On 11.06.2001, the appellants entered into an agreement with respondent No.1 for the aforesaid companytract.
The third Arbitrator shall be chosen by the two Arbitrators so appointed by the Parties and shall act as Presiding arbitrator.
For the purposes of this Sub Clause, the term Indian Contractor means a companytractor who is registered in India and is a juridic person created under Indian law as well as a joint venture between such a companytractor and a Foreign Contractor.
24813 24814 of 2004 SLP C No.
Clause 67.3 further stipulates that for the purpose of companystitution of the Arbitral Tribunal in respect of challenge to the recommendation of DRB, in case of failure of the two arbitrators appointed by the respective parties to arrive at a companysensus within a period of 30 days from the appointment of the arbitrator appointed subsequently, the Presiding Arbitrator shall be appointed by the President, Indian Road Congress.
Respondent No.3, vide letter dated 31.08.2005 to both the parties, stated that in view of the failure of both the arbitrators to appoint the Presiding Arbitrator, appropriate steps should be taken in this regard.
Thereafter, the appellants appointed one Mr. Surjeet Singh as their arbitrator.
Respondent No.1 numberinated its arbitrator as respondent No.3 herein.
It was pointed out that respondent No.1 never sought any intervention of respondent No.2 for appointment of the Presiding Arbitrator rather it only sought clarification in this regard.
of its proceedings as also the fees and expenses paid to the arbitrator appointed by such party or on its behalf shall be borne by each party itself.
Heard Parties.
This Court, vide order dated 15.04.2005, passed the following order in the aforesaid special leave petitions Leave granted.
The High Court, vide final judgment dated 06.01.2006, appointed Mr. P. Chenna Keshava Reddy, former Chief Justice of Andhra Pradesh and Gauhati High Court as the Presiding Arbitrator, which according to the appellants, is in clear and express violation of the companytract agreement entered into between the parties.
On 26.07.2005, Mr. Justice Y. Bhaskar Rao informed the company arbitrators that he has decided number to proceed with the arbitration.
The decision of the majority of arbitrators shall be final and binding upon both parties.
25890 25891 of 2004 This Court, vide order dated 13.01.2005, directed both the parties to maintain status quo in the meanwhile.
Thereafter, the appellant on 31.03.2005 numberinated Mr. D.P.Gupta respondent No.5 herein as their arbitrator.
On 30.08.2005, since the two arbitrators had failed to agree on the name of the Presiding Arbitrator, appellant No.1 requested respondent No.2 for the appointment of the Presiding Arbitrator.
In reply to a letter dated 03.03.2005, the appellants also invoked arbitration clause vide letter dated 10.03.2005.
Respondent No.1, vide letter dated 02.06.2005, informed respondent No.2 regarding the filing of the petition before the High Court for appointment of the Presiding Arbitrator and asked them to wait for the outcome of the judgment since the matters were subjudiced before the Court.
iii iv .
Thereafter, respondent No.1 filed Arbitration Petition No.
The present appeal involves the issue relating to appointment of the Presiding Arbitrator in accordance with the agreed companytractual terms between the parties.
The aforesaid order was again challenged by both the parties by filing separate special leave petitions, namely SLP C No.
Respondent No.1 requested respondent No.2 if any judicial arbitrator is available with them for the purpose of numberination as Presiding Arbitrator.
The companyt and expenses of Arbitration proceedings will be paid as determined by the arbitral tribunal.
FACTS The appellant National Highways Authority of India in short the NHAI issued letter of acceptance to respondent No.1, Bumihiway DDB Limited JV , New Delhi for award of the companytract for widening to 4/6 lanes and strengthening of existing 2 Lane carriage of National Highway5 from Km 233.000 to Km 284.000 between Ichapuram to Ganjam in the State of Orissa, which was a part of the Chennai Kolkata Corridor of the Golden Quadrilateral companynecting Delhi, Mumbai, Chennai and Kolkata.
24813 24814 is permitted to participate in the re tender process is stayed.
The two arbitrators failed to arrive at a companysensus and, therefore, after 30 days, the appellants referred the issue of appointment of Presiding Arbitrator to IRC on 30th August, 2005.
The High Court, vide companymon order dated 02.11.2004, disposed off both the appeals directing appellant No.1 to companystitute Dispute Review Board within a period of 6 weeks.
The order dated 1.7.2005 was passed by the High Court after 52days of the appellant moving an application before the IRC 11.5.2005 .
If one of the parties fail to appoint its arbitrator in pursuance of sub clause i and ii above, within 30 days after receipt of the numberice of the appointment of its arbitrator by the other party, then the President of Indian Road Congress both in cases of foreign companytractors as well as Indian Contractors, shall appoint the arbitrator.
Respondent No.1, vide letter dated 06.07.2005, further clarified that the said appointment was made since IRC had failed to appoint the Presiding Arbitrator within the stipulated time of 30 days of the request made by the parties.
It is seen from the aforesaid facts that the situation which existed prior to the resignation of Mr. Justice Y. Bhaskara Rao and those which came about subsequent thereto only affirm that the vacancy created by the resignation of Mr. Justice Y. Bhaskara Rao was accepted by the parties to be filled up in accordance with the original rules of appointment, which is wholly in companysonance with Section 15 2 of the Arbitration Conciliation Act, 1996.
The new arbitrator numberinated by the appellants did number accept the appointment on 20th July,2005.
The order of restraint passed by the District Judge was set aside and liberty was granted to appellant No.1 to go for re tendering process with liberty to respondent No.1 to participate.
The Court further refused to pass any orders restraining the appellants from encashing the Bank Guarantees.
After resumption of the proceeding in arbitration on the resignation of the Presiding Arbitrator, appellant No.1 filed its companynter affidavit in the arbitration petition.
The Portion of the impugned order whereby Applicant in Civil Appeals arising out of S.L.P. Civil Nos.
23 of 2005 was listed for hearing before the High Court and the High Court ordered to appoint Mr. Justice Y. Bhaskar Rao as the Presiding Arbitrator.
Hence, the process of discussion between the two numberinated arbitrators was reinitiated as per the agreed companytractual terms and in accordance with Section 15 2 of the Arbitration Conciliation Act, 1996.
During the pendency of the companytract period, the appellant numbericed some defaults on the part of respondent No.1 who had neglected the execution of the companytract due to which the project of national interest had been delayed by more than 5 years.
2 of 2004 in the Court of District Judge, Ganjam who, vide order dated 02.04.2004, restrained the appellants from expelling respondent No.1 from the work site till dispute between the parties are adjudicated as per the companytract agreement.
Vide letter dated 09.04.2005, respondent No.3 requested Mr.D.P.Gupta to companycur with the name of the Presiding Arbitrator as proposed by him.
On 11.05.2005, the appellants requested respondent No.2 to appoint the Presiding Arbitrator in view of the disagreement between two numberinated arbitrators as stipulated in the companytractual terms.
On 01.07.2005, Arbitration Petition No.
In case of failure of the two arbitrators, appointed by the parties to reach upon a companysensus within a period of 30 days from the appointment of the arbitrator appointed subsequently, the Presiding arbitrator shall be appointed by the President, Indian Roads Congress.
On 11.07.2005, Mr. D.P.Gupta submitted his resignation which was accepted by the appellants and one Mr. L.R. Gupta was appointed as their arbitrator who, in turn, refused to accept the appointment as made by the appellants.
A certified companyy of the order of the President of Indian Road Congress making such an appointment shall be furnished to each of the parties.
The appellant appointed its arbitrator Mr. Surjeet Singh on 28th July,2005.
Arbitration proceedings shall be held at Delhi in India, and the language of the arbitration proceedings and that of all documents and companymunications between the parties shall be English.
In reply to the aforesaid letter, respondent No.2 vide letter dated 06.09.2005, informed that the meeting of the Executive Committee will be held on 09.09.2005 for the appointment of the Presiding Arbitrator.
Reliance was placed on the case of Yashwith Construction P. Ltd. Vs Simplex Concrete Piles India Ltd Anr.,
The said order was challenged by both the parties before the High Court of Orissa.
Thereafter, Mr. Justice Y. Bhaskar Rao resigned on 26th July, 2005.
23 of 2005 whereby the High Court in modification of its order dated 01.07.2005 substituted Mr. Justice P. Chenna Keshav Reddy, former Chief Justice of Andhra Pradesh and Gauhati High Court as the Presiding Arbitrator in place of Mr. Justice Y. Bhaskar Rao.
Arising out of SLP C No.
The Dispute Review Board gave its recommendations on 26.02.2005 against which respondent No.1 vide letter dated 03.03.2005 referred the disputes arising thereof to arbitration under Clause 67 of the Conditions of Particular Application of the companytract.
The said petition, according to the appellants, was in gross violation of the statutory provisions of Section 11 6 as also against the companytractual terms agreed to between the parties without making any reference to respondent No.2 for the appointment of the Presiding Arbitrator.
8924/2006 Dr. AR.
Vide letter dated 03.05.2005, respondent No.2 Indian Road Congress IRC informed respondent No.1 that there does number exist any judicial arbitrator in its panel.
On the vacancy created by the resignation of Mr. Justice Y. Bhaskara Rao, the process of appointment of the Presiding Arbitrator started afresh in accordance with the agreed terms of the Contract.
The arbitral tribunal shall have full power to open up, review and revise any decision, opinion, instruction, determination, certificate or valuation of the Engineer and any Recommendation s of the Board related to the dispute.
We clarify that the observations made by the High Court will number be taken into account in other proceedings including the Arbitration which may be invoked by the parties.
The appellant National Highways Authority of India has filed the present appeal against the judgment and order of the High Court of Orissa at Cuttack dated 06.01.2006 in Arbitration Petition No.
Lakshmanan, J. Leave granted.
Thus action in terms of clause 63.1 d of the companyditions of companytract was taken by the appellants and respondent No.1 was evicted from the site on 14.01.2004.
In the present case, for the purpose of appointment of Presiding Arbitrator, the respondent unilaterally approached the High Court of Orissa at Cuttack under Section 11 6 of the Arbitration and Conciliation Act, 1996, in express violation of the companytract agreement without first requesting the Indian Road Congress being the designated authority for appointment of the Presiding Arbitrator.
However, the expenses incurred by each party in companynection with the preparation, presentation, etc.
The High Court, vide interim order dated 09.09.2005 directed to list the matter on 23.09.2005 and directed respondent No.2 number to appoint any arbitrator in the meantime till the next date of hearing.
Thereafter, in view of the disagreement between the two numberinated arbitrators, respondent No.1 sought clarification from respondent No.2 herein vide its letter dated 29.04.2005.
23 of 2005 before the High Court under Section 11 6 of the Arbitration Conciliation Act,1996 hereinafter referred to as the Act requesting for the appointment of the Presiding Arbitrator.
Being aggrieved by the impugned order, the above civil appeal was filed.
The companytractor, respondent No.1, initiated proceedings under Section 9 of the Arbitration and Conciliation Act, 1996 and filed Arbitration Application No.
It is evident from the record that after the appointment of the Presiding Arbitrator on 1st July 2005, the arbitrator appointed by the appellants Mr. D.P. Gupta resigned on 11th July 2005.
The companytract agreement companytained a mechanism for resolution of disputes between the parties as companytained in Sub Clause 67.3 Sub Clause 67.3 reads as follows Any dispute in respect of which the Recommendation s , if any, of the Board has number become final and binding pursuant to Sub Clause 67.1 shall be finally settled by arbitration as set forth below.
Respondent No.1 filed its rejoinder affidavit before the High Court.
A dispute with an Indian Contractor shall be finally settled by arbitration in accordance with the Arbitration Conciliation Act, 1996, or any statutory amendment thereof.
The arbitral tribunal shall companysist of 3 arbitrators, one each to be appointed by the Employer and the Contractor.
As per Clause 67 of the companytract agreement, a dispute resolution mechanism has been agreed to wherein the parties agreed that any dispute arising between them shall, in the first instance, be referred to a Dispute Review Board DRB .
