1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ARBITRATION APPLICATION NO. 162 OF 2007 ALONG WITH ARBITRATION PETITION NO. 315 OF 2008 ARBITRATION APPLICATION NO.162 OF 2007 The Director General Naval Project (MB) ) and another ).. Applicants Versus M/s. Continental Construction Ltd. ).. Respondent Mr. A.M. Sethana for the Applicant. Mr. U.S. Samudrawala for the Respondent. ALONG WITH ARBITRATION APPLICATION NO. 315 OF 2008 M/s. Continental Construction Ltd. ).. Applicant Versus The Director General Naval Project (MB) ) and others ).. Respondents Mr. U.S. Samudrawala for the Applicant. Mr. A.M. Sethana with Mr. G. Hariharan for the Respondents. CORAM : J.N. PATEL, ACTING C.J. DATED : 11TH JUNE 2010 2 P.C. Heard. 2. These Applications are made to seek direction of this Court to appoint a suitable serving Officer as Sole Arbitrator in accordance with the provisions of the Contract for the reason that the Arbitrator who was appointed by this Court has superseded and, therefore, ceases to act as an Arbitrator. 3. The Respondent Company strongly objects to the change of the Arbitrator on the ground that the Arbitrator was appointed by this Court and, therefore, till the Arbitrator concludes the proceedings and passes an Award, it will not be proper to change the Arbitrator merely on the ground that he has superseded. It is submitted that on retirement of the Arbitrator, he has written to the Applicant vide letter dated 18th February 2010 that he is willing to continue as an Arbitrator in the said arbitration proceedings on the terms and conditions of Respondent UOI/DGNP (MB) mentioned in the letter dated 3rd February 2009 and has submitted that he should be treated at par with the serving Chief Engineer for the purposes of making available facilities and payments of allowance and, therefore, there is no issue as to why this Court should change or direct the Applicant to substitute an Arbitrator in the place of the named Arbitrator P. Tulasi Ram, Jt. DG TE (Retd.) who was initially appointed by the Court. 3 4. Mr.Sethana, learned Counsel appearing for the Applicant Union of India has drawn my attention to Clause 65.1 of the Contract which relates to arbitration and, particularly, to the sub-clause which provides that if the Arbitrator so appointed resigns his appointment or vacates his office or is unable or unwilling to act due to any reason whatsoever, the authority appointing him may appoint a new Arbitrator to act in his place. It is submitted that the Arbitration clause provides that an arbitration be referred to a Sole Arbitrator to a serving Officer having degree in Engineering or equivalent or having passed final/ direct final examination of sub-division II of Institution of Surveyor (India) recognized by the Government of India by the Competent Authority mentioned in the arbitration clause and, therefore, Mr.P. Tulasi Ram, who was at the relevant time a serving Officer was appointed as a Sole Arbitrator and since he has retired, he will have to be substituted by another serving officer as per the mandate of the arbitration contract between the parties. 5. On the other hand, it is contended by the learned Counsel appearing for Respondent Company, that the Arbitrator came to be appointed by this Court on the application made by the parties under Section 11(6) of the Arbitration and Conciliation Act, 1996 and, therefore, the Applicants who were the Respondents in the original Petition having failed to comply with the requirement of appointment 4 of an Arbitrator, in spite of they being given notice, they are prevented from invoking the mandate of the Arbitration Agreement and as the Court has appointed the Arbitrator who happens to be a serving Officer, it does not necessarily means that his appointment would come to an end merely because he has retired. 6. Mr. Sethana has drawn the attention of this Court to the three Judge Bench decision of the Supreme Court of India in the case of Union of India and others vs M/s Prabhat Kumar & Bros. and another, reported in AIR 1994 SC 649. This squarely covers the issue raised in these Applications. The learned Counsel appearing for the Respondent Company submitted that the decision relied on by Mr.Sethana in the case of Prabhat Kumar (supra) pertains to the old Act. Though it may be so, but the ratio thus covers the issue and, therefore, I am of the view that after Mr. P. Tulasai Ram has retired, he ceases to be Arbitrator as Clause 65.1 of the Agreement which provides for an arbitrator, clearly requires a serving Officer to be appointed as an Arbitrator. In this case, the Arbitrator was appointed on an application made to this Court and the Court having chosen to appoint a serving Officer in furtherance of the scheme of arbitration agreed between the parties, there is no reason to deviate from the same and, therefore, the application of the Applicants (Union of India) is allowed. 7. The Respondents’ Appointing Authority is directed to 5 appoint a suitable Officer as Sole Arbitrator in accordance with the provisions of the Arbitration and Conciliation Act, 1996. The former Arbitrator Mr. P. Tulasi Ram is directed to return the record and proceedings in the office of the Appointing Authority of the Union of India within a period of six weeks from today. 8. Arbitration Applications stand disposed of accordingly. 9. The learned Counsel appearing for the Respondent Company submits that the order be held in abeyance to enable the Respondent Company to approach appropriate authorities. The operation of the order be held in abeyance for four weeks. ACTING CHIEF JUSTICE