IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOTTATHIL B.RADHAKRISHNAN THURSDAY, THE 25TH JUNE 2009 / 4TH ASHADHA 1931 AR.No. 28 of 2008() ------------------- PETITIONER --------------- C.G.GOVINDAN KARTHA, S/O.ERAVI GOVINDAN KARTHA, AGED 58, CHIRAL HOUSE, KUMMANODE PATTIMATTOM PO., ERNAKULAM PIN-683 562 BY ADV. SRI.V.J.JOSEPH SMT.M.V.LIGI SMT.LISSY JOSEPH SRI.P.K.ABDUL RAHIMAN SRI.C.C.SALAS RESPONDENT(S): --------------- 1. THE GENERAL MANAGER S.RAILWAY, HEAD QUARTERS OFFICE, PARK TOWN, CHENNAI-600 003 2. THE DEPUTY CHIEF ENGINEER (CONSTRUCTION), S.RAILWAY, THIRUVANANTHAPURAM ADV. SRI.N.B.SUNIL NATH,SC. SRI.B.KRISHNAMANI, S.C. THIS ARBITRATION REQUEST HAVING BEEN FINALLY HEARD ON 25/06/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: THOTTATHIL B.RADHAKRISHNAN, J. ------------------------------------------- A.R.No.28 OF 2008 ------------------------------------------- Dated this the 25th day of June, 2009 O R D E R 1.This is a request made under Section 11(6) of the Arbitration Conciliation Act, 1996. The request is filed and registered with this Court on 8.7.2008. 2.There is no dispute between the parties that there is an arbitration agreement between them as defined in Section 2(1) (b) of the Act. The arbitration clause classifies the contracts on the basis of the value of the claims in relation to which arbitration is sought for. If the claims are above Rs.10 lakhs, the agreement provides for an Arbitral Tribunal consisting of a panel of three Gazetted Railway Officers, not below JA grade or two Gazetted Railway Officials not below JA grade and a Railway Officer retired not below the rank of SAG officer as the arbitrators. For that purpose, the Railways have to send a panel of more than three names of Gazetted Railway Officers of one or more departments of the Railways, which may also AR.28/08 Page numbers include the name(s) of retired Railway Officer(s) empaneled to work as Railway Arbitrator, to the Contractor within 60 days from the date when a written and valid demand for arbitration is received by the General Manager. The Contractor will be asked to suggest to the General Manager up to two names out of the panel for appointment as Contractor's nominees within 30 days from the date of dispatch of the request by the Railways. The General Manager has to appoint at least one out of them as the Contractor's nominee and will also simultaneously appoint the balance number of arbitrators either from the panel or from the Presiding Arbitrator from amongst the three arbitrators so appointed. The General Manager shall complete this exercise of appointing the Arbitral Tribunal within 30 days from the receipt of the names of Contractor's nominees. 3.On 1.11.2007, the petitioner placed his claims before the General Manager. Though the opening clause in the arbitration agreement provides for the Railways to give its AR.28/08 Page numbers reply to it and the entitlement of the Contractor to claim for appointments of arbitrator and for recourse to arbitration, either on being dissatisfied by the reply of the Railways or on the failure of the Railways to answer, what was done following the raising of claims on 4.6.2008 was that the list of names of four officers of the Railways was forwarded to the Contractor for him to select two of them. Following that, on 19.6.2008, the Contractor notified the names of Sri.C.Somasekaran and Sri.C.Nandakumar, two among those who were included in the list given by the Railways on 4.6.2008. Thereafter, nothing happened till the institution of this arbitration request on 8.7.2008. After this request was registered with this Court on 8.7.2008, the Railways appointed a three member Arbitral Tribunal on 19.8.2008. 4.With the aforesaid facts, the petitioner stands to say that following the judgment of the Apex Court in Datar Switch Gears Ltd. v. TATA Finance Ltd. [(2000) 8 SCC 151] and the Division Bench of this Court in Divisional Railway Manger v. AR.28/08 Page numbers West Cost Agencies [2005(2) KLT 734], the Railways did not have the right to make any appointment of arbitrator on 19.8.2008 after the registration of this arbitration request on 8.7.2008 and any right to make appointment had ceased by the institution of this arbitration request. In West Cost Agencies(supra), this Court specifically dealt with the provisions in the General Conditions of contract of the Railways, particularly clause 64, which is the arbitration agreement in the case in hand also. Following the enunciation of law in paragraphs 11 and 12 of that judgment and the ratio of Datar Switch Gears Ltd (supra), quoted and relied on by this Court in West Cost Agencies, the submission of the petitioner stands. Under such circumstances, the appointment purported to have been made by the Railways on 2.4.2008 is no appointment and that exercise is one without authority in as much as the appointment was made after the power to do so has ceased in terms of the law laid in Datar Switch Gears Ltd . AR.28/08 Page numbers 5.With the aforesaid, the appointment procedure agreed upon by the parties has failed and necessary measure in terms of Section 11(6) of the Act needs to be taken as the guideline for the choice of the arbitrator being that provided in Sub section 8 of Section 11. The appointment procedure in clause 64 of the General Conditions of contract of the Railways does not insist appointment of any person with any specified specilised qualification or expertise in the field of Engineering, Accounting etc. It only insists on the appointment of a Gazetted Railway Officer of a particular rank. That is sufficient guideline to hold that no expertise of any peculiar nature is required for the appointment. The subject matter of the contract is the work of provision of road approach and circulating area at Nemom and Parassala as part of conversion into crossing station. I do not find any ground as to why a former Judge of this Court is not to be appointed as an arbitrator. AR.28/08 Page numbers 6. For the aforesaid reasons, this arbitration request is allowed appointing Mr.Justice B.M.Thulasidas, former Judge of this Court as the arbitrator. THOTTATHIL B.RADHAKRISHNAN, Judge. kkb.30/6.