Calcutta High Court
Itd Itd Cem Joint Venture vs Kolkata Metro Rail Corporation Ltd on 11 November, 2025
Author: Shampa Sarkar
Bench: Shampa Sarkar
OCD 4
ORDER SHEET
AP-COM/762/2025
IN THE HIGH COURT AT CALCUTTA
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL DIVISION
ITD ITD CEM JOINT VENTURE
VS
KOLKATA METRO RAIL CORPORATION LTD
BEFORE:
The Hon'ble JUSTICE SHAMPA SARKAR
Date: 11th November, 2025.
Appearance:
Mr. Anal Kumar Ghosh, Adv.
Ms. Neelina Chatterjee, Adv.
Ms. Nilanjana Adhya, Adv.
...for the petitioner
Mr. Jishnu Chowdhury, Sr. Adv.
Mr. Aritra Basu, Adv.
Mr. Aniket Dey, Adv.
Mr. Atri Mandal, Adv.
...for the respondent
The Court:
1. This is an application for appointment of a learned Arbitrator under
Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter
referred to as the said Act). The petitioner submits that the procedure
prescribed in the General Conditions of Contract has failed, inasmuch
as, Clause 17.9(a) provides that a tribunal comprising of three
arbitrators shall settle the dispute where the total claim is above Rs.5
million and such arbitral tribunal would have to be constituted from a
panel to be supplied by the respondent.
2. According to the petitioner, the law laid down by the Hon'ble Apex
Court in the matter of Central Organisation for Railway
Electrification vs. ECI SPIC SMO MCML (JV) A joint Venture
Company reported in (2025) 4 SCC 641 prohibits unilateral
appointment and also appointment of arbitrators from a panel curated
by an interested party. According to the Hon'ble Apex Court, unilateral
appointment is contrary to Section 18 of the said Act. Equal
participation in an arbitral proceeding envisages equal say in the matter
of appointment of an arbitrator. The Apex Court was of the view that
the arbitration clause which mandated that a party seeking reference of
dispute to arbitration was bound to select its arbitrators from a curated
panel of the other party was prohibited in law. Such appointment would
be unequal treatment of the parties and prejudicial to the interest of
one. Under such circumstances, the contention of the petitioner is
accepted to be correct and the petitioner has rightly approached this
Court under Section 11(6) of the said Act for constitution of the arbitral
panel.
3. Mr. Chowdhury, learned senior advocate appearing for the respondent
submits that the petitioner had requested reference of the dispute to a
panel to be selected by the respondent and as such, the petitioner was
bound by such request. Accordingly, before the earlier bench, a
suggestion was made by Mr. Chowdhury that a panel of ten arbitrators
would be provided to the petitioner and the petitioner would have a
larger choice. It appears that the Acting Chief Justice had recorded that
the panel would consist of people from different fields and retired
Judges as potential arbitrators. From the panel that has been
submitted before the Court, the Court finds that apart from one learned
retired Judge, of the Allahabad High Court who is stationed outside
Kolkata, all other members of the suggested panel are ex-employees of
the railways. Thus, such a panel is unworkable.
4. This Court does not agree with Mr. Chowdhury's submission that once
the petitioner had requested for constitution of the arbitral tribunal, the
petitioner had given up the right to approach this Court for such
appointment. This is not the correct approach. The applicability of the
provision of Section 12(5) of the said Act can only be waived by the
written agreement executed between the parties.
5. Under such circumstances, the petitioner has raised an objection on
the ground that, relegating the matter to a tribunal comprising of
railway officers would defeat the very purpose of Section 12(5) of the
Arbitration and Conciliation Act, 1996 read with Schedules V and VII.
This Court is not required to decide whether the panel submitted by Mr.
Chowdhury is an independent panel or not. The question is whether an
arbitral tribunal should be constituted from a curated panel prepared
by one of the interested parties. This is not permissible in law. The ratio
of the decision of the Hon'ble Apex Court in Central Organization for
Railway Electrification (supra) is quoted below:-
"J. Conclusion
170. In view of the above discussion, we conclude
that:
170.1. The principle of equal treatment of parties
applies at all stages of arbitration proceedings,
including the stage of appointment of arbitrators;
170.2. The Arbitration Act does not prohibit PSUs
from empanelling potential arbitrators. However, an
arbitration clause cannot mandate the other party to
select its arbitrator from the panel curated by PSUs;
170.3. A clause that allows one party to unilaterally
appoint a sole arbitrator gives rise to justifiable
doubts as to the independence and impartiality of
the arbitrator. Further, such a unilateral clause is
exclusive and hinders equal participation of the other
party in the appointment process of arbitrators;
170.4. In the appointment of a three-member panel,
mandating the other party to select its arbitrator from
a curated panel of potential arbitrators is against the
principle of equal treatment of parties. In this
situation, there is no effective counterbalance
because parties do not participate equally in the
process of appointing arbitrators. The process of
appointing arbitrators in CORE is unequal and
prejudiced in favour of the Railways;
170.5. Unilateral appointment clauses in public-
private contracts are violative of Article 14 of the
Constitution;
170.6. The principle of express waiver contained
under the proviso to Section 12(5) also applies to
situations where the parties seek to waive the
allegation of bias against an arbitrator appointed
unilaterally by one of the parties. After the disputes
have arisen, the parties can determine whether there
is a necessity to waive the nemo judex rule; and
170.7. The law laid down in the present reference
will apply prospectively to arbitrator appointments to
be made after the date of this judgment. This
direction applies to three-member tribunals.
171. The reference is answered in the above terms.
172. Pending application(s), if any, shall stand
disposed of."
6. The prescribed procedure has failed. This Court allows the application.
The respondent has nominated Mr. Akhil Agarwal, Ex-Director General
(Signal & Telecom), Railway Board as its nominee. The petitioner is to
supply the nominee within i.e. 13.11.2025. Accordingly, the third
presiding arbitrator shall be decided by the court on 13.11.2025. List
the matter on 13.11.2025.
(SHAMPA SARKAR, J.)
B.Pal
