IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Arb. Cae No. 36 of 2011 Date of decision: 29.9.2011 M/s Effluent Equipments …..petitioner vs. Chief Executive Officer and ors …..respondents CORAM: - HON’BLE MR. JUSTICE HEMANT GUPTA Present: - Mr. Ashwani Talwar, Advocate for the petitioner Mr. N.C. Sahni, Advocate for respondent No. 1 Mr. Amit Rawal, Advocate for respondent No. 2. HEMANT GUPTA, J The parties in this petition entered into an agreement dated 13.3.2007 in respect of operation and maintenance of existing 1.5 MLD Common Effluent Treatment Plant at Leather Complex, Jalandhar for three years. Such agreement was executed in terms of conditions of Notice Inviting Tenders which contain a following Arbitration Clause which reads as under: - 6. If any question, difference or objection, whatsoever, shall arise in any way connected with or arising out of this instrument of the meaning or operation of any part thereof or the rights, duties, or liabilities of either party, then save in so far as the decision of any such matter is hereinbefore provided for and has been so decided, every such matter including whether it has been finally decided accordingly, or whether the contract should be terminated or has been Arb. Case No. 36 of 2011 rightly terminated and as regards the right or obligation of the parties as the result of such termination shall be referred for arbitration to two arbitrators (1) Chairman, PETS and (2) to be nominated by the consultant/contractor within 180 days or 6 months from the payment of final payment of contract or the consultant/contractor is not willing to receive the payment from the date of registered notice sent to him that his final bill is ready for payment and the decision of the arbitrators shall be final and binding.” The dispute arose between the parties. The petitioner nominated Sh. Puran Goyal, as its arbitrator vide the communication dated 25.1.2011. Respondent, on the other hand, consented to the appointment of Chairman of the Punjab Effluent Treatment Society (PETS) (Director Industries, Punjab) as the Arbitrator on 28.1.2011 (Annexure R 1/1). Another communication dated 10.2.2011 has been addressed to the petitioner in continuation of its earlier letter dated 28.1.2011. Today, during the course of hearing, Mr. Sahni states that respondent No. 2 has no objection to Mr. Puran Goyal to act as the arbitrator nominated by the contractor. Learned counsel for the petitioner has vehemently argued that in terms of Section 10 of the Arbitration and Conciliation Act, 1996 (for short the ‘Act’) , the Arbitral Tribunal has to be in odd numbers. Since, the agreement contemplates the appointment of two arbitrators, therefore, 2 Arb. Case No. 36 of 2011 such clause cannot be given effect to and the Arbitral Tribunal of three arbitrators or the sole arbitrator be constituted. Having heard learned counsel for the parties, I do find merit in the argument raised by learned counsel for the petitioner. Section 10 of the Act contemplates that Arbitral Tribunal shall be of odd numbers. Keeping in view the purpose of the said provision that in case of difference of opinion between the two arbitrators, disputes cannot be resolved Therefore, the appointment of third arbitrator is necessary to meet out the said situation. In view of the said fact, present petition is disposed of with the direction to the arbitrators nominated by the parties to choose the presiding arbitrator in their first meeting who shall join the proceedings, in case of any difference of opinion amongst the nominated arbitrators. Disposed of. (HEMANT GUPTA) JUDGE 29.9.2011 Preeti 3