Delhi High Court
Union Of India (Uoi) And Anr. vs J.R.C. Grid Engineers P. Ltd. on 26 July, 2002
Bench: B Khan, J Kapoor
JUDGMENT
Khan, (J)
1. Respondent filed AA No. 195/2001 for appointment
of an arbitrator. Designated Authority issued notice to
petitioner and then appointed retired Judge of this
court Hon'ble Mr. Justice R.P. Gupta as an arbitrator to
adjudicate the dispute between the parties by order
dated 12.2.2002. Petitioner sought review of this order
on the ground that agreement between the parties
provided for appointment of the serving officer with
Engineering degree qualification as an arbitrator. The
Authority rejected review petition placing reliance on
judgment of the Supreme Court in Konkan Railway
Corporation Ltd. and Anr. v. Rani Construction
Pvt. Ltd. and holding that petitioner
had already forfeited its right to appoint an
arbitrator. Hence this petition.
2. The only submission made by Union counsel
before us was that designated authority was required to
give due regard to qualification required of arbitrator
by agreement of parties in terms of Sub-section 8(a) of
the Act and since an agreement between the parties
provided for an appointment of serving officer with
Engineering Degree qualification, therefore appointment
of a retired Judge of High Court as arbitrator was not
in order.
The plea appears fallacious on the face of it.
Sub-section 8(a) of Section 11 provides as under:
"The Chief Justice or the person
or institution designated by him, in
appointing an arbitrator, shall have due
regard to--
(a) any qualification required of
the arbitrator by the agreement of the parties."
3. A perusal of this provision shows that Chief
Justice or the designated authority was only required
to give due regard to the qualifications required of
the arbitrator provided in the agreement of the parties
and to other considerations for appointment of an
independent and impartial arbitrator. The spirit
behind this was to ensure appointment of an independent
and impartial arbitrator by also taking into
consideration qualifications held by a person in terms
of the agreement and other relevant factors. Once this
premise was accepted mere agreement of parties to
appoint a specially qualified Arbitrator does not mean
that no other person even if he possessed inherent
element of impartiality or independence coupled with
long experience for adjudicating wide range of subjects
involving complex facts and questions of law could not
be appointed. Moreover, once the party forfeits the
right to appoint the arbitrator, it should be left to
the wisdom and discretion of the court to decide on the
suitability of the Arbitrator to ensure fairness of
award.
4. We are fortified by the following observations
of the Supreme Court in Konkan Railway Corporation Ltd.
and Anr. v. Rani Construction Pvt. Ltd. (2002) 2 SCC 404)
"Where an appointment procedure
has been agreed upon by the parties but a
party fails to act as required by that
procedure or the parties, or the two
arbitrators appointed by them, fail to
reach the agreement expected of them
under that procedure or a person or
institution fails to perform the function
entrusted to him or it under that
procedure, a party may request the Chief
Justice or his designate to nominate an
arbitrator, unless the appointment
procedure provides other means in this
behalf. The decision of the Chief
Justice or his designate is final. In
nominating an arbitrator the Chief
Justice or his designate must have regard
tot he qualifications required of the
arbitrator in the agreement between the
parties and to other considerations that
will secure the nomination of an
independent and impartial arbitrator.
5. It cannot be said in the present case that
designated authority had not given due regard to the
requirements of this provision or to the terms of the
agreement. Nor it can be held that the authority was
bound to appoint an arbitrator possessing specific
qualifications on such consideration. On both counts
petitioner's plea fails and so does the writ petition.
