Calcutta High Court
New Eureka Travels Club vs South Bengal State Transport ... on 17 May, 2022
ODC-22
ORDER SHEET
AP/244/2022
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
(Commercial Division)
NEW EUREKA TRAVELS CLUB
VS
SOUTH BENGAL STATE TRANSPORT CORPORATION
BEFORE:
The Hon'ble JUSTICE SHEKHAR B. SARAF
Date : 17th May, 2022
Appearance:
Mr. Rohit Das, Adv.
Mr. Indradip Das, Adv.
Mr. Kishwar Rahman, Adv.
Mr. Preetam Majumdar, Adv.
Mr. Pranit Biswas, Adv.
Mr. Ayan Banerjee, Adv.
Ms. Debasree Dhamali, Adv.
Ms. Riya Ghosh, Adv.
The Court: This is a Section 11 application wherein the arbitration clause
reads as under:-
"15) All disputes, difference, or question which may at any time
arising out between the parties hereto claiming under them or
interpretation of the clauses in respect of this agreement or breach of any
terms thereof or of compensation payable thereof or differenc arises
between the parties which cannot be mutually resolved shall in any
manner whatsoever in connection with it or the subject matter thereof
shall be referred to the Managing Director of SBSTC for his decision. If
any party is dissatisfied with the decision of the Managing Director, such
aggrieved party may request the Chairman of SBSTC to appoint a sole
2
arbitrator. Appointment of arbitrator may be done by the Chairman of
SBSTC under the provisions of the Arbitration & Conciliation Act, 1996
for the time being in force shall be applicable to such reference.
16) During execution of this job, if any dispute arises thereby, the
necessary legal matters and/or court case shall be exclusively within the
jurisdiction of the Courts of Calcutta."
In the Section 21 notice issued by the petitioner, the petitioner had
submitted that the arbitrator is required to be decided by the Court as the
Supreme Court has held that an interested party cannot nominate an
arbitrator. Subsequent to the Section 21 notice, the respondent had given a
choice of three learned Advocates of this Hon'ble High Court to be chosen by
the petitioner for appointment as sole arbitrator. The petitioner not being
agreeable to the same has filed a Section 11 application for appointment of an
independent arbitrator to be decided by this Court.
Upon examination of the judgments in TRF Limited v. Energo
Engineering Projects Ltd. reported in (2017) 8 SCC 377, Perkins Eastman
Architects v. HSCC (India) Limited reported in (2019) 9 SCC Online SC 1517
and in Central Organisation for Railways Electrification v. ECI-SPIC-SMO-
MCML (JV) A Joint Venture Company cited by the parties, it is clear that
neither an interested party can be appointed as an arbitrator nor can the said
interested party appoint an arbitrator to decide the disputes between the
parties. The judgments in TRF Limited (Supra) and Perkins Eastman
Architects (Supra) have settled the law on this point.
After considering the decision of the Supreme Court in TRF Limited
(Supra), the Supreme Court in Perkins Eastman Architects (Supra) held as
follows:-
"20. ...If, in the first category of cases, the Managing Director was
found incompetent, it was because of the interest that he would be said
to be having in the outcome or result of the dispute. The element of
invalidity would thus be directly relatable to and arise from the interest
that he would be having in such outcome or decision. If that be the test,
similar invalidity would always arise and spring even in the second
category of cases. If the interest that he has in the outcome of the
dispute, is taken to be the basis for the possibility of bias, it will always
be present irrespective of whether the matter stands under the first or
second category of cases. We are conscious that if such deduction is
drawn from the decision of this Court in TRF Limited, all cases having
clauses similar to that with which we are presently concerned, a party to
the agreement would be disentitled to make any appointment of an
Arbitrator on its own and it would always be available to argue that a
party or an official or an authority having interest in the dispute would
be disentitled to make appointment of an Arbitrator."
The judgment of the Supreme Court in Central Organisation for
Railways Electrification (Supra) is distinguishable to the present facts and
circumstances. It is to be noted that the Supreme Court in the above judgment
had held that the conditions in the agreement between the parties had required
appointment of a panel of three arbitrators and the High Court had erred in
appointing an independent sole arbitrator ignoring the agreement between the
parties and, accordingly, the Supreme Court had quashed such appointment.
The present situation is different as a sole arbitrator is required to be
appointed as per the parties and under such circumstances the law is very
clear that it is the Court that is to decide the sole arbitrator. The persons that
have been nominated by the respondent cannot be accepted and this Court
without going into the merits of the persons so nominated, should appoint an
independent sole arbitrator.
Accordingly, Mr. Pradip Kumar Ghosh, Senior Advocate (Mob.
No.9007711691) is appointed as Arbitrator.
The appointment is subject to submission of declaration by the
Arbitrator in terms of Section 12(1) in the form prescribed in the Sixth
Schedule of the Act before the Registrar, Original Side of this Court within four
weeks from today.
Let this order be conveyed to the Arbitrator by the Registrar, Original
Side forthwith.
AP/244/2022 is accordingly disposed of.
(SHEKHAR B. SARAF, J.)
R.Bhar
