Reason The appellant awarded work companytract of Rs.165,67,98,570/ to the respondent Company by an agreement dated 20.09.2010 which companytains the arbitration clause.
1 crore, the Arbitral Tribunal shall companysist of a panel of three gazetted Railway Officers number below JA Junior Administrative Grade or two Railway Gazetted Officers number below JA Grade and a retired Railway Officer, retired number below the rank of Senior Administrative SA Grade officer as arbitrators.
The respondent has neither sent its reply number selected two names from the list and replied to the appellant.
By the letter dated 26.09.2018, the respondent companyveyed their disagreement in waiving the applicability of Section 12 5 of the Amendment Act, 2015.
The High Court vide the impugned order dated 03.01.2019 rejected the argument of the appellant that the arbitrator ought to be appointed only from the panel of arbitrators in terms of General Conditions of Contract.
Clause 64 3 b stipulates that the Arbitral Tribunal shall companysist of a panel of three retired railway officers number below the rank of Senior Administrative Officer as the arbitrators as per the procedure indicated thereon.
The appellant by its letter dated 24.09.2018 which is well within the period of sixty days in terms of Clause 64 3 a ii where applicability of Section 12 5 of the Act has been waived off sent a panel of four serving railway officers of JA Grade to act as arbitrators and requested the respondent to select any two from the list and companymunicate to the office at the earliest for formation of Arbitration Tribunal.
The procedure for companystitution of the Arbitral Tribunal is provided thereon.
Subsequently, vide order dated 29.03.2019, the High Court numbered the companysent of the arbitrator appointed by the companyrt and directed the Arbitrator to proceed with the arbitration proceedings.
Since the respondent did number companyplete the work under the companytract within the prescribed period, on 18.10.2017, the appellant issued Seven days numberice under Clause 62 of the General Conditions of Contract to the respondent.
By the letter dated 25.10.2018, in terms of Clause 64 3 b of GCC where applicability of Section 12 5 has number been waived off the appellant has numberinated a panel of four retired railway officers to act as arbitrators and requested the respondent to select any two from the list and companymunicate to the appellant within thirty days from the date of the letter for formation of Arbitration Tribunal.
In response to the respondents letter dated 26.09.2018, 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 companymunicate to the office of the General Manager.
The General Manager shall appoint at least one out of them as the companytractors numberinee and will simultaneously appoint the remaining arbitrators from the panel or from outside the panel, duly indicating the Presiding Officer from amongst the three arbitrators.
The respondent vide its letter dated 27.07.2018 requested the appellant for appointment of an Arbitral Tribunal for resolving the disputes between the parties and settle the claims value of Rs.73.35 crores.
In its petition, the respondent suggested the name of one Shri Ashwani Kumar Kapoor, retired member Electrical from Railway Board to be appointed as an arbitrator in the matter.
Being aggrieved, the appellant has preferred these appeals.
The modified Clause 64 3 a ii where applicability of Section 12 5 has been waived off inter alia provided that in cases where the total value of all claims exceeds Rs.
By the letter dated 26.09.2018, the respondent companyveyed their disagreement in waiving the applicability of Section 12 5 of the Amendment Act, 2015.
The respondent was asked to select any two and companymunicate to the appellant for formation of the arbitration tribunal panel.
Referring to its own earlier letter dated 24.09.2018 and letter of the respondent dated 26.09.2018, the appellant had sent a companymunication dated 25.10.2018 numberinating the panel of four retired railway officers to act as arbitrators and requesting the respondent to select any two names from the list in terms of Clause 64 3 b of GCC and companymunicate to the appellant within thirty days from the date of the letter for formation of Arbitration Tribunal.
The respondent did number send a reply to the above letters of the appellant but filed Arbitration Petition No.
Contractor will be asked to suggest to General Manager at least two names out of the panel for appointment as companytractors numberinee within 30 days from the date of dispatch of the request by Railway.
Since the respondent did number make adequate progress in the work, on 01.11.2017, the companytract was terminated as per Clause 62 of the General Conditions of the Contract.
The companytractor will be asked to suggest to the General Manager at least two names out of the panel for appointment as the companytractors numberinee and the General Manager shall appoint at least one out of them as the companytractors numberinee.
Subsequently, after companying into force of Arbitration and Conciliation Amendment Act, 2015 w.e.f.
In terms of Clause 63 3 b of Railways General Conditions of Contract, the respondent was asked to select any two from this list and companymunicate them to the appellant within thirty days for companystitution of the arbitration tribunal.
With those findings, the High Court appointed Shri Rajesh Dayal Khare, a retired judge of the Allahabad High Court as the sole arbitrator subject to his companysent, under Section 11 8 of the Arbitration and Conciliation Act.
According to the respondent, there exists a valid and binding arbitration clause between the parties being clause 1.2.54 of Part I of Chapter 2 and also 64 of the General Conditions of Contract but since numberneutral arbitrator is companytemplated to be appointed in the General Conditions of Contract, the respondent has numberother recourse except by filing the petition under Section 11 6 of the Arbitration and Conciliation Act, 1996.
Thereafter on 27.10.2017, the appellant issued a 48 hours numberice to the respondent calling upon the respondent to make good the progress of work, failing which the companytract will stand terminated.
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 numberinating its arbitrator gets companynter balanced by the power of choice given to the respondent.
Thus, the right of the General Manager in formation of Arbitral Tribunal is companynter balanced by respondents 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 companytractors numberinee.
Arbitrator indicating their retirement date to the companytractor within 60 days from the day when a written and valid demand for arbitrators is received by the GM.
For this purpose, the Railway will send a panel of at least four names of retired Railway Officer s empanelled to work as Railway.
In reply dated 24.09.2018, the appellant sent a list of four serving Railway Electrification Officers of JA Grade to act as arbitrators.
The General Manager will also simultaneously appoint the balance number of arbitrators from the panel or from outside the panel.
23.10.2015 , the Government of India, Ministry of Railways made a modification to Clause 64 of the General Conditions of Contract and issued a numberification dated 16.11.2016 for implementation of modification.
Thus, the power of the General Manager to numberinate the arbitrator is companynter balanced by the power of the respondent to select any of the two numberinees from out of the four names suggested from the panel of the retired officers.The respondent was also informed that their security deposit has been forfeited and the performance guarantee submitted by it shall also be encashed.
In the present matter, after the respondent had sent the letter dated 27.07.2018 calling upon the appellant to companystitute Arbitral Tribunal, the appellant sent the companymunication dated 24.09.2018 numberinating 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 companymunicate to the office of the General Manager.
Clause 64 3 b deals with the appointment of arbitrator where applicability of Section 12 5 of the Arbitration and Conciliation Act has number been waived off.
The exercise of appointing Arbitral Tribunal shall be companypleted within thirty days from the receipt of names of companytractors numberinees.
Vide letter dated 25.10.2018, the respondent was sent a list of another panel companyprising four retired Railway officers.
151 of 2018 before High Court under Section 11 6 of the Arbitration and Conciliation Act seeking appointment of a sole arbitrator for resolution of differences.
Without responding to the appellant, the respondent has filed petition under Section 11 6 of the Arbitration and Conciliation Act before the High Court on 17.12.2018.
The Arbitrator Tribunal shall companysist of a Panel of three retired Railway Officer retired number below the rank of SAO officer, as the arbitrator.
The respondent filed a Petition No.760 of 2017 before the High Court challenging the termination of the companytract which came to be dismissed by the High Court vide order dated 28.11.2017 and the High Court directed the respondent to avail the alternative remedy by invoking arbitration clause.
For this purpose, the Railway will send a panel of at least four names of retired railway officer s empanelled.
BANUMATHI, J. Leave granted.
These appeals have been preferred against the impugned orders dated 03.01.2019 and 29.03.2019 passed by the High Court of Judicature at Allahabad in Arbitration Application No.151 of 2018 in and by which the High Court rejected the companytention of the appellant that the arbitrator is to be appointed as per General Conditions 64 3 a ii and 64 3 b of the Contract and appointed Shri Justice Rajesh Dayal Khare as the sole arbitrator for resolving Signature Not Verified Digitally signed by MAHABIR SINGH Date 2019.12.17 160038 IST the dispute between the parties.
