Delhi High Court Orders Tbea Energy India Private Limited vs M/S Bharat Heavy Electricals Limited on 8 February, 2021 $~5 * + ARB.P. 508/2020 and IA 1793/2021 TBEA ENERGY INDIA PRIVATE LIMITED ..... Petitioner Through: Mr Vinam Gupta and Ms Phalguni Nigam, Advocates. versus M/S BHARAT HEAVY ELECTRICALS LIMITED ..... Respondent Through: Mr Atul Shanker Mathur, Ms Priya Singh and Mr Umang Katuriya, Advocates. HON'BLE MR. JUSTICE VIBHU BAKHRU ORDER % 08.02.2021 1. The petitioner has filed the present petition, inter alia, praying that a Sole Arbitrator be appointed to adjudicate the disputes that have arisen between the parties in connection with a Purchase Order dated 18.12.2017 [hereafter 'the Agreement']. The terms and conditions as agreed between the parties includes an Arbitration Clause which is set out below: "19 ARBITRATION: In the event of any dispute emanating from and relating to this contract, the matter shall be referred to the sole arbitration of the person appointed by the competent authority of BHEL. Subject to aforesaid, the provisions of "The Arbitration and Conciliation Act, 1996" and the rules made thereunder as amended from time to time in India shall apply to the arbitration proceedings. The venue of arbitration shall be in New Delhi. Further there shall be no claim for any prereference or pendentelite interest on the claims and any claim for such interest made shall be void. However, in case of contract with Public Sector Enterprise / Undertaking (PSE/PSU) or Govt. Dept., the extant guidelines of Govt. of India shall be followed." 2. Concededly, disputes have arisen between the parties in connection with the said agreement. It is also not disputed that the petitioner had issued a notice dated 20.08.2020, invoking the said Arbitration Clause. The petitioner did not receive any response to the same and consequently, filed the present petition on 01.10.2020. 3. Mr Gupta, learned counsel appearing for the petitioner states that the said petition was served to the respondent on 05.10.2020. It is contended that after the petition was served to the respondent, the respondent had sent an email dated 06.10.2020, suggesting the name of three arbitrators, one of whom would be appointed as the Sole Arbitrator. 4. Mr Gupta contends that although, the petitioner had requested the respondent to provide the names of Arbitrators on the panel maintained by it, the Arbitration Clause did not provide for any such mechanism suggesting a panel of three Arbitrators, as done by the respondent. 5. Mr Atul Mathur, learned counsel appearing for the respondent submits that in view of the decision of the Supreme Court in Voelstapine v. Delhi Metro Railway Corporation: (2017) 4 SCC 665, the respondent has prepared a broadbased panel of Arbitrators and it has suggested the names of three Arbitrators from the said panel. 6. However, he did not contest that the respondent had failed to suggest the name of any Arbitrator within a period of thirty days from the receipt of the notice invoking Arbitration. The respondent had also not taken any steps for the appointment of an Arbitrator prior to the present petition being filed. 7. The Supreme Court in Perkins Eastman Architects DPC and Anr. v. HSCC (India) Limited: Arbitration Application No 32 of 2019, decided on 26.11.2019, the Court had held that in the event the authority was ineligible for being appointed as an Arbitrator, it could also not appoint an Arbitrator. Following the said decision, a Coordinate Bench of this Court in Proddatur Cable TV Digi Services v. Citi Cable Network Limited: (2020) 267 DLT 51, held that it would not be open for the party to unilaterally appoint an Arbitrator. 8. Even if it is accepted that the respondent had a right to appoint an Arbitrator, clearly the respondent had lost the said right since it had not acted with due dispatch prior to the filing of the present petition. Thus, as explained by the Supreme Court in Datar Switchgears v. Tata Finance Ltd. and Anr.: (2000) 8 SCC 151, the respondent had forfeited its right, if any, to appoint an Arbitrator in terms of the Arbitration Clause. 9. Considering that there is no dispute as to the existence of the Arbitration Agreement, this Court considers it apposite to allow the present petition. 10. The learned counsel for the parties jointly state Justice (Retd.) V.K. Jain be appointed as an Arbitrator. With the consent of the parties and at their