Mr. Jagdish Prasad Aggarwal vs Cimmco Birla Ltd.
2001 Latest Caselaw 1399 Del

ORDER

J.D. Kapoor. J.

1. This is a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 seeking a limited relief in terms of clauses 90.1 of the Contract whereby parties agreed that all questions of disputes shall be referred to sole arbitrator appointed by the President of respondent-Cimmco Birla Ltd whereas arbitrator has been appointed by Executive Director & Chief Operation Officer.

2. The letter dated 21.9.2000 shows that Mr.H.S.Basur, Executive Director & Chief Operation Officer informed the petitioner about the appointment of the Arbitrator in the following terms:-

"As desired vide last para of your letter dated 4th September, 2000, we hereby appoint Sole Arbitrator as under:-

Shri R.G. Gaggar

Advocate and Solicitor W-6, Greater Kailash-II,

New Delhi-110048."

3. The petitioner lodged protest vide letter dated 14.10.2000 pointing out that as per clause 90. of the agreement appointing authority of the Sole Arbitrator is only the President., CIMMCO and no other person and therefore appointment of sole arbitrator by the Executive Director & Chief Operation Officer is contrary to the provisions of the agreement. The petitioner also submitted that to avoid further controversy the sole Arbitrator is required to be appointed by the President CIMMCO is required to be appointed by the President CIMMCO and none else. However, this protest of the petitioner went unheeded.

4. Once the parties enter into an agreement spelling out covenants in specific and categorical terms, it is not open to any of the parties to deviate from those terms even in to matter of appointment of arbitrator as reposition of faith in the integrity,impartiality and fairness either of the Arbitrator or the authority vested with power to appoint the arbitrator is the core of such an agreement. Any amount of infraction of such a term of the agreement. Any amount of infraction of such a tem of the agreement vitiates the appointment of arbitrator. As the Arbitrator cannot transverse beyond the terms of the agreement whenever reference of disputes is made to him so is the position as to the appointment of arbitrator in case there is specific stipulation that a particular person shall have the authority to appoint an Arbitrator.

5. As is apparent from clause 90.1 of the agreement, the authority to appoint an Arbitrator was conferred upon the president of the respondent-company and none else and therefore information sent by the respondent Vide letter dated 21.9.2000 under the signature of Mr.H.S.Basur, Executive Director & Chief Operation Officer gives the impression that the Arbitrator was appointed by Mr.Basur and not by President of the respondent company. The expression 'We' mentioned in the communication does not mean that the Arbitrator was appointed by the President. It rather connotes that the respondent-company has appointed the arbitrator.

6. Though at first instance, the word 'We' gave an impression that appointment might have been made by the President but this impression was soon dispelled by the letter dated 14.10.2000 sent by the petitioner to the respondent whereby he lodged a protest to the legality of the appointment of the arbitrator in as much as that the same has not been appointed by the President of the Company as per clause 90.1 of the agreement.

7. In view of the foregoing reasons. I find that the appointment of the Arbitrator was contrary to the terms agreed between the parties and therefore needs to be rectified. Petition is allowed. President of the respondent company is directed to appoint Sole Arbitrator for entering into reference within one month.