Case: You One Engineering &amp; Const Co. Ltd.&amp;Anr Vs. National Highways Authority Of India

settled in accordance with the Arbitration and Conciliation Act, 1996. The Arbitral Tribunal shall consist of 3 Arbitrators, one each to be appointed by the employer and the contractor. The third arbitrator shall be chosen by the two arbitrators so appointed by the parties and shall act as Presiding Arbitrator. In case of the failure of the two arbitrators appointed by the parties to reach upon a consensus within a period of 30 days from the appointment of the arbitrator appointed subsequently, the Presiding Arbitrator shall be appointed by the Council of Indian Road Congress. (emphasis supplied) 7. A bare reading of the above clause leaves no room for doubt that in case of failure of the two Arbitrators appointed by the parties to reach upon a consensus, the Presiding Arbitrator shall be appointed by the Council of IRC. 8. It may be stated at this stage that when the matter was placed before me on April 24, 2007, the parties invited my attention to the aforesaid clause and it was submitted that no consensus could be arrived at by the parties. Considering the fact situation and the Agreement, I thought it proper that the parties should undertake fresh exercise in the direction. I accordingly passed an order to make one more attempt. Unfortunately, however, the effort could not succeed and both the counsel stated that the matter will have to be decided on merits. Accordingly, the matter was heard. In my opinion, the learned counsel for the respondent is right that apart from clear language of Arbitration Clause, the point is also covered by YOU ONE Engineering. Almost in identical circumstances, this Court was called upon to consider the provisions of the Act and the right of the respondent to appoint Presiding Arbitrator under the Agreement. The Court held that it is the right of IRC to appoint Presiding Arbitrator in case the parties are not ad idem in appointment of Third/Presiding Arbitrator. 9. This Court stated: The arbitration agreement clearly envisages the appointment of the presiding arbitrator by IRC. There is no qualification that the arbitrator has to be a different person depending on the nature of the dispute. If the parties have entered into such an agreement with open eyes, it is not open to ignore it and invoke exercise of powers in Section 11(6). (emphasis supplied) 10. It is, no doubt, true that the High Court of Delhi has appointed Honble Mr. Justice Arun Kumar, retired Judge of this Court as Presiding Arbitrator in OMP No. 342 of 2004 vide its order dated May 22, 2006. The said order is on record of this case. Three paragraphs of the said order are important and they read as under: 3. Learned counsel for the parties jointly state that whole issue can be sorted out by having a panel of three arbitrators, with one arbitrator as nominated by each of the parties and the presiding arbitrator to be appointed by this Court with the joint consent of the learned counsel for the parties. It may be noticed that as on date the petitioner has nominated Mr.L.R.Gupta, Director General Works, CPWD (Retd.) while respondent has nominated Justice S.B.Wad (Retd.). Justice S.B.Wad was nominated in place of Justice A.K.Srivastava (Retd.), who expressed his inability to act as an arbitrator. 4. Learned counsel for the parties propose that Justice Arun Kumar (Retd. Judge of the Supreme Court), 10, Krishna Menon Marg, New Delhi - 110 001 (Phone : 2301-2175) be appointed as the presiding arbitrator and arbitral tribunal be constituted accordingly. 5. The constitution of the presiding arbitrator and arbitral tribunal as proposed by learned counsel for the parties is accepted by this Court and the said tribunal shall proceed to enter upon reference and determine the dispute between the parties. Ordered accordingly. The constitution of the tribunal be Justice Arun Kumar (Retd.) as the presiding arbitrator, Mr.L.R. Gupta and Justice S.B. Wad (Retd.) as the two other members of the arbitral tribunal. The fee shall be fixed by the tribunal itself. (emphasis supplied) 11. The learned counsel for the respondent was right when he submitted that the order was based on consent of the parties. As in the present case, there is no such consent, the Court has to consider the matter by interpreting an Arbitration Clause. Clause 3, as observed earlier, is explicitly clear and there is no ambiguity. Again, the controversy is decided by this Court in YOU ONE Engineering. In my view, therefore, the petitioners cannot compel the respondent to agree for a retired Judge of this Court or retired Chief Justice of a High Court, senior to Honble Mr. Justice Mohta as Presiding Arbitrator. 12. It was finally submitted that even if this Court is of the view that no such direction can be issued or order can be passed, it may be appreciated that the petitioners have chosen a retired Chief Justice of a High Court as their Arbitrator and appropriate observations may be made so that IRC may appoint retired Judge of this Court or a retired Chief Justice of a High Court to be the Presiding Arbitrator. That would enable the petitioners to avail services of an Arbitrator appointed by them. I appreciate the anxiety of the petitioners. In my view, however, when the Arbitration Clause is clear and the point is concluded by a decision of this Court, it would not be proper on my part to make any such observation. It is, however, open to the respondent to take an appropriate decision in the matter keeping in view the facts in their entirety. I may only state that this decision will not inhibit the respondent in taking any decision as it thinks fit. In view of the above legal position, I express no opinion on the contention of the parties as to whether the controversy raised is or is not of a technical nature. Since it is not necessary for me to enter into that question, I leave the matter there.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]7. A bare reading of the above clause leaves no room for doubt that in case of failure of the two Arbitrators appointed by the parties to reach upon a consensus, the Presiding Arbitrator shall be appointed by the Council of IRC8. It may be stated at this stage that when the matter was placed before me on April 24, 2007, the parties invited my attention to the aforesaid clause and it was submitted that no consensus could be arrived at by the parties. Considering the fact situation and the Agreement, I thought it proper that the parties should undertake fresh exercise in the direction. I accordingly passed an order to make one more attempt. Unfortunately, however, the effort could not succeed and both the counsel stated that the matter will have to be decided on merits. Accordingly, the matter was heard. In my opinion, the learned counsel for the respondent is right that apart from clear language of Arbitration Clause, the point is also covered by YOU ONE Engineering. Almost in identical circumstances, this Court was called upon to consider the provisions of the Act and the right of the respondent to appoint Presiding Arbitrator under the Agreement. The Court held that it is the right of IRC to appoint Presiding Arbitrator in case the parties are not ad idem in appointment of Third/Presiding ArbitratorThe arbitration agreement clearly envisages the appointment of the presiding arbitrator by IRC. There is no qualification that the arbitrator has to be a different person depending on the nature of the dispute. If the parties have entered into such an agreement with open eyes, it is not open to ignore it and invoke exercise of powers in Section 11(6).10. It is, no doubt, true that the High Court of Delhi has appointed Honble Mr. Justice Arun Kumar, retired Judge of this Court as Presiding Arbitrator in OMP No. 342 of 2004 vide its order dated May 22, 2006. The said order is on record of this case. Three paragraphs of the said order are important and they read as under:3. Learned counsel for the parties jointly state that whole issue can be sorted out by having a panel of three arbitrators, with one arbitrator as nominated by each of the parties and the presiding arbitrator to be appointed by this Court with the joint consent of the learned counsel for the parties. It may be noticed that as on date the petitioner has nominated Mr.L.R.Gupta, Director General Works, CPWD (Retd.) while respondent has nominated Justice S.B.Wad (Retd.). Justice S.B.Wad was nominated in place of Justice A.K.Srivastava (Retd.), who expressed his inability to act as an arbitrator4. Learned counsel for the parties propose that Justice Arun Kumar (Retd. Judge of the Supreme Court), 10, Krishna Menon Marg, New Delhi - 110 001 (Phone : 2301-2175) be appointed as the presiding arbitrator and arbitral tribunal be constituted accordingly5. The constitution of the presiding arbitrator and arbitral tribunal as proposed by learned counsel for the parties is accepted by this Court and the said tribunal shall proceed to enter upon reference and determine the dispute between the parties. Ordered accordingly. The constitution of the tribunal be Justice Arun Kumar (Retd.) as the presiding arbitrator, Mr.L.R. Gupta and Justice S.B. Wad (Retd.) as the two other members of the arbitral tribunal. The fee shall be fixed by the tribunal itself. (emphasis supplied)11. The learned counsel for the respondent was right when he submitted that the order was based on consent of the parties. As in the present case, there is no such consent, the Court has to consider the matter by interpreting an Arbitration Clause. Clause 3, as observed earlier, is explicitly clear and there is no ambiguity. Again, the controversy is decided by this Court in YOU ONE Engineering. In my view, therefore, the petitioners cannot compel the respondent to agree for a retired Judge of this Court or retired Chief Justice of a High Court, senior to Honble Mr. Justice Mohta as Presiding Arbitrator12. It was finally submitted that even if this Court is of the view that no such direction can be issued or order can be passed, it may be appreciated that the petitioners have chosen a retired Chief Justice of a High Court as their Arbitrator and appropriate observations may be made so that IRC may appoint retired Judge of this Court or a retired Chief Justice of a High Court to be the Presiding Arbitrator. That would enable the petitioners to avail services of an Arbitrator appointed by them. I appreciate the anxiety of the petitioners. In my view, however, when the Arbitration Clause is clear and the point is concluded by a decision of this Court, it would not be proper on my part to make any such observation. It is, however, open to the respondent to take an appropriate decision in the matter keeping in view the facts in their entirety. I may only state that this decision will not inhibit the respondent in taking any decision as it thinks fit. In view of the above legal position, I express no opinion on the contention of the parties as to whether the controversy raised is or is not of a technical nature. Since it is not necessary for me to enter into that question, I leave the matter there