IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE PIUS C.KURIAKOSE MONDAY, THE 26TH MAY 2008 / 5TH JYAISHTA 1930 AR.No. 11 of 2008() ------------------- APPLICANT -------------------------- M.T.SUKUMARAN, S/O.LATE N.KORAN, 'SNEHA NIVAS', RAMANTHALI P.O. KANNUR DIST. BY ADV. SRI.KALEESWARAM RAJ RESPONDENTS: OPPOSITE PARTIES ----------------------------- 1. UNION OF INDIA, REPRESENTED BY SECRETARY TO GOVERNMENT, DEPARTMENT OF DEFENCE, NEW DELHI. 2. THE FLAG OFFICER COMMANDING IN CHIEF HEADQUARTERS, SOUTHERN NAVAL COMMAND, KOCHI 682 004. BY ADV. SRI.S.KRISHNAMOORTHY, CGC FOR R,1,2 THIS ARBITRATION REQUEST HAVING BEEN FINALLY HEARD ON 26/05/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: PIUS C. KURIAKOSE, J. ----------------------------------------------- A.R. No. 11 OF 2008 ----------------------------------------------- Dated this the 26th day of May, 2008 O R D E R This is an application under section 11 of the Arbitration and Conciliation Act, 1996 seeking appointment of an independent and impartial arbitrator for resolution of the disputes and difference which have arisen between the petitioner and the opposite parties viz. Union of India represented by Secretary to Government Department of Defence, New Delhi and the Flag Officer Commanding in Chief, Southern Naval Command over and in respect of the agreements Annexures I and II. Annexure I is copy of the agreement between the parties dated 24-1-02 under which the applicant obliges of right for plucking coconuts, arecanuts and pepper from Block No.II at Naval Academy Project, Ezhimala for a period of three years. Annexure II is a subsequent agreement between the parties covering the period from 1-7-04 to 30-6-7. The applicant refers to clause 9 of Annexure I wherein it is provided that the second respondent or any officer deputed by him will be entitled to withdraw any area covered by the agreement which may be required for military purposes or on account of security reasons. It is stated in clause 9 that in the event of such withdrawal the contractor is entitled for refund of proportionate AR. N0. 11/08 -2- compensation as fixed by the second respondent. Clause 9 in Annexure II is also similar. Applicant alleges that after entering into the agreement a large number of high yielding trees were removed from the area allotted to the applicant during the currency of the contracts and buildings, roads etc. were constructed in the area. It is also alleged that in certain areas allotted to the petitioner there were activities like earth work, blasting etc. and thus a good portion of the area which is subject matter of Annexures I and II was virtually excluded and from those areas the applicant was unable to take any usufructs. When this aspect of the matter was brought to the notice of the second respondent the response was unfavourable and Annexure III letter dated 31-10-06 was issued to the petitioner claiming that the Government has got right to enter into any of the areas and carry out any necessary work without payment of any compensation. According to the petitioner he is entitled for compensation since damages have been sustained by him due to acts of the respondents. When a specific request was made for compensation, he was informed that the issue has been taken up with JCDA (Navy). Noticing that nothing has been forthcoming the petitioner on 30-6-2007 sent a letter requesting for appointment of an AR. N0. 11/08 -3- arbitrator and Annexure IV is copy of that letter. There was no favourable response to Annexure IV. Subsequent to Annexure IV, Annexure V notice dated 4-2-2008 was also issued . But there was no favourable response to Annexure V either and hence this arbitration request. 2. A detailed counter affidavit has been filed on behalf of the 2nd respondent denying the allegations and contending interalia that the claim for arbitration is highly belated; that upon expiry of the period of the first contract he would execute the second contract Annexure II and continue the arrangement for the three year period from 2004 to 2007; that the claim for compensation in respect of the first three year period from 2001 to 2004 has been waived by executing the fresh contract. It is also contended that the arbitration request is not maintainable since there was no request to appoint an arbitrator within the statutory period of thirty days. 3. I have heard the submissions of Sri.Kaleeswaram Raj, learned counsel for the applicant and those of Sri.S.Krishnamoorthy, learned standing counsel for the Union Government. 4. Clause 9 of Annexures I and II reads as follows: “The Flag Officer Commanding-in-Chief, Southern Naval Command, Kochi or any officer deputed by him shall be entitled AR. N0. 11/08 -4- to withdraw any area included in the agreement which may be required for military purposes or on account of security reasons. The contractor will be refunded the proportionate compensation as assessed by the Flag Officer Commanding-in-Chief, Southern Naval Command, Kochi in respect of which the removal of usufructuary rights have been withdrawn.” Clause 27 of the above Annexures reads as follows: “In the event of any question, dispute or difference arising under these presents or in connection therewith (except as to any matters the decision of which is specially provided for by these presents) the same shall be referred to the sole arbitration of an officer appointed to be the arbitrator by the Flag Officer Commanding-in-Chief, Southern Naval Command, Kochi.” In view of clauses 9 and 27 as quoted above it has to be noticed that claims for compensation and resolution of disputes regarding such claims through arbitration are certainly contemplated by Annexures I and II. At the same time I am not prepared to say that the contention of the respondents that the applicant's claims at least those arising out of Annexure I are highly belated and barred by principles of waiver and estoppel is totally without merit. In my opinion whether the claims of the applicant are barred due to any legal principle itself can be made an issue for arbitration and settled by the arbitrator. I am not impressed by the contention that the arbitration request is not maintainable because in the demand for arbitration the applicant had not stipulated the period of thirty days for appointment of arbitration AR. N0. 11/08 -5- by the second respondent. All the legal contentions and the contentions on merits raised by respondents can be raised by them before the arbitrator in which case the contentions will be enquired into and settled by the arbitrator. Both sides agree that a retired District Judge can be appointed as arbitrator. There is no objection to the appointment of Sri.A.K.Joseph, Retired District Judge, Aryappallil House, Pakalomattom PO., (via) Kuravilangad, Kottayam District as the arbitrator. Hence allowing the arbitration request Sri.A.K.Joseph, Retired District Judge is appointed as arbitrator for resolving all the disputes between the parties over and in respect of Annexures I and II. The arbitrator will invite pleadings and the respondents are permitted to raise all the contentions they have raised before this court regarding the maintainability of the claim for arbitration before the arbitrator. Arbitrator will enquire into all the contentions and address them, while passing the award. The arbitrator will enter on reference at his earliest and will pass award in accordance with law as expeditiously as possible. (PIUS C.KURIAKOSE, JUDGE) ksv/-