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M/s Durga Welding Works v. Chief Engineer Railway Electrification

Arbitration and Conciliation Act, 1996 – Once an application under Section 11(6) of the Act has been filed for appointment of an Arbitrator before the High Court, the respondents forfeited their right to appoint an Arbitrator and the High Court alone holds jurisdiction to appoint an Arbitrator in exercise of power under Section 11(6) of the Act.

Indisputedly, the appointment of an Arbitrator was made by the respondents after arbitration petition was filed by the appellant under Section 11(6) of the Act in the Registry of the High Court on 23rd October, 2009.

This Court cannot be oblivious of the peculiar facts and circumstances brought to our notice that after filing of an arbitration petition on 23rd October 2009 in the Registry of the High Court, the appellant completely slept over the matter and the respondents were never served of any notice of the Arbitration Petition (ARBP No. 61 of 2009) filed before the High Court of Orissa. At the given time, when the respondents called upon the appellant to suggest and select two names out of the panel of four for constitution of the Arbitral Tribunal, the appellant vide letter dated 28th August, 2010 selected two officers from the panel suggested by the respondents. Pursuant thereto, the Arbitral Tribunal was constituted by the respondents vide letter dated 24th September, 2010 and the appellant thereafter appeared before the Arbitral Tribunal on 25th October, 2010 and submitted his statement of claim and in furtherance, statement of defence was submitted by the respondents.

The fact still remains that except the letter being once sent by the appellant on 27th December, 2011 informing of the arbitration petition being filed under Section 11(6) of the Act before the High Court, no steps were taken thereafter to pursue his arbitration application and since the appellant had not participated before the Arbitral Tribunal after filing of the statement of claim, ex­parte award came to be passed by the Arbitral Tribunal on 21st June, 2013. It may be noticed that notices were issued for the first time by the High Court of the arbitration petition filed by the appellant in the year 2016 almost 3 years after passing of the ex­parte award dated 21st June, 2013.

In the given facts and circumstances, the High Court was not inclined to exercise its jurisdiction under Section 11(6) of the Act for appointment of an Arbitrator and dismissed the petition by an Order dated 26th July, 2019 with liberty to the appellant to submit objections against the ex­parte award dated 21st June, 2013 under Section 34 or 37 of the Act, if so advised.

In our considered view, so far as the question of law is concerned, certainly being settled that after the application has been filed for appointment of an Arbitrator under Section 11(6) of the Act, before the High Court the respondents forfeited their right to appoint an Arbitrator under the clause of arbitration thereafter but from the narration of facts which has been noticed by us, we are of the view that no error was committed by the High Court in dismissing the petition filed under Section 11(6) of the Act for appointment of an Arbitrator by an Order dated 26th July, 2019.

Consequently, the appeal fails and accordingly dismissed.

Case Law Reference

  1. Punj Lloyd Ltd. v. Petronet MHB Ltd., (2006) 2 SCC 638
  2. Datar Switchgears Ltd. v. Tata Finance Ltd., (2000) 8 SCC 151

Case Number : Civil Appeal No (s). 54 of 2022 (Arising out of SLP (Civil) No(s). 28682 of 2019); January 04, 2022

Hon’ble Mr. Justice Ajay Rastogi pronounced the nonreportable judgment of the Bench comprising His Lordship and Hon’ble Mr. Justice Abhay S. Oka.

For Appellant(s) Mr. Gaurav Agrawal, AOR Mr. Abhikalp Pratap Singh, Adv. Ms. Bhavya Tyagi, Adv. Ms. Aadya Yadav, Adv. Mr. Himanshu Tripathi, Adv. For Respondent(s) Mr. Jayant K Sud, Ld ASG. Ms. Archana Pathak Dave, Adv. Ms. Priyanka Das, Adv. Ms. Shantanu Sharma, Adv. Mr. Rohit Pandey Adv. Mr. Amrish Kumar, AOR Mr. Raj Bahadur Yadav, AOR Mr. Randeep Sachdeva, Adv.

Case Link : https://pdf.caselaw.in/sc/2022/01/1165/

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