Delhi High Court M/S Hcil, Adhikarya Arss (Jv) vs Rail Vikas Nigam Ltd. on 14 December, 2016 % Judgment delivered on: 14.12.2016 + O.M.P. (T) (COMM.) 60/2016 & IA No.10971/2016 M/S HCIL, ADHIKARYA ARSS (JV) ..... Petitioner versus RAIL VIKAS NIGAM LTD. ..... Respondent WITH + O.M.P. (T) (COMM.) 61/2016 & IA No. 10973/2016 M/S HCIL, ADHIKARYA ARSS (JV) ..... Petitioner versus RAIL VIKAS NIGAM LTD. ..... Respondent Advocates who appeared in these cases: For the Petitioner : Mr Arvind Minocha and Mr Mayank Kshirsagar. For the Respondent : Mr Aman Sinha, Senior Advocate with Mr Anil Seth and Mr Parvesh Thakur. CORAM HON'BLE MR JUSTICE VIBHU BAKHRU JUDGMENT VIBHU BAKHRU, J 1. The petitioner (hereafter 'HCIL') has filed these petitions under Section 14 of the Arbitration and Conciliation Act, 1996 (hereafter 'the Act'), inter alia, praying that the Arbitral Tribunal constituted to adjudicate the disputes between the parties be declared as de jure and de facto incompetent to proceed and to terminate the mandate of the Arbitral Tribunal. O.M.P. (T) (COMM.) 6061/2016 Page 1 of 12 2. The material facts and the issues involved in both the petitions are common and, therefore, these petitions were heard together. 3. HCIL (the petitioner) is a joint venture company constituted by Harish Chandra India Ltd., PT Adhikarya and ARSS Infrastructure. 4. They were awarded the works for construction of road bed (excluding major bridges) facilities and general electrification for doubling of railway line between BarangRajatgarh, CuttackBarang and Barang Khurda Road in Orissa and a contract dated 04.09.2006 was executed between the parties for the works valued at `1,51,95,56,306/. On the same date, that is, 04.09.2006, a separate contract was also executed between the parties for construction of major bridges in connection with the doubling of the railway lines between BarangRajatgarh, CuttackBarang and Barang Kurda Road in Orissa. The value of the works in the said contract were specified at `1,31,02,94,667/. Both the contracts (hereafter referred to as 'the Contracts') were to be completed within a period of 24 months from 07.09.2006. 5. According to HCIL, there were various delays and defaults on the part of the respondent (hereafter 'RVNL'). It is further alleged that in order to cover up the lapses, RVNL terminated the Contracts on 30.11.2011, even though HCIL had completed almost 90% of the works awarded. 6. The Contracts include a similarly worded arbitration clause. In terms that clause, the disputes between the parties are to be adjudicated by an arbitral tribunal consisting of three arbitrators; one to be appointed by HCIL, another to be appointed by RVNL and the presiding arbitrator to be appointed jointly by the arbitrators appointed by the parties. O.M.P. (T) (COMM.) 6061/2016 Page 2 of 12 7. In view of the disputes between the parties, HCIL invoked the arbitration clause by separate letters dated 11.06.2015 and nominated Mr V.S. Karandikar as its nominee arbitrator. RVNL nominated Mr Surendra Kumar as an arbitrator and both Mr V.S. Karandikar and Mr Surendra Kumar appointed Mr Satish Kumar Singla as the Presiding Arbitrator. HCIL states that it became aware of the constitution of the arbitral tribunal on receipt of a letter dated 17.11.2015 sent by Mr Satish Kumar Singla, the Presiding Arbitrator, for convening the first meeting on 01.12.2015. 8. The controversy involved in these petitions relates to the eligibility of Mr Surendra Kumar as an arbitrator and HCIL's challenge to his appointment. According to HCIL, its challenge to appointment of Mr Surendra Kumar as an arbitrator was accepted and, therefore, the mandate of the Arbitral Tribunal with Mr Surendra Kumar as a member to proceed further stood de jure and de facto terminated. This is disputed by RVNL. 9. HCIL has also pleaded that there are circumstances existing which give rise to justifiable doubts as to the impartiality and independence of Mr Surendra Kumar as an arbitrator since he is also the Executive Director of RVNL. However, Mr Arvind Minocha, learned counsel appearing for HCIL fairly conceded that HCIL's challenge as to the appointment of the arbitrators could not be agitated in these proceedings; in terms of Section 13(5) of the Act, the issue would have to be agi