Madras High Court

Globe Ground India Private Limited vs Airports Authority Of India on 29 April, 2024

Author:
C.Saravanan

Bench:
C.Saravanan

Arb.O.P.No.312 of 2023

IN THE HIGH COURT OF JUDICATURE AT MADRAS

RESERVED ON : 14.12.2023

PRONOUNCED ON : 29.04.2024

CORAM :

THE HONOURABLE MR.JUSTICE C.SARAVANAN

Arb.O.P.(Com.Div.)No.312 of 2023
and A.No.3478 of 2023

Globe Ground India Private Limited
E9, Connaught Place,
New Delhi 110 001. .. Petitioner

vs.

1. Airports Authority of India
Rajiv Gandhi Bhawan,
Safdarjung Airport,
New Delhi.

2. The Airport Director,
Airport Authority of India,
Chennai Airport,
Chennai. ... Respondent

Prayer:- Original Petition is filed under
Section 34(2)(3)
of the Arbitration
and Conciliation Act, 1996 praying to set aside the Award dated 18.05.2023
passed by the learned Sole Arbitrator in respect of the disputes between the

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petitioner and the 1st respondent under the License Agreement dated
27.07.2016.

For Petitioner : Mr.Sathish Parasaran
Senior Counsel
for Mr.R.Palaniandavan

For Respondent : Mr.R.Sankaranarayanan
Senior Counsel
for Mr.Rajkumar Jhabakh

ORDER

The petitioner is aggrieved by the Impugned Award dated 18.05.2023

passed by the learned Arbitrator.

2. By the aforesaid Impugned Award dated 18.05.2023, learned

Arbitrator has rejected the Statement of Claim of the petitioner and has

allowed the Counter Claim of the respondents. The prayer of the petitioner

in its Statement of Claim dated 11.08.2022 reads as under:-

(i) For a direction to the respondent to refund the
Advance License fee of Rs.14,98,961/- paid by the
petitioner to the respondent.

(ii) For a direction to the respondent to return the Bank

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Guarantee issued by the petitioner favour of the
respondent towards Security Deposit of Rs.1,20,41,977/-.

(iii) For a directing to the respondent not to encash the
Bank Guarantee during the pendency of the present
Arbitration proceeding.

(iv) For a directing to the respondent to refund the
Electricity Deposit of Rs.1,00,000/- paid by the
petitioner to the respondent.

(v) For a directing to the respondent to pay damages of
Rs.31,11,723/-

(vi) For Award interest @12% p.a. on the above prayers

(i) - (v) from the date of first demand i.e. 07.08.2018.

(vii) For a directing to the respondent to pay Rs
5,00,000/- towards cost of the present proceedings.

3. The Impugned Award preceded a decision of the Dispute

Resolution Committee (DRC) wherein the claims of the petitioner were

rejected on 28.12.2021. Following issues were framed before the Dispute

Resolution Committee (DRC) : -

i. What is the scope of license awarded to the
Claimant? Whether there was any restriction
on operation imposed on the claimant post
award of the tender?

ii. Whether Claimant is liable to pay the license.
If yes, what is the quantum?

iii. Whether the Claimant is entitled to any rebate
in the License Fee payable to respondent?

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iv. Whether the Claimant is entitled for the refund
of the security deposit for Rs.1,07,05,000/- and
Rs.14,98,961/- and Rs.1,00,000/- towards
electricity deposit and damage of
Rs.31,11,723/- from Respondent?

4. The Dispute Resolution Committee (DRC) rejected the claim of the

petitioner on 28.12.2021 with the following overrule:-

“Observation
Committee has come across during the course of
hearing and documents produced that the previous
contract for the Meet and Greet Service was
cancelled based on non-issuance of AEPs by BCAS.
Commercial Directorate should have reviewed the
tender condition before inviting fresh tender to avoid
disputes/litigation.”

5. Operative portion of the Impugned Award dated 18.05.2023 reads

as under:-

“9 Findings of Tribunal and Award

The following issues emerge from the various rival
submission made by Claimant and Respondent:

(a) Responsibility and Obligation to obtain AEPS:-

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It may be brought out that Draft contract was part of
NIT. Considering various clauses of NIT, Award letter
and Agreement, Tribunal observed that the obligation
to obtain and keep valid various licenses, passes and
other permits which would within its meaning include
the AEPs* was solely with the Claimant and not the
Respondent. The Claimant in its opening statement in
Statement of Claim had admitted that they were
providing ground handling services at airports. They
had also filed documents of BCAS# security
clearance issued to them in respect of Banglore
airport dated 28-05-2013 (page 117 & 118 of SoC)
for proving ground handling services valid for 5
years. As per letter BCAS reserves the right to revoke
the security clearance at any time without assigning
any reasons, in the interest of of national/civil
aviation security.

Moreover, no other documents /evidence have been
produced by Claimant substantiating their contention
that Respondent is responsible for obtaining AEPs.
The clauses unambiguously put the onus of obtaining
AEPs on Claimant.

Further, no document have been produced by
Claimant seeking any clarity on this if it was not
clear to Claimant before making bid as part of its due
diligence. The Claimant is one of the three bidder and
emerged H1 by quoting 42% above the minimum
MMLF( email dated 5-04-2023 &6-04-2023). This
indicate the extent of due diligence carried out by the
Claimant. Claimant being an existing concessionaire
at airports and as part of his due diligence exercise
for bidding for this NIT, it would be reasonable to

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conclude that the Claimant was well aware of its
obligation to procure AEPs and various permissions
and permits (process related thereto) that have to be
obtained for providing meet and greet services in the
airport premises and also that BCAS is the designated
authority for issue of AEPs and not the Respondent.
BCAS is an independent authority and Respondent
does not have any control over the its functioning and
processes /procedures or decisions. The Tribunal
cannot go beyond the scope of the contract when the
contract states that the obligation to obtain the AEPs
is that of the Claimant. Therefore in the facts and
circumstances Claimant cannot shift its obligation for
AEPs on Respondent. The Tribunal decides this issue
against the Claimant.

*Airport Entry Pass
# Bureau of Civil Aviation Security

(b) Whether Respondent extended cooperation in
resolving the AEPS issue
From the submissions made by the Respondents and
not contradicted by Claimant, the Tribunal conclude
that Respondent had extended necessary cooperation
to Claimant in resolving the issue of AEPs.

(c) Based on the rival submission made by Claimant
and Respondent the Tribunal observed that services
performed under the contract can be divided under the
three periods. The contract was awarded on 27-06-16
for a period of 3 years effective from 27-07-16.

Period 09-08-2016 to 16-10-2016
Based on submissions made by Respondent and
Claimant Tribunal observed that the operation of
services under the contract required issue of AEPs by
BCAS. Respondent issued temporary passes for the

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period 9-08-2016 to 11-08-2016 for Arrival and
Departure areas and for 29-08-16 to 16-10-2016 for
Arrival, departure, SHA, immigration areas. These
passe allowed access to all areas namely Arrival,
Departure, Security Hold Area, Immigration for all
terminals. However, the contention of Claimant that
these AEPs allowed access only till check in counters
and AEPs were not allowed beyond check-in-counters
resulting in provision of limited services by Claimant is
not based on facts.

Respondent have filed noting of its' security
department confirming issues of AEPs allowing access
to all areas namely Arrival, Departure, Security Hold
Area, Immigration during this period Representative of
Claimant in the meeting called by APD on 4-10-2016
confirmed that by and large they are able to provide
smooth services except for some issues in custom area
for which APD and Claimant agreed for some stop gap
arrangement. The Claimant vide letter dated 18-10-
2016 while requesting respondent to expedite
furnishing of information to BCAS confirmed that
AEPs are being issued valid for 3 or ten days which is
a big hassle The issuance of AEPs for longer duration
will ease the functioning to render our services
smoothly.

Claimant vide letter dated 10-03-2017 had applied for
Renewal (not Fresh) of AEPs for all terminals and
areas which further confirms that initial passes issued
by APD Chenna were for all areas. Claimant have not
filed any document substantiating its charge that AEPs
allowed only limited access till check in counters.
Further Claimant in the letter dated 7th August, 2018
(page 73 of SoC)
confirmed that rates of Rs750/ and Rs 500/ per pax
was levied from 29-08-2016 to 16-10-2016. The

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tribunal therefore concludes that there was no breach
of contract by Claimant/respondent and claimant
could provided full range of services as per letter of
Award during this period. Therefore Respondent was
within its rights to charge license fee as per award
letter for this period.

Period From 17-10-2016 to 5-06-2017
The Tribunal observed from the rival submissions
made by Respondent and Claimant that AEPs issued by
Respondent expired on 16-10-2016 and AEPs could
not be obtained from BCAS despite follow up by
Claimant and assistance provided by Respondent.
Claimant informed suspension of services and Services
remained suspended during this period.

Claimant vide letter dated 9-11-2016 requested
respondent to stop charging license fee from 17-10-
2016. Tribunal conclude that BCAS is designated
authority for issue of AEPs. AEPs are issued keeping in
view the national/aviation security concerns. Claimant
being existing operator was aware of risk /uncertainty
with regard to issue of AEPs
Claimant despite being aware that AEPs for custom
areas may not be issued ( Refer Minutes of meeting
dated 4-10-16 and meeting with Bureau of
Immigration 5-01-17) did not terminate the contract
instead unilaterally suspended the services.
The Tribunal observed that Respondent based on the
request of Claimant made through letter 9th November,
2016 did not raise bill for Licence fee for this period
even though there was breach of contract by Claimant.
As such there is no claim for License fee for this
period.

Period From 06-06-2017 to 19-04-2018

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As per Respondents' submission and not rebutted by
claimant, Claimant applied for AEPs on 01-06-2017
for the permitted ares and requested Respondent vide
letter dated 8-06-2017 to inform airline, ground
handlers and other agencies reopening of Namaskar
Meet and Greet Service about resumption of services.
The Tribunal observed that vide letter dated 17th July
2017 addressed to AGM (Commercial) Chennai
international Airport Claimant informed Respondent
resumption of Meet and Greet Services from 11-06-
2017. Relevant extract of the letter is reproduced
below.

"We are pleased to announce restart of "Namaskar"

Meet and Greet Services at Chennai international
airport effective from June 11, 2017 with limited areas
of services from curb side to departure check in
counter at price of Rs 300 INR including taxes. This is
due to AEP issued only for Arrival and Departure by
BCAS Other conditions communicated vide letter date
8th November 2017 for resuming the services were as
under.

• License fee be charged only for the days AEPs were
issued and GGI were able to conduct Services
•Space Rental shall be paid by GGI in accordance to
the invoice raised by AAI for the allotted space under
occupation of GGI
• Passenger charges are reduced from Rs 750/&Rs
500/ per passenger respectively to Rs300/ per
passenger at both Terminals. The Monthly license fee
may be proportionately reduced.

• AAI may kindly take up the issue with BCAS for
issuance of AEPs for all the areas as mentioned in the
NIT/Award letter

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Tribunal conclude from the above that AEPs for
Arrival and Departure areas were in place by 11-06-
2017 for providing the services as per revised scope of
work.

The Tribunal observed that BCAS vide letter dated 28-
04-2017 had decided to permit meet and greet services
in Airports with following conditions:

the meet and greet services may be permitted up to Q
area of pre PESO Points at domestic terminal, check in
area at international terminal. arrival hall including
baggage claim area of domestic and arrival hall of
international terminal other than custom and
immigration area
The tribunal does not find much substance in the
contention of the Claimant that they were not aware of
the BCAS letter dated 28-04-2017 before applying for
AEPs on 1-06-2017 and their communication dated 8th
June 2017 to Respondent to resume Services
However, they have admitted they could procure the
said letter at a very late stage but no
evidence/document was produced confirming the date
on which they could procure the said letter. Even after
becoming aware about the letter restricting the
services and meeting with Bureau of Immigration 5-
01-17 Claimant did not took any action to determine
the contract but continued to provide truncated
services until the expiry of notice period
Therefore Tribunal conclude that Claimant was aware
of of BCAS letter dated 28-04-2017 well before making
application for AEPs and resumed the truncated
services after carrying out detailed viability
assessment at revised terms. The Tribunal also does
not find any substance in the contention of Claimant
that Respondent was aware of the conditions contained

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in the BCAS letter dated 28-04-2017 and should not
have floated NIT. The NIT was issued in November
2015 whereas BCAS's letter is dated 28-04-2017 much
after NIT and award of work. Therefore, Respondent
floated the NIT as per the prevailing scenario and
could not have foreseen that such a decision will be
taken by BCAS. The Tribunal observed that this is a
conscious decision of Claimant (after a revised
business and viability assessment) out of his own
volition to resume services at a uniform price of Rs 300
as against Rs 750/ per pax in the international
Terminal and Rs 500/ per pax in domestic terminal. No
document from Respondent to Claimant was produced
by Claimant requesting him for resumption of services.
The Tribunal is inclined to agree with the submission
made by Respondent that scope of work as per the
award letter was much wider than the provision of
meet-and-greet services in the immigration area alone
[for which the AEPs were not given) and scope work is
severable. Tribunal observed that reduced scope of
services included all services except escorting in
immigration counters. The Respondents' acceptance of
request of the Claimant to reduce the license fee
proportionately and charge only for the days when
they could conduct business keeping in view its'
business interest resulted in to legally enforceable
binding amended contract. The Claimant continued to
provide truncated services till the expiry of notice
period for surrender of contract on 19-04-2018.
Tribunal does not find any substance/merit in the
Claimant's contention that the Respondent cannot
charge any amount from the Claimant despite having
exploited business opportunity at terms fixed by it and
agreed to by Respondent. The Claimant through its
various communication to Respondent had made
request to charge license fee at reduced rate and for

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period AEPs were issued and they could conduct
business. Respondent while forwarding the bill for
Rs1,20,41,977/ vide letter dated 11-01-2019 informed
Claimant that the details regarding AEPs issued for
the period of your operations have been reconfirmed
from our security Department as requested by you in
the previous meeting at office of Airport Director and
bill are raised proportionately as requested in your
letter dated 8-11-2017. The Tribunal finds no reasons
that having operated the concession and agreeing to
pay the charges the Claimant can now retract. This
will be against the principle of equity justice and fair
play. Following the doctrine of Estoppel Claimant does
not have any locus standi asking for waiver and
refusing to pay License fee and other charges.
The Tribunal decides the issue against Claimant and
Claimant is liable to pay Licensee fee and other
charges amounting to Rs 1,20,41,997/.

(c) Fraud/Misrepresentation / Concealment
The Tribunal after examining rival submissions
including case laws cited does not find much substance
in the pleadings of the Claimant alleging
fraud/misrepresentation / concealment by Respondent
or for that matter frustration of the contract, status of
contract ie.void or voidable, unequal terms as these
are of no relevance at this stage having exploited the
business opportunity offered by Respondent through
this NIT and accepted by Claimant as per terms and
condition of the contract out of his own volition and
after due diligence. The Tribunal also observed that
not one but three offers was received by the
Respondent for this facility and the Claimant emerged
the highest bidder by quoting 42% above the minimum
price which indicate the extent of due diligence carried
out by the Claimant. Further no such issue was raised

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during the currency of the contract or for that matter
before DRC. The claimant have not produced any
document to establish the alleged
misrepresentation/concealment/ fraud committed by
the Respondent so essential to make a contract
void/voidable in terms of
Indian Contract Act
1872.

Prima Facie Tribunal does not find much substance in
the Claimant's allegation of
fraud/misrepresentation/concealment. However, these
issues have criminal connotation and therefore can not
be subject matter of arbitration.

(d) Regarding termination of contract and lock in
period. Tribunal observed that license agreement
provided for multiple options for Termination of
Contract by either party Termination of Contract by
Claimant in February 2018 was a conscious business
decision to arrest further losses in view of their
inability to generate enough business as per the
submission vide Annexure 15(Page 165 of SoC) out of
business interest rather than anything else and it chose
not to terminate the contract even when it become
clear as early as 04-10-2016 that full range of services
could not be provided due to issue of AEPs. Claimant
after unilateral suspension of services from 16-10-
2016 to 7-06-2917 unilaterally resumed truncated
service at reduced fee from pax and reduced Licence
fee payment to Respondent. AEPs were valid till
December, 2018 at the time of Termination Tribunal
can not step in to their shoes.

(e)Damages
Claimant have made a claim of Rs 31,11,723/ as
damages and filed a certificate of a Chartered
Accountant. Claimant have brought out that because of
non issue of AEPs could generate revenue of Rs
7,93,765/ and have Incurred cumulative losses of

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Rs31,11,723/ which is solely attributable to
Respondent who could not facilitate AEPs as per
NIT/award letter. (Pg 175 & 176 of the Statement of
Claims.)
Respondent had submitted that it is relevant to note
that for a claim of unliquidated damages to be
sustained, the breach of the agreement has to be
proved by the Claimant, liability to pay any damages
will only arise in the event of a breach of contract. The
Claimant has not alleged any breach of contract on the
part of the Respondent except for feeble attempt to
state that the Respondents have allocated only 5
counters while they had agreed to allocate a total of 8
counters in the airport premises. Therefore, there is no
breach of the License Agreement by the Respondents
and hence no damages are to paid by the Respondent.,
Further Claimant has not adduced any evidence to
show that the amount claimed is in fact the loss caused
to the Claimant except for a letter from a Charted
Accountant.

Therefore, In such a position where no evidence is
provided to substantiate the losses except for an
unverified Chartered Accountant certificate whose
genuineness and authenticity could not be verified by
way of cross-examination of the Chartered Accountant
ought to be out rightly rejected.

Tribunal is inclined to agree with the submission made
by respondent that there is no breach on the part of
Respondent keeping in view that the contract operated
as per terms of award during 09-08-2016 to 16-10-
2016 and 11-06-2017 to 19-04-2018 as per amended
terms and conditions. Services remained suspended by
Claimant during 16-10-2016 to 10-06-2017.The
Tribunal observed that damages claimed are nothing
but losses incurred by the Claimant. Claimant by his

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own statement admitted that Respondent could not
facilitate AEPs as per NIT/award letter which ipso
facto means that primary obligation to procure AEPs
is of Claimant. It became clear to Claimant as early as
04-10-16 that there are cor complexities in the issue of
AEPs and Claimant failed to take steps to arrest losses,
the Tribunal also observed CA certificate is factually
incorrect as Claimant have not captured the revenue
generated during the 09-08-2016 to 16-10-2016.
No evidence has been provided to substantiate the
losses except for an unverified Chartered Accountant
certificate.

It was the duty of claimant to mitigate /reduce the
losses No such document evidencing any action by
Claimant in this have been submitted. No other claim
towards damages have been made.

There is no provision in NIT/Agreement guaranteeing
any minimum business Concession agreement for
operating a facility does not guarantee any business
and it is for Concessionaire to generate business and
assume business risk. The Claimant have failed to
generate business for which Respondent should not be
made to suffer.

Further as per para 8 of Other terms and condition of
Award Letter stipulated that "The Authority shall not
be in any way, be responsible for any loss suffered by
the licensee on account of business and no reduction in
licence fee shall be allowed in this account," This is
known risk undertaken by the Claimant while bidding
and considered in financial bid.

In view of the above Tribunal can not allow
enrichment of Claimant at the cost of Respondent. The
issue is decided against the Claimant.

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(f) Other Claims
Refund of advance
Tribunal have decided that Claimant is liable to pay
License fee and other charges amounting to Rs
1,20,41,997/. Tribunal decides that Advance License
fee of Rs 14,98,961 is refundable to claimant subject
to payment of Rs 1,20,41,997 or alternatively
Respondent may adjust Advance License fee amount
against dues.

Return of Bank guarantee issued by Claimant
Tribunal have decided that Claimant is liable to pay
License fee and other charges amounting to Rs
1,20,41,997/ Tribunal decides that Bank Guarantee
issued by Claimant may be returned to Claimant after
satisfaction of dues of Respondent
Direction to Respondent not to encash Bank
Guarantee during pendency of Present Arbitration
Proceeding

No document/ request to bank for encashment of BG
have been filed by Respondent or Claimant in this
matter. Arbitration Proceedings concluded on 23rd
March, 2023.

Tribunal conclude that there is no issue to be decided
by the Tribunal in this regard.

Refund of Electricity deposit of Rs 1,00,000/-
Tribunal have decided that Claimant is liable to pay
License fee and other charges amounting to Rs
1,20,41,997/ Tribunal decides that Electricity Deposit
of Rs100000/ is refundable to claimant subject to
payment of dues of Respondent
Award interest@ 12% p.a. on the above prayers (1) to

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(v) from the date of First demand ie 7-08-2018
Tribunal have decided that Claimant is liable to pay
License fee and other charges amounting to Rs
1,20,41,997/. In view of this the issue is decided
against the Respondent to pay Rs 5,00,000/ towards
Cost of present proceedings
The Tribunal have decided all Claims of the Claimant
against Claimant Therefore, the Tribunal does not find
any merit in the Claim of Rs 5,00,000/ towards cost of
proceedings. The issue is decided against the
Claimant.

(g) Respondent in its prayer to Tribunal had prayed
for direction to Claimant to pay the due amount of Rs
1,20,41,977/ along with interest @ 18% p.a. for the
period of delay
The Tribunal examined the prayer of the Respondent to
payment of Rs 1,20,41,997/ along with interest @18%
p.a. for period of delay.Agreement provides as under:

Para 6 The Licence fee shall be paid by 10th day of
every English calender month failing which simple
interest @12% p.a. on delayed payments for the first
month and thereafter 18% p.a. for maximum of two
months thereafter be payable, as per AAI credit policy
on all delayed payments without prejudice to the
authority's other rights and remedies.
Interest is the cost of capital/funds. By denying the due
payments of Respondent the respondent was wrongly
deprived of usage of these funds Interest is a natural
accretion on the capital. Payment of interest
constitutes a measure of restitution for such unjust
deprivation of funds. Therefore Tribunal decided the
issue of interest in favour of Respondent. Claimant is
liable to pay the amount due along with interest as per
agreement.

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(h) The Tribunal also decided to grant Respondent
pendent lite simple interest on the amount due @8%
from the date of invocation of arbitration up to date of
Award under
Section 31(7)
of Arbitration and
Conciliation Act 1996

(i) The award is to be satisfied within a period of
period of three months, failing which the award shall
carry compound interest @ 10% p.a. on the awarded
amount from the date of award till its payment.

(j) Before parting with matter The tribunal places on
record its appreciation for the valuable assistance
rendered Sh Raman Kapoor and by Dr P. K. Ray
learned Counsel for Claimant and Shri Raj Jhabakh
and his team at JM Legal learned Counsel for
Respondent and Sh.M. Selvanayagams JGM
Commercial Chennai Airport and his team.

This award is made in three sets: one each for the
Claimant one for the Respondents and one to be
retained by Sole Arbitrator with the requisite stamp
paper.”

6. The brief facts of the case are that the petitioner had participated in

a Tender floated by the respondent for hospitality service in the Chennai

Airport for Meet and Greet Service (Swagat Seva). The petitioner was

awarded the contract vide Annexure-2 on 27.06.2016 by the respondent.

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7. As per the aforesaid award in Annexure-2 dated 27.06.2016, the

petitioner was required to pay License fee for a sum of Rs.12,80,000/- per

month for the first year and thereafter Rs.14,08,000/- per month during the

second year and Rs.15,48,800/- during the third year.

8. Apart from the above, several other conditions were specified in

the aforesaid award. A License Agreement was also signed between the

petitioner and the respondent vide Agreement dated 27.07.2016. There is no

dispute regarding the compliance by the petitioner in so far as the amount

that was to be paid prior to the commencement of service under the

Agreement dated 27.07.2016.

9. It is the case of the petitioner that the respondent had suppressed

material information regarding access to the Airport beyond the ticketing

counter which was dictated by Bureau of Civil Aviation Security (BCAS).

Thus, the petitioner was unable to earn revenue to pay the aforesaid amount.

It is submitted that under these circumstances, the petitioner was

constrained to apply for the Claim Statement which has been rejected. On

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the other hand, the Arbitral Tribunal awarded the counter claim of the

respondent.

10. That apart, it is submitted that the award itself suffers from

Violation of
Section 12
of the Arbitration and Conciliation Act, 1996 read

with Schedule 7 to the
Arbitration and Conciliation Act, 1996
as the Arbitral

Tribunal constituted was without authority of law.

11. It is submitted that the Arbitrator appointed was a former

employee of the respondent. It is submitted that even though the petitioner

had expressed consent for appointment of the Arbitrator, the Arbitrator was

incapacitated from acting as an Arbitrator in view of
Section 12(1)
of the

Arbitration and Conciliation Act, 1996 read with
Section 5
read with Clause

(1) of VII of the Schedule Arbitration in the light of the decision of the

Hon'ble Supreme Court in
TRF Limited Vs. Energo Engineering Project

Limited
, (2017) 8 SCC 377.

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12.
In this connection, the learned counsel for the petitioner placed

reliance on the decision of the Honble Supreme Court in the case of
Bharat

Broadband Network Limited vs. United Telecoms Limited
, (2019) 5

SCC 755. A specific reference was made to Paragraph 20 from the

aforesaid decision.

13. It is submitted that Clause 30 of the General Terms and

Conditions of the License Agreement dated 27.07.2016 is void ab initio and

unenforceable and as such, any Award passed in furtherance thereto is liable

to be set aside. It is submitted that the courts have held in a catena of

decisions that an arbitration agreement/clause providing for such unilateral

appointment of a Sole Arbitrator is void ab initio. The respondent contends

that they provided a panel from which the petitioner chose an option. This

would not aid the respondent once the appointment procedure under the

agreement becomes non est and the only recourse would be for

appointment of a neutral arbitrator under
Section 11
of the Arbitration and

Conciliation Act, 1996.

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14. It is submitted that the Sole Arbitrator, Mr. Rajesh Bhandari was a

former Executive Director (F&A) of the first respondent. Thus, he was

ineligible for appointment in view of the statutory bar under
Section 12(5)

r/w. Entry 1 to the
VII Schedule to the Act
. Courts have repeatedly held that

an Award passed by a person who is ineligible for appointment as an

Arbitrator is bad in law and unenforceable.

15. It is submitted that de hors the above, the fact that the petitioner

selected a name does not aid the case of the respondent since there was no

express agreement in writing as envisaged under the proviso to
Section

12(5)
of the Act. It is further submitted that there is no agreement

specifically recording the issue of disqualification/ineligibility of the

Arbitrator and a clear/specific waiver of the same from the petitioner after

the dispute had arisen between the parties. Hence, the

disqualification/ineligibility will operate under
Section 12(5)
of the Act.

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16. It is further submitted that as such, the arbitration clause,

appointment procedure, right to appoint, choice of arbitrator etc., are all bad

in law, in view of which the Award ought to be set aside.

17. It is further submitted that the right of unilateral appointment to

an interest party makes the arbitration clause non est. Further, apart from the

fact that the appointed arbitrator cannot suffer statutory ineligibility, the

person appointing/nominating the arbitrator also should be eligible to be

appointed as an Arbitrator. Hence, the arbitration clause void and

unenforceable. Further, the Chairman/Member of the first respondent being

ineligible under the A&C Act, any appointment made by him whether single

or by way of a panel is hit by
Section 12(5)
of the Act. In the present case,

the proviso to
Section 12(5)
of the Act not being fulfilled, the appointment

and the consequent Award are bad in law.

18. It is further submitted that the Respondent, at the time of

admission, made a frail attempt to portray the selection of the Sole

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Arbitrator from a panel as being exempt from Proviso to
Section 12(5)
of

the Act by referring to Central Organisation for
Railway Electrification

(CORE) vs. ECI-SPIC-SMO- MCML (JV) A Joint Venture Co.
, (2020)

14 SCC 712, wherein the Hon'ble Supreme Court has held that an

arbitration clause providing for a panel of arbitrators from which selection

of a sole arbitrator was to be made was permissible in law.

19. It is further submitted that in CORE, the arbitration clause

provided for a panel, however, in the instant case, it provided for

appointment of a Sole Arbitrator by the Chairman/Member. Hence
,
the said

judgment
would not apply.

In any event, the view taken in CORE has been

doubted and referred to a larger bench by two separate Co-ordinate Benches

of the Hon'ble Supreme Court in
Union of India vs. Tantia Constructions

Limited
, 2021 SCC OnLine SC 271 and JSW Steel Ltd. Vs. South

Western Railway Ltd., 2022 SCC Online SC 1973, in which reference,

hearing is ongoing.

It is also pertinent to note that a Coordinate Bench of

the Hon'ble Supreme Court has distinguished the findings in CORE

subsequently in
Glock Asia-Pacific Limited Vs. Union of India
, (2023) 8

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SCC 226, to hold that the disqualification/ineligibility will continue to apply

to such appointment and the Award.

20. It is submitted that selecting one name from the panel provided

by the Respondent would not amount to an express waiver as per
Section

12(5)
of the Act, as the provision clearly mandates that the parties must

enter into a separate agreement in writing, after a dispute has arisen, to

expressly waive such disqualification. This position was further confirmed

in the case of Bharat Broadband.

21. It is further submitted that in the case of
P.Cheran vs. Gemini

Industries and Imaging Ltd.
reported in 2023 SCC Online Mad 1887, this

Hon'ble Court has held that participation in the arbitral proceedings or

having knowledge of the appointment of the arbitrator would not deprive

the rights of the Petitioner to challenge the appointment of the Arbitrator in

terms of
Section 34
of the Act setting forth the violation of
Section 12(5)
of

the Act. This is also in line with the scheme of the Act which provides under

Sections 11
&
and based on judgments, under
Section 34
of the Act that

this issue can be raised at any stage.

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22. It is submitted that the Meet and Greet Service for which the

tender was floated by the Respondent, involves assisting passengers in

completing all necessary formalities at the airport, from check-in all the way

to upto boarding of flight and vice-versa. This service entails providing

assistance to passengers in the (SHA) Security Hold Areas too, for which an

(AEP) Aerodrome Entry Permit had to be obtained from BCAS. Admittedly

the Respondent was in the know that BCAS was not providing AEPs to any

third parties. The said decision of BCAS was communicated to all airports,

including Chennai airport vide their communication dated 28.04.2017

informing them that the Meet and Greet Services may be permitted only till

Check-in counter and at the Arrival hall other than the Customs and

Immigration Area. The Respondents however did not divulge the details of

the said communication to the Petitioner however kept informing the

Petitioner that they would facilitate the process of obtaining the AEP from

BCAS.

23. It is submitted that the File Notings of the respondents, which

were placed on record during the Dispute Resolution Committee (DRC)

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proceedings, which preceded the arbitration, clearly reveals that the

Respondents were all along aware that there were restrictions placed on

issuance of AEP. The DRC in its report, in particular in the paragraph titled

"Observation" had clearly stated as follows:

"Committee has come across during the course
of the hearing and documents produced that the
previous contract for the Meet and Greet
Service was cancelled based on non-issuance of
AEP by BCAS. Commercial Directorate should
have reviewed the tender condition before
inviting fresh tender to avoid
disputes/litigation."

24. It is further submitted that the respondents were fully aware of

the issues with regard to the issuance of AEP and the earlier contract itself

came to be cancelled because of that. However, without consideration of the

same, and suppressing the restrictions placed on the AEP issuance and

without reviewing the terms of the Tender, the Respondents had floated the

subsequent tender.

25. It is further submitted that in the case of Esso Petroleum Co.

Ltd. v. Mardon, [1976] ECWA Civ 4, the Court of Appeal in England,

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considered whether the promises of a petroleum company that a particular

station would sell 400,000 gallons a year despite a material change in the

position of the petrol station that would affect the prospect was held to be a

misrepresentation. The Court therein held that a statement as to potential

throughput was a contractual warranty for it was a factual statement on a

crucial matter made by a party who had, or professed to have special

knowledge. The statement was made with the intention to induce another to

enter into a contract, and thus such contract was formed. The party making

such a statement would be in breach of the warranty and liable in damages

for the breach.

26. It is submitted that the contract from its very inception was

impossible to perform as BCAS was not convinced to provide AEP to the

personnel of the contractors who are engaged in Meet and Greet Services in

the SHA. It is submitted that the Respondent was well aware that AEP

would not be issued by BCAS but still proceeded to float a tender with

conditions that the Meet and Greet Services must be provided in the SHA

also.

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27. It is also submitted that assuming without admitting for a

moment, if the service to be provided by the petitioner is restricted outside

the SHA, then passengers would not be interested in availing the services

offered by the petitioner as the same is of no use to them. It is also factually

the case of the petitioner that factually the services were rendered outside

the SHA and therefore did not garner any patronage from the passengers as

they felt it was not helpful at all, apart from the fact that the passengers were

not willing to pay for such partial services. Therefore, as per
Section 56
of

the Indian Contract Act, the contract was impossible and incapable of being

performed and therefore was void.

28. It is further submitted that it is thus clear as day that the contract

entered between the petitioner and the respondents was void and did not

bind the petitioner same cannot be the basis of any legal/contractual

obligations. The respondent having entered into the contract with the

knowledge that the petitioner would not be able to perform its obligations

under the contract is precluded from enforcing the terms of the contract,

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however, the respondent would still be liable to make good for the loss

suffered by the petitioner.

29. It is submitted that the respondent, in all fairness, ought not have

invited the tender in the present case as they were fully aware that the no

successful tenderer would be able to render services to the Passengers in the

SHA.

30. It is submitted that the respondent is also guilty of

misrepresenting to the petitioner while entering into the contract. The

respondent having knowledge that the AEP which is a sine qua non for

entering the SHA of the Airport and for which permit is not being issued by

BCAS, had concealed the same from the Petitioner. As submitted earlier,

Ministry of Civil Aviation exercises administrative control over BCAS, the

1 Respondent and the Director General of Civil Aviation.

31. It is further submitted that since the first respondent as well as

BCAS are both administratively controlled by the Ministry of Civil

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Aviation, it is obvious that the first respondent was fully aware about the

regulations/guidelines with regard to issuance of AEP by BCAS. Despite

having full knowledge that BCAS was not issuing AEPs citing security

concerns and admittedly, the earlier contract entered by the Respondent was

cancelled on the same issue, the respondents have failed to intimate the

Petitioner regarding the same.

32. It is therefore submitted that apparent that the Respondent was

guilty of misrepresenting that they would facilitate the issuance of AEPs,

while knowing that BCAS has denied permission to provide Meet and Greet

Services in the SHA. It is submitted that these actions of the respondents

clearly amounts to suppression.

33. It is therefore submitted that the Sole Arbitrator has failed to

consider this legal issue in the Award and has mechanically proceeded to

pass the Award in favour of the respondent, his former employer.

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34. It is submitted that the Respondent being a Government

enterprise, falls within the definition of 'State' under
Article 12
of the

Constitution of India. Therefore, the respondent is expected to meet a higher

standard of transparency than a private party when engaging in business

transactions. The respondents having public element cannot act arbitrarily

or suppress material facts even in contractual matters as it is violative of

Article 14
of the Constitution of India. It is submitted that the Hon'ble

Supreme Court has held in
Kumari Shrilekha Vidyarthi and Others vs.

State of UP and others
, (1991) 1 SCC 212, that State action cannot be

arbitrary and in violation of
Article 14
of the Constitution of India.

35. That apart, learned Senior Counsel for the petitioner also drew

attention to the decision of the Hon’ble Supreme Court in
Kumari

Shrilekha Vidyarthi and Others vs. State of U.P. and Others
, (1991) 1

SCC 212, wherein, it was held that in contractual matters, any such act of

the State or a public body adversely affect the public interest. It is

submitted that every holder of a public office is a trustee whose highest duty

is to the people of the country and, therefore, every act of the holder of a

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public office, irrespective of the label classifying that act, is in discharge of

public duty meant ultimately for public good. A specific reference was

made to Paragraph 27 of the aforesaid decision.

36. It is therefore submitted that the actions of the respondent in

floating and awarding the tender after being informed of the fact that the

BCAS would not issue AEP for the petitioner is condemnable. Had this been

set forth in the tender document, then the petitioner would not have even

ventured to submit its bid. This renders the action of the respondent being a

State Enterprise violative of
Article 14
of the Constitution of India.

37. Therefore, it is submitted that the Contract entered between the

petitioner and the respondent has become void as the same was impossible

of performance by the petitioner and the respondent who had entered into

the contract knowing fully-well that the petitioner would not be in a position

to perform the same is definitely not entitled to any relief. However, the

Sole Arbitrator has failed to consider this aspect as well.

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38. It is further stated that the entire procedure from the

eligibility/qualification of the Arbitrator, to the power to appoint him and

the procedure of appointment are also bad in law, vitiating the entire

proceeding that took place thereafter, culminating in the Award. Such

Awards have been declared to be void and unenforceable and this is a case

where impartiality and inequality between the parties are clearly seen at

every stage.

39. A reference is made to the decision of Calcutta High Court in

Cholamandalam Investment & Finance Company Ltd. v. Amrapali

Enterprises & Anr.
, 2023 SCC OnLine Cal 605. De hors this contention,

even on the merit of the matter, the Award is in conflict with the basic

notions of morality and justice as the contract is frustrated and is fraught

with misrepresentation and hence, is in conflict with the public policy of

India and deserves to be interfered with.

40. It is submitted that there should be an express agreement in

writing for such waiver.
In this case, it is submitted that the applicant was

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unaware of the law settled by the Hon’ble Supreme Court in
Perkins

Eastman Architects DPC and Another vs. HSCC (INDIA) Limited
,

(2020) 20 SCC 760 and therefore, even though the petitioner had consented

for appointment of the Arbitrator on 08.06.2022, the consent cannot be

construed to be a valid consent in terms of proviso to
Section 12(5)
of the

Arbitration and Conciliation Act, 1996.

41. A further reference was made by the learned Senior Counsel to

the decision of the learned Single Judge of this Court in
P.Cheran vs.

Gemini Industries and Imaging Limited
, 2323 SCC OnLine Mad 1887. A

specific reference was made to Paragraphs 21 & 23 of the aforesaid

decision.

42. The learned Senior Counsel for the petitioner would submit that

the impugned Award passed by the learned Arbitrator suffers from patent

illegality and therefore attracts the sting under
Section 34
(2-
A) of the

Arbitration and Conciliation Act, 1996
.

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43. The learned Senior Counsel for the petitioner would further

submit that the award is also liable to be interfered with and set aside in

terms of
Section 34(2)(b)(ii)
read with Explanation (i) (ii) & (iii).

44. It is submitted that the previous contractor namely Akbar Travels

withdrew the service as the access was limited upto the ticketing counter

and therefore, the Tender that was floated subsequently which induced the

petitioner of a false promise that the petitioner will be able to earn amounts

for Meet and Greet Service (Swagat Seva) at Chennai Airport after investing

a huge sum towards the License Fee, Security Deposit etc.

45.
In this connection, learned Senior Counsel for the petitioner has

drawn attention to the decision of the Hon’ble Supreme Court in
Motilal

Padampat Sugar Mills Co.Ltd., vs. State of Uttar Pradesh and Others
,

(1979) 2 SCC 409. It is submitted that there can be no waiver unless the

person who is said to have waived is fully informed as to his right and with

full knowledge of such right, he intentionally abandons it. A specific

reference was made to Paragraph 6 from
the said decision
.

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46. It is therefore prayed for setting aside the impugned Award dated

18.05.2023, passed by the Sole Arbitrator in respect of the disputes between

the petitioner and the first respondent under the License Agreement dated

27.07.2016.

47. The learned Senior Counsel for the petitioner also relied on the

following decisions:-

i.
TRF Limited Vs. Energo Engineering Project Limited
,
(2017) 8 SCC 377.

ii.
HRD Corporation Vs. Gail
, (2018) 12 SCC 471.
iii.Prime Store, rep. by its Partner and others Vs.
Sugam Vanijya Holdings Private Limited and others,
2023 SCC OnLine Mad 2898.

iv.
Steelman Telecom Limited Vs. Power Grid
Corporation of India Ltd.
, 2023 SCC OnLine Del 4849.

48. Defending the impugned Award, the learned Additional Solicitor

General for the respondents would submit that the Award is well reasoned

and does not call any interference in the hands of this Court under
Section
of the Arbitration and Conciliation Act, 1996.

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49. It is submitted that indeed there was a waiver in accordance with

Section 12(5)
of the Arbitration and Conciliation Act, 1996.

50. It is submitted that in accordance with the terms of the Arbitration

Clause, the respondents had sent the names of the following five persons to

the petitioner on 06.06.2022 to be nominated as Arbitrator:-

i.Sh.L.R.Garg, IAS (Retd.);

ii. Sh.Madhukar Gupta, Ex. Addl. Chief Secretary & Principal
Resident Commissioner
iii. Sh.N.Krishnamoorthi, DGW, (Retd.), CPWD;
iv. Sh.Rajesh Bhandari, Ex.Executive Director (F&A), AAI;
v. Sh.S.K.Gupta, Ex.Executive Director (Engg.), AAI.

51. It is submitted that the petitioner consented for appointment of

Sh.Rajesh Bhandari, Ex.Executive Director (F&A), AAI as the Arbitrator

vide E-Mail dated 08.06.2022. It is therefore submitted that the challenge to

the impugned Award on the ground that the learned Arbitrator suffered from

disqualification under
Section 12(5)
of the Arbitration and Conciliation Act,

1996 read with Schedules V and VII of the Arbitration and Conciliation Act,

1996 cannot be countenanced. It is submitted that it has to be construed that

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there was an ‘express agreement’ in view of Email dated 18.06.2022 of the

petitioner.

52. It is submitted that in
Bharat Broadband Network Limited vs.

United Telecoms Limited
, (2019) 5 SCC 755, the appointment of sole

Arbitrator was made by the CMD contrary to the decision of the Hon’ble

Supreme Court in the case of TRF Limited referred to supra rendered on

03.07.2017, where an application for terminating the mandate was filed

under
Sections 14
and
of the Arbitration and Conciliation Act, 1996.

53. It is submitted on behalf of the respondent that the petitioner

having participated in the appointment of the Arbitrator and thereafter in the

Arbitral Proceedings, the petitioner is now precluded from raising

objections in relation to the jurisdiction of the arbitrator at this juncture. It

is submitted that the petitioner argued that the award of the Arbitrator will

not be challenged on the ground that the award of the Arbitrator appointed

was an employee and that the appointment of the Arbitrator will not be

challenged or be open to question in any Court of Law, on this account.

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Dispute Resolution Clause as contained in the License Agreement reads as

under : -

"All disputes and differences arising out of or in
any way touching or concerning this Agreement
(except those the decision whereof is otherwise
herein before expressly provided for or to which
the Public Premises [Eviction of Unauthorised
Occupants] Act and the rules framed thereunder
which are now enforced or which may hereafter
come into force are applicable) shall, in the first
instance. Be referred to a Dispute Resolution
Committee (DRC) setup at the airports, for which
a written application should be obtained from the
party and the points clearly spelt out. Before
making a reference to Dispute Resolution
Committee (DRC) setup at the airports, for which
a written application should be obtained from the
party and the pointe clearly spelt out. Before
making a reference to dispute resolution to dispute
resolution committee, the licensee will have to first
deposit the disputed amount with AAl and the
consent shall have to be obtained from the licensee
for acceptance of the recommendations of the
dispute resolution committee. In case the dispute is
not resolved within 45 days of reference, then the
case shall be referred to the sole arbitration of a
person to be appointed by the Chairman/Member
of the Authority subject to the condition that the
licensee will have to deposit the disputed amount
with AAl as condition precedent before making
reference to the arbitration for adjudication of
dispute. The award of the Arbitrator so appointed

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as aforesaid is or has been an employee of the
Authority and the appointment of the Arbitrator
will not be challenged or be open to question in
any Court of Law, on this account.”

54. Therefore, as provided for hereinabove, the existing arbitration

clause as per the License Agreement provided for a unilateral appointment

by the representative of the first respondent herein. It is an admitted fact that

clauses of such nature are bad in law which the Supreme Court clarified

succinctly in Perkins Eastman Architects DPC referred to supra.

However, the actual appointment of the arbitrator, subsequent to the DRC

proceedings, were done in a manner that was a clear departure from the

arbitration clause mentioned above.

55. It is submitted that as evinced by the petitioner communication

dated 09.02.2022, a request was made by the petitioner themselves for

appointment of an arbitrator. In response thereto, the representative of the

first respondent responded, by providing a panel of arbitrators from which

the petitioner was provided with an option of choosing an arbitrator. It is

pertinent to note that the panel contained 5 names of which only two names

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were ex-employees of the first respondent. The other three names were

unconnected persons being retired officers of high ranking posts in other

public sector undertakings.

56. It was the petitioner who vide, communication dated 08.06.2022,

conveyed its consent for the appointment of one Mr. Rajesh Bhandari, Ex.

Executive Director (F&A), AAI.

57. Such panel appointments, where the panel is provided by one

party and the nominee is picked by the other Party, has been discussed

extensively and upheld in
Voestalpine Schienen GMBH v. Delhi Metro

Rail Corporation Limited
, (2017)4 SCC 645 wherein, it was held that

when a broad panel to choose from has been provided to one party, despite

the panel containing names of past employees of the said Party, would not

lead the presumption of impartiality and neutrality as envisaged under

Section 12
of the Act. This was because a counter-balancing of rights was

created where the panel was picked by one party, with the ultimate choice of

appointment being left to the other Party. This was further fortified by the

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judgment of the Apex Court in Central Organisation for Railway

Electrification referred to supra.

58. It is therefore submitted that having willingly and without demur,

acted in departure from the arbitration clause and having exercised its

choice in appointing an arbitrator from a panel that was provided to it, the

petitioner is precluded from now raising the same as a ground in the present

Petition. In the event that the petitioner had any concern in relation to the

said appointment of the Arbitrator, that it so willingly chose, it ought to

have exercised the rights provided to it under
Section 13(2)
of the Act.

59. It is further submitted that
Section 13(2)
states that in the absence

of the parties having agreed to a procedure for appointment of arbitrator, the

party that intends to challenge an arbitrator, shall, within 15 days after

becoming aware of the constitution of the Arbitral Tribunal or after

becoming aware of any circumstances as provided in
Section 12(3)
, send a

written statement of the reasons for such challenge to the Arbitral Tribunal.

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60. It is further submitted that as per
Section 13(4)
and
13(5)
, only

upon such challenge being unsuccessful before the Tribunal and an arbitral

award being passed by the arbitrator, the said Party can raise the said ground

in a challenge under
Section 34
of the Act.

61. It is submitted that admittedly, the petitioner never filed any

Application or made any Statement under
Section 13(2)
of the Act. On the

contrary, it was the petitioner that chose the Arbitrator from a panel of

arbitrators and willingly participated in the arbitral proceedings.

62. It is the contention of the petitioner that the respondent, being

aware of the fact that the BCAS was unlikely to provide the AEP to the

petitioner for the purposes of the provision of services, misrepresented the

same to the Petitioner and has thus committed fraud. Further, owing to the

non-grant of the AEP, the act envisaged by the contract is now impossible,

thereby rendering it void as per
Section 54
of the Contract Act.

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63. It is also submitted that as far as the contention of fraud is

concerned, the same was not the ground for filing the petition under
section
of the Arbitration and Conciliation Act, 1996 and hence cannot be

argued. Even proceeding on a demurrer that the ground could be admitted, it

is pertinent to note that
Section 17
of the Contract Act provides an inclusive

definition of the term "fraud". Similarly, as far as the contention of

misrepresentation is concerned,
Section 18
of the Contract Act provides an

inclusive definition of the term "misrepresentation".

64. It is further submitted that the law that becomes relevant in this

regard is
Section 2(i)
of the Contract Act that defines a “voidable contract”

to be one that is enforceable by law at the option of one party but not at the

option of the other. Further, pertinently,
Section 2(j)
of the Contract Act

states that "a contract which ceases to be enforceable by law becomes void

when it ceases to be enforceable". When read together, it would indicate that

when a party, at whose option a contract is said to be enforceable, does not

so do, then the contract would become void.

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65. It is submitted that the conduct of the petitioner is to be noticed. It

is the contention of the petitioner that the respondent herein misrepresented

facts to the Petitioner. If this is taken to be true, the said Agreement came to

be voidable at the option of the petitioner. In accordance with
Section 2
()),

the Agreement would only become void if the petitioner herein rescinded

the Agreement and made it unenforceable.
Section 27
of the Specific Relief

Act, 1963 is relevant. As per the said Section, a party may sue to have a

contract rescinded where the contract is voidable at its option.

66. However, much to the contrary, the petitioner herein sought to

continue the operations and provide services at revised and updated terms as

identified hereinabove instead of rescinding the contract. This is fortified by

the petitioner's action of continuing to perform the Agreement on revised

terms, of its own accord. This is evinced by the communication dated

17.07.2017 of the petitioner indicating that the Meet & Greet services have

resumed from 11.06.2017.

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67. It is further submitted that notwithstanding the above, the

exception to
Section 19
of the Contract Act would indicate that if the Party

at whose option a contract is voidable, could have discovered the trust with

ordinary diligence, then the said contract would no longer be voidable. In

this regard it is necessary to draw reference to the
Aircraft Act, 1934
.

Section 2(2)
defines an Aerodrome, which would necessarily mean the

space within which the Petitioner was to provide services.
Section 5
of the

Aircraft Act further stipulates that the Central Government may by

notification make rules for the manufacture, possession, use and operation

of aircrafts and for securing the safety of aircraft operations. In the exercise

of such power, the Aircraft (Security) Rules, 2011 were published and

notified as under:-

a. “The said rules have been superseded by the
Rules of 2023, however, for the purpose of the
present Petition, the Rules of 2011 remain
pertinent. Rule 2(1)(c) of the Rules define an
"Aerodrome Entry Permit" to mean a photo
identity card, smart card or temporary permit
issued by the Commissioner of Security (Civil
Aviation), Bureau of Civil Aviation Security,
Ministry of Civil Aviation or any person
authorised by the Central Government for entry

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into the aerodrome or part of an aerodrome.
b. Rule 2(g) defines "Commissioner" as the
Commissioner of Security (Civil Aviation),
Bureau of Civil Aviation Security, Ministry of
Civil Aviation who shall be appropriate authority
for the requirements of Annex 17.

c. Rule 2(u) of the Rules states that "security"
means a combination of measures, human and
material resources intended to be used to
safeguard civil aviation against acts of unlawful
interference;

d. Rule 2(x) of the Rules define "security restricted
area" means airside areas of an airport into
which access is controlled to ensure security of
civil aviation including passenger areas between
the screening check point and the aircraft, the
ramp, baggage mark-up area, cargo sheds, mail
center, airside catering and aircraft cleaning
premises;

e. Rules 18 and 19 of the Rules set out the
restrictions on the entry into the aerodrome and
security restricted area. The rules specify that
access will only be granted to those that have the
AEP and the same shall be issued only by the
Commissioner after due verification. The Central
Government may direct any other person to issue
such AEP. The access to the aerodrome with the
AEP or without shall be entirely at the will and
verification of the Commissioner and/or the
aerodrome operator and the same is not within
the control of any other authority including the
Respondents herein”.

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68. Therefore, at the time of participating in the tender, it is presumed

that the Petitioner herein would acquaint itself with the applicable laws and

rules to the services that it was meant to bind them. It is pertinent to state

that as per the clauses in the letter of award granted to the Petitioner and the

License Agreement dated 27.07.2016 was executed between the Parties. It

was solely the responsibility of the Petitioner to obtain necessary permits

and licenses that will be required to provide the services under the

Agreement.

69. It is therefore submitted that the petitioner, knowingly executed

the Agreement and accepted the obligations of obtaining all permits and

licenses upon itself alone, cannot presently state that it was the

Respondent's obligation to facilitate the same. Further, no act of

misrepresentation has taken place and even if it be admitted that there was a

misrepresentation, in argue do, the petitioner consciously refrained from

exercising the rights available to it to render the Agreement void and instead

chose to consciously and by express consent and communication in this

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regard, continued to perform the obligations under the Agreement. It is

therefore prayed for dismissal of this petition.

70. The learned counsel for the respondent has placed reliance on the

following decisions:-

i. Central Organisation for
Railway Electrification
Vs. ECI-SPIC-SMO-MCML (JV) A Joint
Venture Company
, (2020) 14 SCC 712.

ii.
Government of Haryana PWD Haryana (B and
R) Branch Vs. G.F.Toll Road Private Limited
and others
, (2019) 3 SCC 505.

71. I have considered the arguments advanced by the learned counsel

for the petitioner and the respondent. I have perused the documents filed by

both parties.

72.
In
Bharat Broadband Network Limited Vs. United Telecoms

Limited
, (2019) 5 SCC 755, the Hon’ble Supreme Court referred to
Section

12(5)
of the Arbitration and Conciliation Act, 1996 and held as under:-

“20. This then brings us to the applicability of the
proviso to
Section 12(5)
on the facts of this case.
Unlike
Section 4
of the Act which deals with
deemed waiver of the right to object by conduct,

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the proviso to
Section 12(5)
will only apply if
subsequent to disputes having arisen between the
parties, the parties waive the applicability of sub-
section (5) of
Section 12
by an express agreement
in writing. For this reason, the argument based
on the analogy of
Section 7
of the Act must also
be rejected.
Section 7
deals with arbitration
agreements that must be in writing, and then
explains that such agreements may be contained
in documents which provide a record of such
agreements. On the other hand,
Section 12(5)

refers to an “express agreement in writing”. The
expression “express agreement in writing” refers
to an agreement made in words as opposed to an
agreement which is to be inferred by conduct.
Here,
Section 9
of the Contract Act, 1872
becomes important. It states:

“9. Promises, express and implied.—Insofar as
the proposal or acceptance of any promise
is made in words, the promise is said to be
express. Insofar as such proposal or
acceptance is made otherwise than in words,
the promise is said to be implied.”
It is thus necessary that there be an “express”
agreement in writing. This agreement must be
an agreement by which both parties, with full
knowledge of the fact that Shri Khan is
ineligible to be appointed as an arbitrator, still
go ahead and say that they have full faith and
confidence in him to continue as such. The facts
of the present case disclose no such express
agreement. The appointment letter which is
relied upon by the High Court as indicating an
express agreement on the facts of the case is
dated 17-1-2017. On this date, the Managing

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Director of the appellant was certainly not aware
that Shri Khan could not be appointed by him as

Section 12(5)
read with the Seventh Schedule
only went to the invalidity of the appointment of
the Managing Director himself as an arbitrator.
Shri Khan's invalid appointment only became
clear after the declaration of the law by the
Supreme Court in
TRF Ltd. [TRF Ltd. v. Energo
Engg. Projects Ltd.
, (2017) 8 SCC 377 : (2017) 4
SCC (Civ) 72] which, as we have seen
hereinabove, was only on 3-7-2017.

After this
date, far from there being an express agreement
between the parties as to the validity of Shri
Khan's appointment, the appellant filed an
application on 7-10-2017 before the sole
arbitrator, bringing the arbitrator's attention to
the judgment in
TRF Ltd. [TRF Ltd. v. Energo
Engg. Projects Ltd.
, (2017) 8 SCC 377 : (2017) 4
SCC (Civ) 72] and asking him to declare that he
has become de jure incapable of acting as an
arbitrator. Equally, the fact that a statement of
claim may have been filed before the arbitrator,
would not mean that there is an express
agreement in words which would make it clear
that both parties wish Shri Khan to continue as
arbitrator despite being ineligible to act as such.
This being the case, the impugned judgment is not
correct when it applies
Section 4
,
Section 7
,

Section 12(4)
,
Section 13(2)
and
Section 16(2)
of
the Act to the facts of the present case, and goes
on to state that the appellant cannot be allowed to
raise the issue of eligibility of an arbitrator,
having itself appointed the arbitrator. The
judgment under appeal is also incorrect in stating
that there is an express waiver in writing from the
fact that an appointment letter has been issued by

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the appellant, and a statement of claim has been
filed by the respondent before the arbitrator. The
moment the appellant came to know that Shri
Khan's appointment itself would be invalid, it
filed an application before the sole arbitrator for
termination of his mandate.

73. Paragraph Nos.21 & 23 in
P.Cheran Vs. Gemini Industries &

Imaging Limited
, rep. by its Official Liquidator, 2023 SSC OnLine Mad

1887, it was observed as under:-

“21. Keeping in mind the provisions of law and the
relevant case laws relied on by the parties and the
arguments advanced by the learned counsel for the
Parties, this Court is inclined to deal with the issue as
regards the validity of the unilateral appointment of
the learned Sole Arbitrator without providing express
agreement in writing by the petitioners in terms of
proviso of
Section 12(5)
of the Act.

23. The first principle of natural justice is ‘nemo
judex in causa sua’ which means ‘no man can be a
judge in his own cause’. This principle intends to
avoid any ‘reasonable apprehension of bias’ that may
arise during any judicial process.
Section 12
of the
Arbitration and Conciliation Act, 1996 lays down
provisions for the appointment of an Arbitrator and
conditions where the appointment may be valid or
invalid”

74.
In
Motilal Padampat Sugar Mill Co. Ltd., Vs. State of Uttar

Pradesh and others
, (1979) 2 SCC 409, the Court held as under:-

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“6. Secondly, it is difficult to see how, on the facts, the
plea of waiver could be said to have been made out
by the State Government. Waiver means abandonment
of a right and it may be either express or implied from
conduct, but its basic requirement is that it must be
“an intentional act with knowledge”. Per Lord
Chelmsford, L.C. in Earl of Darnley v. London,
Chatham and Dover Rly. Co. [(1867) LR 3 HL 43, 57
: 16 LT 217] There can be no waiver unless the
person who is said to have waived is fully informed as
to his right and with full knowledge of such right, he
intentionally abandons it. It is pointed out
in Halsbury's Laws of England (4th Edn.) Volume 16
in para 1472 at p. 994 that for a “waiver to be
effectual it is essential that the person granting it
should be fully informed as to his rights” and Isaacs,
J. delivering the judgment of the High Court of
Australia in Craine v. Colonial Mutual Fire
Insurance Co. Ltd. [(1920) 28 CLR 305 (Aus)] has
also emphasised that waiver “must be with
knowledge, an essential supported by many
authorities”. Now in the present case there is nothing
to show that at the date when the appellant addressed
the letter dated June 25, 1970, it had full knowledge
of its right to exemption under the assurance given by
Respondent 4 and that it intentionally abandoned
such right. It is difficult to speculate what was the
reason why the appellant addressed the letter dated
June 25, 1970 stating that it would avail of the
concessional rates of Sales Tax granted under the
letter dated January 20, 1970. It is possible that the
appellant might have thought that since no
notification exempting the appellant from Sales Tax
had been issued by the State Government under

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Section 4-A, the appellant was legally not entitled to
exemption and that is why the appellant might have
chosen to accept whatever concession was being
granted by the State Government. The claim of the
appellant to exemption could be sustained only on the
doctrine of promissory estoppel and this doctrine
could not be said to be so well defined in its scope
and ambit and so free from uncertainty in its
application that we should be compelled to hold that
the appellant must have had knowledge of its right to
exemption on the basis of promissory estoppel at the
time when it addressed the letter dated June 25, 1970.
In fact, in the petition as originally filed, the right to
claim total exemption from Sales Tax was not based
on the plea of promissory estoppel which was
introduced only by way of amendment. Moreover, it
must be remembered that there is no presumption that
every person knows the law. It is often said that
everyone is presumed to know the law, but that is not
a correct statement : there is no such maxim known to
the law. Over a hundred and thirty years ago, Maule,
J., pointed out in Martindale v. Falkner [(1846) 2 CB
706 : 135 ER 1124] :

“There is no presumption in this country that every
person knows the law : it would be contrary to
common sense and reason if it were so.”

Scrutton, L.J., also once said:

“It is impossible to know all the statutory law, and
not very possible to know all the common law.”
But it was Lord Atkin who, as in so many other
spheres, put the point in its proper context when he

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said in Evansv.Bartlam [(1937) AC 473, 479 : (1937)
2 All ER 646] :

“… the fact is that there is not and never has been a
presumption that everyone knows the law. There is
the rule that ignorance of the law does not excuse, a
maxim of very different scope and application.”
It is, therefore, not possible to presume, in the
absence of any material placed before the Court,
that the. appellant had full knowledge of its right to
exemption so as to warrant an inference that the
appellant waived such right by addressing the letter
dated June 25, 1970. We accordingly reject the plea
of waiver raised on behalf of the State Government.

75.
In
Kumari Shrilekha Vidyarthi and Others Vs. State of U.P.

and Others
, (1991) 1 SCC 212, the Hon’ble Supreme Court held as under:-

“27. Unlike a private party whose acts uninformed
by reason and influenced by personal predilections
in contractual matters may result in adverse
consequences to it alone without affecting the
public interest, any such act of the State or a public
body even in this field would adversely affect the
public interest. Every holder of a public office by
virtue of which he acts on behalf of the State or a
public body is ultimately accountable to the people
in whom the sovereignty vests. As such, all powers
so vested in him are meant to be exercised for
public good and promoting the public interest. This
is equally true of all actions even in the field of
contract. Thus, every holder of a public office is a
trustee whose highest duty is to the people of the

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country and, therefore, every act of the holder of a
public office, irrespective of the label classifying
that act, is in discharge of public duty meant
ultimately for public good. With the diversification
of State activity in a Welfare State requiring the
State to discharge its wide ranging functions even
through its several instrumentalities, which
requires entering into contracts also, it would be
unreal and not pragmatic, apart from being
unjustified to exclude contractual matters from the
sphere of State actions required to be non-arbitrary
and justified on the touchstone of
Article 14.
”

76. As noted above, the primary ground on which the petitioner has

attacked the impugned Award is that the impugned Award is nullity in view

of the proviso to
Section 12(5)
of the Arbitration and Conciliation Act, 1996

which has to be read in conjunction with
VII Schedule to the Arbitration and

Conciliation Act, 1996
.

77. The amendment to
Section 12
in the form of insertion of
Section

12(5)
of the Arbitration and Conciliation Act, 1996 was made by Act No.3

of 2016 with effect from 23.10.2015. The aforesaid amendment inserted

several new provisions to the Act including
VII Schedule to the Act
apart

from amendments to the other Schedules.

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78.
In the context of
Section 12(5)
of the Arbitration and Conciliation

Act, 1996 read with
VII Schedule to the Act
, the Hon’ble Supreme Court

had pronounced its Judgment on 03.07.2017 in
TRF Limited Vs. Energo

Engineering Project Limited
, (2017) 8 SCC 377. The said case dealt with

a case when the Agreement containing the Arbitration Clause was signed

prior to the above amendment. An appeal against the order of the High

Court appointing an Arbitrator who was disqualified from acting as an

Arbitrator in view of the amendment to the
Arbitration and Conciliation Act,
vide Act No.3 of 2016 with effect from 23.10.2015 was before the

Court was before the Court. There, the appellant invoked Clause 33 of the

General Terms and Conditions of the Purchase Order dated 28.12.2015

seeking to refer the dispute to an Arbitrator as per which any dispute or

difference between the parties in connection with the agreement shall be

referred to the sole arbitration of the Managing Director or his nominee. A

former Judge of the High was appointed as an Arbitrator by the Managing

Director of the respondent therein in terms of aforesaid Clause. After the

appointment was made, the appellant however filed an application under

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Sections 11(5)
and
11(6)
of the Act for appointment of an independent

Arbitrator under
Section 11(2)
of the Act in view of the Amendment to the

Act.

79. The said case was laid on the basis of restrictions in
Section 12(5)

of the Act read with V & VII Schedules to the Act. The V Schedule

contemplates the situation which gives rise to justifiable doubts as to the

independence or impartially of arbitrators. It has to be read in conjunction

with
Section 12(1)(a)
of the Act, as per which, when a person is approached

in connection with his possible appointment as an Arbitrator, such person

shall disclose in writing any circumstances, such as the existence either

direct or indirect, of any past or present relationship with or interest in any

of the parties or in relation to the subject-matter in dispute, whether

financial, business, professional or other kind, which is likely to give rise to

justifiable doubts as to his independence or impartiality.
Section 12(1)(a)
of

the Arbitration and Conciliation Act, 1996 reads as under:-

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12.Grounds for challenge.- (1)When a person is
approached in connection with his possible
appointment as an arbitrator, he shall disclose in
writing any circumstances,—

(a)such as the existence either direct or indirect,
of any past or present relationship with or
interest in any of the parties or in relation to the
subject-matter in dispute, whether financial,
business, professional or other kind, which is
likely to give rise to justifiable doubts as to his
independence or impartiality;

(b)….

…….

80. In
the above case
, the High Court proceeded to appoint a former

Judge as a Sole Arbitrator to decide the dispute between the parties.

Comparing the provisions as it stood prior to amendment and after the

amendment, the Hon’ble Supreme Court ultimately concluded that the

Managing Director of the respondent therein who is ineligible to act as an

Arbitrator was also ineligible to appoint an Arbitrator. The decision of the

High Court appointing a former Judge of the Hon’ble Supreme Court as sole

Arbitrator in terms of aforesaid Clause 33(d).

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81. The appellant had thus preferred an application under
Section

11(5)
read with
Section 11(6)
of the Act on the ground that was set aside

on the ground that once the identity of the Managing Director as the Sole

Arbitrator is lost, the power to nominate someone else as an Arbitrator is

obliterated. Facts
in
the above case
is captured in para 5 of its decision

which reads as under :-

“5. After the appointment was made, the appellant
preferred an application under
Section 11(5)
read
with
Section 11(6)
of the Act for appointment of an
arbitrator under
Section 11(2)
of the Act. The said
foundation was structured on the basis that under

Section 12(5)
of the Arbitration and Conciliation
(Amendment) Act, 2015 (3 of 2016) read with the
Fifth and the Seventh Schedules to the amended
Act, the Managing Director had become ineligible
to act as the arbitrator and as a natural corollary, he
had no power to nominate. The stand put forth by
the appellant was controverted by the respondent
before the High Court on the ground that the Fifth
and the Seventh Schedules lay down the guidelines
and the arbitrator is not covered under the same and
even if it is so, his power to nominate someone to
act as an arbitrator is not fettered or abrogated. The
High Court analysed the clauses in the agreement
and opined that the right of one party to a dispute to
appoint a sole arbitrator prior to the amended Act
had been well recognised and the amended Act does
not take away such a right. According to the learned

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Designated Judge, had the intent of the amended
Act been to take away a party's right to nominate a
sole arbitrator, the same would have been found in
the detailed list of ineligibility criteria enumerated
under the
Seventh Schedule to the Act
and,
therefore, the submission advanced by the
appellant, the petitioner before the High Court, was
without any substance. Additionally, the High Court
noted that the learned counsel for the petitioner
before it had clearly stated that it had faith in the
arbitrator but he was raising the issue as a legal one,
for a Managing Director once disqualified, he
cannot nominate. That apart, it took note of the fact
that the learned arbitrator by letter dated 28-1-2016
has furnished the requisite disclosures under the
Sixth Schedule and, therefore, there were no
circumstances which were likely to give rise to
justifiable doubts as to the independence and
impartiality. Finally, the Designated Judge directed
that besides the stipulation in the purchase order
governing the parties, the court was inclined to
appoint the former Judge as the sole arbitrator to
decide the disputes between the parties”.

As regards the issue about fresh appointment, the Hon’ble Supreme Court

remanded the matter to the High Court for fresh consideration. Para 55 of

the Judgment. Paragraphs 54 & 55 of the decision in the case of TRF

Limited referred to supra reads as under:-

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“54. In such a context, the fulcrum of the controversy
would be, can an ineligible arbitrator, like the
Managing Director, nominate an arbitrator, who
may be otherwise eligible and a respectable
person. As stated earlier, we are neither concerned
with the objectivity nor the individual
respectability. We are only concerned with the
authority or the power of the Managing Director.
By our analysis, we are obligated to arrive at the
conclusion that once the arbitrator has become
ineligible by operation of law, he cannot nominate
another as an arbitrator. The arbitrator becomes
ineligible as per prescription contained in
Section
12(5)
of the Act. It is inconceivable in law that
person who is statutorily ineligible can nominate a
person. Needless to say, once the infrastructure
collapses, the superstructure is bound to collapse.
One cannot have a building without the plinth. Or
to put it differently, once the identity of the
Managing Director as the sole arbitrator is lost,
the power to nominate someone else as an
arbitrator is obliterated. Therefore, the view
expressed by the High Court is not sustainable and
we say so.

55. Another facet needs to be addressed. The
Designated Judge in a cryptic manner has ruled
after noting that the petitioner therein had no
reservation for nomination of the nominated
arbitrator and further taking note of the fact that
there has been a disclosure, that he has exercised
the power under
Section 11(6)
of the Act. We are
impelled to think that that is not the right
procedure to be adopted and, therefore, we are
unable to agree with the High Court on that score
also and, accordingly, we set aside the order
appointing the arbitrator. However, as Clause (c)

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is independent of Clause (d), the arbitration clause
survives and hence, the Court can appoint an
arbitrator taking into consideration all the aspects.

Therefore, we remand the matter to the High Court
for fresh consideration of the prayer relating to
appointment of an arbitrator”.

82. The above decision was rendered on 03.07.2017 by a Larger

Bench of the Hon’ble Supreme Court. The Hon’ble Supreme Court,

thereafter, passed its Judgment in
Perkins Eastman Architects DPC and

another Vs. HSCC (India) Limited
, (2020) 20 SCC 760 on 26.11.2019.

In
Perkins Eastman Architects DPC and another Vs. HSCC (India)

Limited
, (2020) 20 SCC 760, referred to its earlier decision in
Bharat

Broadband Network Limited Vs. United Telecoms Limited
, (2019) 5

SCC 755 including decision in the case of TRF Limited referred to supra

and in
Voestalpine Schienen Gmph Vs. Delhi Metro Rail Corporation

Limited
, (2017) 4 SCC 665.

83. The view of the Hon’ble Supreme Court in the case of TRF

Limited referred to supra was re-iterated in paragraph 21 of Perkins

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Eastman Architects DPC and another Vs. HSCC (India) Limited
, (2020)

20 SCC 760. It reads as under:-

“21. But, in our view that has to be the logical deduction
from
TRF Ltd. [TRF Ltd. v. Energo Engg. Projects
Ltd.
, (2017) 8 SCC 377 : (2017) 4 SCC (Civ) 72]
Para 50 of the decision shows that this Court was
concerned with the issue, “whether the Managing
Director, after becoming ineligible by operation of
law, is he still eligible to nominate an arbitrator”
The ineligibility referred to therein, was as a result
of operation of law, in that a person having an
interest in the dispute or in the outcome or decision
thereof, must not only be ineligible to act as an
arbitrator but must also not be eligible to appoint
anyone else as an arbitrator and that such person
cannot and should not have any role in charting out
any course to the dispute resolution by having the
power to appoint an arbitrator. The next sentences
in the paragraph, further show that cases where
both the parties could nominate respective
arbitrators of their choice were found to be
completely a different situation. The reason is clear
that whatever advantage a party may derive by
nominating an arbitrator of its choice would get
counter-balanced by equal power with the other
party. But, in a case where only one party has a
right to appoint a sole arbitrator, its choice will
always have an element of exclusivity in
determining or charting the course for dispute
resolution. Naturally, the person who has an
interest in the outcome or decision of the dispute
must not have the power to appoint a sole

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arbitrator.

That has to be taken as the essence of
the amendments brought in by the
Arbitration and
Conciliation (Amendment) Act, 2015
(3 of 2016)
and recognised by the decision of this Court
in
TRF Ltd. [TRF Ltd. v. Energo Engg. Projects
Ltd.
, (2017) 8 SCC 377 : (2017) 4 SCC (Civ) 72]”.

84. Referring to paragraph 32 of the decision in the case of TRF

Limited referred to supra and the decision in the case of Voestalpine

Schienen Gmph referred to supra, a similar issue as was discussed in

paragraph 25, 26 & 27 in Perkins Eastman referred to supra. They read as

under:-

“25. In the light of the aforestated principles, the report of
the Law Commission and the decision in Voestalpine
Schienen GmbH [Voestalpine Schienen
GmbH v. DMRC, (2017) 4 SCC 665 : (2017) 2 SCC
(Civ) 607] , the imperatives of creating healthy
arbitration environment demand that the instant
application deserves acceptance.

26. The further question that arises is whether the power
can be exercised by this Court under
Section 11
of the
Act when the appointment of an arbitrator has already
been made by the respondent and whether the appellant
should be left to raise challenge at an appropriate stage
in terms of remedies available in law. Similar
controversy was gone into by a Designated Judge of
this Court in Walter Bau AG [Walter Bau AG v.

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Municipal Corpn. of Greater Mumbai, (2015) 3 SCC
800 : (2015) 2 SCC (Civ) 450] and the discussion on
the point was as under : (SCC pp. 805-06, paras 9-10)

“9. While it is correct that in
Antrix [Antrix
Corpn. Ltd. v. Devas Multimedia (P) Ltd.
,
(2014) 11 SCC 560 : (
2014) 4 SCC (Civ)
147] and Pricol Ltd. [Pricol Ltd. v. Johnson
Controls Enterprise Ltd.
, (2015) 4 SCC 177 :

(2015) 2 SCC (Civ) 530] , it was opined by
this Court that after appointment of an
arbitrator is made, the remedy of the
aggrieved party is not under
Section 11(6)

but such remedy lies elsewhere and under
different provisions of the
Arbitration Act

(
Sections 12
and
), the context in which the
aforesaid view was expressed cannot be lost
sight of. In Antrix [Antrix Corpn. Ltd. v.

Devas Multimedia (P) Ltd., (2014) 11 SCC
560 : (2014) 4 SCC (Civ) 147] , appointment
of the arbitrator, as per the ICC Rules, was as
per the alternative procedure agreed upon,
whereas in Pricol Ltd. [Pricol Ltd. v.

Johnson Controls Enterprise Ltd., (2015) 4
SCC 177 : (2015) 2 SCC (Civ) 530] , the
party which had filed the application under

Section 11(6)
of the Arbitration Act had
already submitted to the jurisdiction of the
arbitrator. In the present case, the situation is
otherwise.

10. Unless the appointment of the arbitrator is ex
facie valid and such appointment satisfies the
Court exercising jurisdiction under
Section
11(6)
of the Arbitration Act, acceptance of
such appointment as a fait accompli to debar

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the jurisdiction under
Section 11(6)
cannot be
countenanced in law. In the present case, the
agreed upon procedure between the parties
contemplated the appointment of the
arbitrator by the second party within 30 days
of receipt of a notice from the first party.

While the decision in Datar Switchgears Ltd.

[
Datar Switchgears Ltd. v. Tata Finance
Ltd.
, (2000) 8 SCC 151] may have introduced
some flexibility in the time-frame agreed
upon by the parties by extending it till a point
of time anterior to the filing of the
application under
Section 11(6)
of the
Arbitration Act, it cannot be lost sight of that
in the present case the appointment of Shri
Justice A.D. Mane is clearly contrary to the
provisions of the Rules governing the
appointment of arbitrators by ICADR, which
the parties had agreed to abide by in the
matter of such appointment. The option given
to the respondent Corporation to go beyond
the panel submitted by ICADR and to appoint
any person of its choice was clearly not in the
contemplation of the parties. If that be so,
obviously, the appointment of Shri Justice
A.D. Mane is non est in law. Such an
appointment, therefore, will not inhibit the
exercise of jurisdiction by this Court under

Section 11(6)
of the Arbitration Act. It cannot,
therefore, be held that the present proceeding
is not maintainable in law. The appointment
of Shri Justice A.D. Mane made beyond 30
days of the receipt of notice by the petitioner,
though may appear to be in conformity with
the law
laid down in
Datar Switchgears Ltd.

[
Datar Switchgears Ltd. v. Tata Finance

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Ltd., (2000) 8 SCC 151] , is clearly contrary
to the agreed procedure which required the
appointment made by the respondent
Corporation to be from the panel submitted
by ICADR. The said appointment, therefore, is
clearly invalid in law.”

27.It may be noted here that the aforesaid view of the
Designated Judge in
Walter Bau AG [Walter Bau AG
v. Municipal Corpn. of Greater Mumbai
, (2015) 3
SCC 800 : (2015) 2 SCC (Civ) 450] was pressed into
service on behalf of the appellant in
TRF Ltd. [TRF
Ltd. v. Energo Engg. Projects Ltd.
, (2017) 8 SCC 377
: (2017) 4 SCC (Civ) 72] and the opinion expressed
by the Designated Judge was found to be in
consonance with the binding authorities of this Court.

It was observed : (
TRF
case [
TRF Ltd. v. Energo
Engg. Projects Ltd.
, (2017) 8 SCC 377 : (2017) 4 SCC
(Civ) 72] , SCC p. 397, paras 32-33)
“32.Mr Sundaram, learned Senior Counsel for
the appellant has also drawn inspiration
from the judgment passed by the Designated
Judge of this Court in
Walter Bau AG
[Walter Bau AG v. Municipal Corpn. of
Greater Mumbai
, (2015) 3 SCC 800 : (2015)
2 SCC (Civ) 450] , where the learned Judge,
after referring to
Antrix Corpn. Ltd. [Antrix
Corpn. Ltd. v. Devas Multimedia (P) Ltd.
,
(2014) 11 SCC 560 : (2014) 4 SCC (Civ)
147] , distinguished the same and also
distinguished the authority in
Pricol Ltd. v.
Johnson Controls Enterprise Ltd. [Pricol
Ltd.
v. Johnson Controls Enterprise Ltd.,
(2015) 4 SCC 177 : (2015) 2 SCC (Civ) 530]
and came to hold that : (Walter Bau AG

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case [
Walter Bau AG v. Municipal Corpn
.

of Greater Mumbai, (2015) 3 SCC 800 :

(2015) 2 SCC (Civ) 450] , SCC p. 806, para

10)

‘10. Unless the appointment of the
arbitrator is ex facie valid and
such appointment satisfies the
Court exercising jurisdiction
under
Section 11(6)
of the
Arbitration Act, acceptance of
such appointment as a fait
accompli to debar the jurisdiction
under
Section 11(6)
cannot be
countenanced in law.…’

33.We may immediately state that the opinion
expressed in the aforesaid case is in
consonance with the binding authorities
we have referred to hereinbefore.”

85. In the light of the decision of the Hon’ble Supreme Court in the

case of TRF Limited referred to supra, the appointment made in the case of

Perkins Eastman referred to supra was set aside and the Hon’ble Supreme

Court has appointed Dr.Justice A.K.Sikri, a former Judge of the Hon’ble

Supreme Court as an Arbitrator to decide the dispute arising out the

Agreement dated 22.05.2017.

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86. In Bharat Broadband Network Limited which was discussed

above, the decision of the Hon’ble Supreme Court in the case of TRF

Limited referred to supra was adverted to. The Hon’ble Supreme Court in

the case of Bharat Broadband Network Limited referred to supra has

held that the appointment of one Mr.Khan was ab initio and neither

estoppels nor waiver operated against the appellant from challenging same

in absence of an agreement in writing under the proviso to
Section 12(5)
of

the Act.

87. The Hon’ble Supreme Court compared the facts of the case in

TRF Limited referred to supra and the fact of the case in Bharat

Broadband Network Limited referred to supra, and observed as under:-

“18.… It will be noticed that the facts in the present case
are somewhat similar. The APO itself is of the year
2014, whereas the appointment by the Managing
Director is after the Amendment Act, 2015, just as
in TRF Ltd. [TRF Ltd.v. Energo Engg. Projects
Ltd., (2017) 8 SCC 377 : (2017) 4 SCC (Civ) 72]
Considering that the appointment in
TRF
Ltd.[TRF Ltd. v. Energo Engg. Projects Ltd.
,
(2017) 8 SCC 377 : (2017) 4 SCC (Civ) 72] of a
retired Judge of this Court was set aside as being

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non est in law, the appointment of Shri Khan in the
present case must follow suit.”

88. In Bharat Broadband Network Limited referred to supra, the

dispute arose between the parties and therefore, the respondent invoked the

Arbitration Clause in the General (Commercial) Conditions of Contract

[GCC] and called upon the Managing Director of the appellant to appoint an

independent impartial Arbitrator to adjudicate the dispute arising out of the

Advance Purchase Order dated 30.09.2014 read with Clause III. 20.1

contained in the General (Commercial) Conditions of Contract [GCC].

89. In Bharat Broadband Network Limited referred to supra, after

the appointment was made on 17.01.2017, the appellant chanced to notice

the decision of the Hon’ble Supreme Court in the case of TRF Limited

referred to supra , rendered on 03.07.2017 and thus, requested the Arbitrator

to not to proceed as he was de jure incapable of performing his function as

an Arbitrator and to withdraw, from the proceedings and therefore to allow

the appellant to approach the High court for appointment of a new

Arbitrator in his place.

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90. One Mr.Khan, the learned Arbitrator however by his cryptic order

dated 21.10.2017 rejected the request of the appellant which led to filing of

the application under
Section 14
&
of the Arbitration and Conciliation

Act, 1996 stating that the learned Arbitrator had become de jure incapable

of acting as an Arbitrator and therefore, new Arbitrator be appointed in his

place.

91. The High Court by its Judgment dated 22.11.2017 reported in

2017 SCC OnLine Del 11905 rejected the application stating that very

person who appointed the learned Arbitrator was estopped from raising the

plea that such an Arbitrator cannot be appointed after participating in the

proceedings. It was further stated that the respondent had also filed a claim

statement before the learned Arbitrator without any reservation and

therefore, it would amount to a waiver of the applicability of
Section 12(5)

of the Act.

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92. The Hon’ble Supreme Court in paragraph 15 of the decision in the

case of Bharat Broadband Network Limited referred to supra, after

considering the decision of its earlier decision rendered in the case of TRF

Limited referred to supra held that the proviso to
Section 12(5)
of the Act

contemplates “express agreement in writing” and observed that “The only

way in which this ineligibility can be removed, again, in law, is that parties

may after disputes have arisen between them, waive the applicability of this

sub-section by an “express agreement in writing”. It further observed that

“Obviously, the “express agreement in writing” has reference to a person

who is interdicted by the Seventh Schedule, but who is stated by parties

(after the disputes have arisen between them) to be a person in whom they

have faith notwithstanding the fact that such person is interdicted by the

Seventh Schedule.”

93. The decision of the Hon’ble Supreme Court in the case of Bharat

Broadband Network Limited referred to supra has to be construed

carefully in the context of sequence of events as the appointment was made

on 17.01.2017 (after the amendment to
Section 12
of the Act with effect

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from 23.10.2015 by Act No.3 of 2016) and prior to the decision of the

Hon’ble Supreme Court in the case of TRF Limited referred to supra which

was rendered on 03.07.2017.

94. Whereas, in the facts of the present case, the request for

appointment was made by the petitioner after the dispute arose between the

parties and in response, the respondent has consented the names of

Arbitrators to appoint the learned Arbitrator from the names given by the

respondent on 01.06.2022. By a reply mail, the petitioner consented for

appointment of Mr.Rajesh Bhandari, Ex.Executive Director (F&A), AAI as

the Arbitrator. Thus, there is “express agreement in writing” by the

petitioner waiving the appointment of said Mr.Rajesh Bhandari as the

Arbitrator. That apart under the agreement dated 27.06.2016 which is after

the amendment to Act with effect from 23.10.2015, the parties agreed as

follows:-

“The award of the Arbitrator so appointed as
aforesaid is or has been an employee of the
Authority and the appointment of the Arbitrator
will not be challenged or be open to question in
any Court of Law, on this account.”

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95. That apart, the Arbitration Clause 30 of License Agreement dated

27.07.2016 in the present makes it clear that in case the dispute is not

resolved within 45 days of reference, then the case shall be referred to the

sole Arbitration of a person to be appointed by the Chairman/Member of the

Authority subject to the condition that the petitioner will have to deposit the

disputed amount with the respondent as condition precedent before making

reference to the Arbitration for adjudication of the dispute. Arbitration

Clause 30 of License Agreement dated 27.07.2016 further states that the

award of the arbitrator so appointed as aforesaid is or has been an employee

of the Authority and the appointment of the Arbitrator will not be

challenged or be open to question in any Court of Law, on this account. The

above Licence Agreement is dated 27.07.2016. Clause 30 of the License

Agreement dated 27.07.2016 reads as under:-

"30. All disputes and differences arising out of or in any
way touching or concerning this Agreement (except
those the decision whereof is otherwise herein
before expressly provided for or to which the Public
Premises [Eviction of unauthorized Occupants] Act
and the rules framed thereunder which are now

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enforced or which may hereafter come into force
are applicable), shall, in the first instance, be
referred to a Dispute Resolution Committee (DRC)
setup at the airports, for which a written
application should be obtained from the party and
the points clearly spelt out. Before making a
reference to dispute resolution to dispute resolution
committee, the licensee will have to first deposit the
disputed amount with AAI and the consent shall
have to be obtained from the licensee for
acceptance of the recommendations of the dispute
resolution committee in case the dispute is not
resolved within 45 days of reference, then the case
shall be referred to the sole arbitration of a person
to be appointed by the Chairman/Member of the
Authority subject to the condition that the licensee
will have to deposit the disputed amount with AAI
as condition precedent before making reference to
the arbitration for adjudication of dispute. The
award of the arbitrator so appointed as aforesaid is
or has been an employee of the Authority and the
appointment of the Arbitrator will not be
challenged or be open to question in any Court of
Law, on this account.

Before making a reference to Dispute resolution
committee, the licensee will have to first disputed
amount with AAI and the consent shall be given by
the licensee for acceptance of the recommendations
of the Dispute Resolution Committee.

The case shall be referred to the sole arbitrator by
the Chairman / Member of the Authority subject to
the condition that the licensee shall have to deposit
the disputed amount with AAI as condition
precedent before making reference to the
Arbitration for adjudication of dispute.

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During the arbitral and dispute resolution
proceedings, the licensee(s) shall continue to pay
the full amount of license fee / dues regularly as per
the award / agreement and perform all covenants of
the agreements.

96. It would have been different if such an appointment and consent

was made prior to the decision of the Hon’ble Supreme Court in the case of

TRF Limited referred to supra which decision was followed by the

Hon’ble Supreme Court in Perkins Eastman referred to supra.
In any

event, it was imperative on the part of the petitioner or the respondent to

have filed application for terminating the mandate under
Sections 13
,
&
of the Act as was held in
Walter Bau AG v. Municipal Corpn. of

Greater Mumbai
, (2015) 3 SCC 800.

97. Therefore, having allowed the Arbitration Proceedings to proceed,

it is not open for the petitioner to state that the Arbitrator lacked jurisdiction

as his appointment was suggested on 06.06.2022. The appointment of the

learned Arbitrator was not hit by the restrictions in
Section 12(5)
of the

Arbitration and Conciliation Act, 1996. Having allowed the proceedings

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without any demur, it is not open for the petitioner to question the same.

The petitioner consented to the appointment of the learned Arbitrator by his

response dated 08.06.2022 makes it clear that there is “express agreement in

writing”.

98. Thus, in the fact of the case, it is clear that there was a clear

“express agreement in writing” as is contemplated in proviso to
Section

12(5)
of the Act in the License Agreement dated 27.07.2016 signed between

the petitioner and the respondent which is after the amendment to the Act

with effect from 23.10.2015 although prior to the decisions of the Hon’ble

Supreme Court in the cases of TRF Limited referred to supra, Perkins

Eastman referred to supra and in the case of Bharat Broadband Network

Limited referred to supra.

99. That apart, the decision in the case Central Organisation for

Railway Electrification Vs. ECI-SPIC-SMO-MCML (JV) A Joint

Venture Company
, (2020) 14 SCC 712 was rendered by the Larger Bench

of the Hon’ble Supreme Court presided over by three Judges of the Hon’ble

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Supreme Court on 17.12.2019 at about the same time when the decision was

rendered in the case of Perkins Eastman referred to supra on 26.11.2019.

100. The Hon’ble Supreme Court in Central Organisation for

Railway Electrification has also referred to the decision in the case of

Perkins Eastman referred to supra in paragraph 35 and discussed the issue

in the context of amendment brought to the General Conditions of Contract.

The Hon’ble Supreme Court has observed as under:-

36. As discussed earlier, after the
Arbitration and
Conciliation (Amendment) Act, 2015
, the Railway
Board vide Notification dated 16-11-2016 has
amended and notified Clause 64 of the General
Conditions of Contract. As per Clause 64(3)(a)(ii)
[where applicability of
Section 12(5)
of the Act has
been waived off], in a case not covered by Clause
64(3)(a)(i), the Arbitral Tribunal shall consist of a
panel of three gazetted railway officers not below
the rank of Junior Administrative Grade or two
railway gazetted officers not below the rank of
Junior Administrative Grade and a retired railway
officer retired not below the rank of Senior
Administrative Grade Officer, as the arbitrators.

For this purpose, the General Manager, Railways
will send a panel of at least four names of gazetted
railway officers of one or more departments of the
Railways within sixty days from the date when a
written and valid demand for arbitration is

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received by the General Manager. The contractor
will be asked to suggest to the General Manager at
least two names out of the panel for appointment
as contractor's nominees within thirty days from
the date of dispatch of the request from the
Railways. The General Manager shall appoint at
least one out of them as the contractor's nominee
and will also simultaneously appoint balance
number of arbitrators from the panel or from
outside the panel duly indicating the “Presiding
Officer” from amongst the three arbitrators so
appointed. The General Manager shall complete
the exercise of appointing the Arbitral Tribunal
within thirty days from the date of the receipt of the
names of contractor's nominees.

37. Clause 64(3)(b) of GCC deals with appointment of
arbitrator where applicability of
Section 12(5)
of
the Act has not been waived off. In terms of Clause
64(3)(b) of GCC, the Arbitral Tribunal shall
consist of a panel of three retired railway officers
retired not below the rank of Senior Administrative
Grade Officers as the arbitrators. For this
purpose, the Railways will send a panel of at least
four names of retired railway officers empanelled
to work as arbitrators indicating their retirement
date to the contractor within sixty 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 the
General Manger at least two names out of the
panel for appointment of contractor's nominees
within thirty days from the date of dispatch of the
request of the Railways. The General Manager
shall appoint at least one out of them as the
contractor's nominee and will simultaneously

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appoint the remaining arbitrators from the panel
or from outside the panel, duly indicating the
“presiding officer” from amongst the three
arbitrators. The exercise of appointing the Arbitral
Tribunal shall be completed within thirty days from
the receipt of names of contractor's nominees.
Thus, the right of the General Manager in
formation of the Arbitral Tribunal is
counterbalanced by the respondent's power to
choose any two from out of the four names and the
General Manager shall appoint at least one out of
them as the contractor's nominee.

38. In the present matter, after the respondent had sent
the letter dated 27-7-2018 calling upon the
appellant to constitute the Arbitral Tribunal, the
appellant sent the communication dated 24-9-2018
nominating the panel of serving officers of Junior
Administrative Grade to act as arbitrators and
asked the respondent to select any two from the list
and communicate to the office of the General
Manager. By the letter dated 26-9-2018, the
respondent conveyed their disagreement in waiving
the applicability of Section 12(5) of the
Amendment Act, 2015. In response to the
respondent's letter dated 26-9-2018, the appellant
has sent a panel of four retired railway officers to
act as arbitrators giving the details of those retired
officers and requesting the respondent to select any
two from the list and communicate to the office of
the General Manager. Since the respondent has
been given the power to select two names from out
of the four names of the panel, the power of the
appellant nominating its arbitrator gets
counterbalanced by the power of choice given to
the respondent. Thus, the power of the General

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Manager to nominate the arbitrator is
counterbalanced by the power of the respondent to
select any of the two nominees from out of the four
names suggested from the panel of the retired
officers. In view of the modified Clauses
64(3)(a)(ii) and 64(3)(b) of GCC, it cannot
therefore be said that the General Manager has
become ineligible to act as (sic nominate) the
arbitrator. We do not find any merit in the contrary
contention of the respondent. The decision in
TRF
Ltd. [TRF Ltd. v. Energo Engg. Projects Ltd.
,
(2017) 8 SCC 377 : (2017) 4 SCC (Civ) 72] is not
applicable to the present case.

39. There is an express provision in the modified
clauses of General Conditions of Contract, as per
Clauses 64(3)(a)(ii) and 64(3)(b), the Arbitral
Tribunal shall consist of a panel of three gazetted
railway officers [Clause 64(3)(a)(ii)] and three
retired railway officers retired not below the rank
of Senior Administrative Grade Officers [Clause
64(3)(b)]. When the agreement specifically
provides for appointment of the Arbitral Tribunal
consisting of three arbitrators from out of the
panel of serving or retired railway officers, the
appointment of the arbitrators should be in terms
of the agreement as agreed by the parties. That
being the conditions in the agreement between the
parties and the General Conditions of the
Contract, the High Court was not justified in
appointing an independent sole arbitrator ignoring
Clauses 64(3)(a)(ii) and 64(3)(b) of the General
Conditions of Contract and the impugned orders
cannot be sustained.

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40.
In the result, the impugned orders dated 3-1-2019
[ECI –
SPIC- SMO - MCML (JV) v. Central
Organisation
for Railway Electrification, 2019
SCC OnLine All 2404] and 29-3-2019 [
ECI-SPIC-
SMO-MCML (JV) v. Central Organisation
for
Railway Electrification, 2019 SCC OnLine All
5271] passed by the High Court of Judicature at
Allahabad in Arbitration Application No. 151 of
2018 are set aside and these appeals are allowed.
The appellant is directed to send a fresh panel of
four retired officers in terms of Clause 64(3)(b) of
the General Conditions of Contract within a
period of thirty days from today under intimation
to the respondent contractor. The respondent
contractor shall select two from the four suggested
names and communicate to the appellant within
thirty days from the date of receipt of the names of
the nominees. Upon receipt of the communication
from the respondent, the appellant shall constitute
the Arbitral Tribunal in terms of Clause 64(3)(b) of
the General Conditions of Contract within thirty
days from the date of the receipt of the
communication from the respondent. The parties to
bear their respective costs.

101. The decision in the case of
P.Cheran Vs. Gemini Industries &

Imaging Limited
, rep. by its Official Liquidator, 2023 SSC OnLine Mad

1887 pertains to the Award dated 29.04.2015. However, it has referred to

the decision rendered in the context of amendments to the provision of the

Arbitration and Conciliation Act, 1996
after amendment with effect from

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23.10.2015 in the light of the decisions of the Hon’ble Supreme Court in the

cases of TRF Limited referred to supra, Perkins Eastman referred to

supra and in the case of Bharat Broadband Network Limited referred to

supra.

102. This view has been followed by this Court in another case in

Prime Store, rep. by its Partner and others Vs. Sugam Vanijya Holdings

Private Limited and others, 2023 SCC OnLine Mad 2898, wherein, the

Award passed on 22.03.2021 was challenged although defect to the

jurisdiction can be challenged at any point of time as held by the Hon’ble

Supreme Court in the case of
Kiran Singh Vs. Chaman Paswan
, AIR 1954

SC 340 as under:-

“6. The answer to these contentions must depend on
what the position in law is when a court entertains
a suit or an appeal over which it has no
jurisdiction, and what the effect of
Section 11
of
the Suits Valuation Act is on that position. It is a

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fundamental principle well established that a
decree passed by a court without jurisdiction is a
nullity, and that its invalidity could be set up
whenever and wherever it is sought to be enforced
or relied upon, even at the stage of execution and
even in collateral proceedings. A defect of
jurisdiction, whether it is pecuniary or territorial,
or whether it is in respect of the subject-matter of
the action, strikes at the very authority of the
court to pass any decree, and such a defect cannot
be cured even by consent of parties. If the
question now under consideration fell to be
determined only on the application of general
principles governing the matter, there can be no
doubt that the District Court of Monghyr
was coram non judice, and that its judgment and
decree would be nullities. The question is what is
the effect of
Section 11
of the Suits Valuation Act
on this position.”

103. In the facts of the present case, there is a clear indication that

there was an ‘express waiver’ by the petitioner. Therefore, the challenge to

the impugned Award is not made out. There is no defect in jurisdiction

assumed by the Arbitrator as the petitioner consented for appointment of the

learned Arbitrator after the amendments to the provision of the
Arbitration

and Conciliation Act, 1996
after amendment with effect from 23.10.2015,

on 08.06.2022.

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104. In the light of the above discussion, the challenge to the

impugned Award on the ground that the Arbitrator was de jure incapable of

resolving dispute between the parties cannot be countenanced. In view of

the above, the challenge to the impugned Award is therefore unsustainable.

105. As far as the challenge to the decision on merits is concerned,

there is hardly any case made out by the petitioner as the scope for

interference under
Section 34
of the Arbitration and Conciliation Act, 1996

is very limited as per the decision of the Hon’ble Supreme Court in

Ssangyong Engineering and Construction Company Limited Vs.

National Highways Authority of India (NHAI
), (2019) 15 SCC 131.

106. Scope of interference under
section 34
of the Arbitration and

Conciliation Act, 1996 is very limited. This Court can neither sit as a court

of appeal or re-appreciate the evidence placed before the Arbitral Tribunal

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or substitute the finding of the Arbitral Tribunal with its own conclusion on

facts or evidence.
In this connection the decision of the Honourable

Supreme Court in
The Project Director, NHAI V. M. Hakim
, (2021) 9

SCC 1 is invited wherein it was held that the power to set aside an Arbitral

Award under
Section 34
of the Arbitration And Conciliation Act, 1996 does

not include the authority to modify the award. It further held that an award

can be 'set aside' only on limited grounds as specified in
Section 34
of the

Act and it is not an appellate provision. It further held that an application

under
Section 34
for setting aside an award does not entail any challenge on

merits to an award.

107. The Honourable Supreme Court in
Ssangyong Engineering and

Construction Co Ltd versus National Highway Authority of India
,

(2019) 15 SCC 131 has held that an award can be set aside on the ground of

patent illegality under
section 34
(2-
A) of the Arbitration And Conciliation

Act, 1996
only where the illegality in the award goes to the root of the

matter. It further held that erroneous application of law by an Arbitral

Tribunal or the re-appreciation of evidence by the court under
section 34

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(2-
A) of the Arbitration and Conciliation Act, 1996
is not available.

108. The Court held that the above ground is available only where the

view taken by the Arbitral Tribunal is an impossible view while construing

the contract between the parties or where the award of the tribunal lacks any

reasons. The
Court further held
that an award can be set aside only if an

arbitrator/arbitral tribunal decide(s) the question beyond the contract or

beyond the terms of reference or if the finding arrived by the Arbitral

Tribunal is based on no evidence or ignoring vital evidence or is based on

documents taken as evidence without notice to the parties.

109. The Honourable Supreme Court in
Patel Engineering Ltd V.

NEEPCO
, (2020) 7 SCC 167 held that patent illegality as a ground for

setting aside an award is available only if the decision of the arbitrator is

found to be perverse or so irrational that no reasonable person would have

arrived at the same or the construction of the contract is such that no fair or

reasonable person would take or that the view of the arbitrator is not even a

possible view.

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110. The Honourable Supreme Court in
McDermott International

Inc. v. Burn Standard Co. Ltd
, (2006) 11 SCC 181 held that while

interpreting the terms of a contract, the conduct of parties and

correspondences exchanged would also be relevant factors and it is well

within the arbitrator's jurisdiction to consider the same.

111. The Honourable Supreme Court in
Sutlej Construction Ltd. v.

UT of Chandigarh
(2018) 1 SCC 718, held that when the award is a

reasoned one and the view taken is plausible, re-appreciation of evidence is

not allowed while dealing with the challenge to an award under
Section 34

of the Arbitration And Conciliation Act, 1996 for setting aside an award. It

further held that the proceedings challenging the award cannot be treated as

a first appellate court against a decree passed by a trial court.

112. The Honourable Supreme Court in
Sheladia Associates Inc. V.

TN Road Sector Project II, Represented
by its Project Director, 2019

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SCC OnLine Mad 17883 reminded itself of the Hodgkinson principle which

has been explained by the Honourable Supreme Court in the oft-quoted and

celebrated Associate Builders Case being
Associate Builders V. Delhi

Development Authority
, (2015) 3 SCC 49. It held that Hodgkinson

principle in simple terms means that the Arbitral Tribunal is the best judge

with regard to quality and quantity of evidence before it. It further held that

if there is no infraction of
Section 28(3)
of the Arbitration And Conciliation

Act, 1996 the question of challenge on the grounds of public policy does not

arise.

113. Therefore, this Arbitration Original Petition is liable to be

dismissed and is accordingly dismissed. Consequently, connected

application is closed. No costs.

29.04.2024
Index : Yes/No
Internet : Yes/No
Neutral Citation : Yes/No
Rgm/jen/kkd

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C.SARAVANAN, J.

Rgm/jen/kkd

Pre-delivery Order in
Arb.O.P.(Com.Div.)No.312 of 2023

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