise of such power and in compliance of the directions of the Civil Court. Consequent to the resignation of the aforesaid Arbitrators, the vacancies had to be filled up in terms of the directions of the Civil Court only. Therefore, the notice issued by the respondents is in proper exercise of jurisdiction under the agreement. Even under the New Act, the Arbitrator is to be appointed with due regard to the Agreement between the parties in terms of Sub Section 8 of Section 11 of the Act. Since, the agreement contains a procedure for appointment of an Arbitrator and the Civil Court has already directed the respondents to appoint an Arbitrator in terms of the Agreement, therefore, the present petition is disposed of with the hope that the respondents shall appoint an Arbitrator in terms of the agreement between the parties within a period of one month, failing which it shall be open to the petitioner to approach the appropriate authority for appointment of an independent Arbitrator. [HEMANT GUPTA] JUDGE 6.4.2011 preeti 3