Malu Housing Products vs Bharat Petroleum Corpn. Ltd.
2004 Latest Caselaw 759 Del

JUDGMENT

Mukul Mudgal, J.

1. This is an petition under Sections 11 & 16 of the Arbitration and Conciliation Act, 1996(hereinafter referred to as the `Act') for appointment of an independent arbitrator.

2. The parties to this petition entered into an Agreement 27th November, 2002 for `Providing and laying Paver Blocks Driveway at OSTS PALARI, Distt. PALI'. The petitioner is the Malu Housing Products and the respondent is the Bharat Petroleum Corporation Ltd.(in short the `BPCL'). Clause 76 of the Agreement between the parties providing for settlement of disputes by way of arbitration reads as follows:-

"Clause 19(a): Any disputes or difference of any nature whatsoever any claim, Gross claim, or set off the Corporation against the Contractor or regarding any right, liability, act, omission or account of any of the parties hereto arising out of or in relating to this agreement shall be referred to the Sole Arbitration of the Director (Marketing) of the Corporation who may be nominated by the Director (Marketing). The Contractor will not b entitled to raise any objection to any such arbitrator on the ground that the arbitrator is an Officer of the Corporation or that he ......as an Officer of the Corporation he had expressed views on all or any other matters in dispute or difference. In the event of arbitrator to whom the matter is originally referred being transferred of vacating his office for being unable to act for any reason, the Director (Marketing) as aforesaid at the time of such transfer, vacation of office or inability to act may in the discretion of the Director(Marketing) designate another person to act an arbitrator in accordance with the terms of the agreement to the end and intent that the original Arbitrator shall be entitled to continue the arbitration proceedings notwithstanding his transfer or vacation of office as on Officer of the Corporation if the Director (Marketing) does not designate another person to act as an arbitrator on such transfer, vacation of office or inability of original arbitrator. Such persons shall be entitled to proceed with the reference from the point at which it was left by his predecessor. It is also a terms of this contract that no person other than the Director (Marketing), or a person nominated by such Director (Marketing), of the Corporation as aforesaid shall act as arbitrator hereunder. The award of the arbitrator so appointed shall be final conclusive and binding on all parties to the agreement subject to the provisions of the Arbitration Act, 1940 or any statutory modification or re-enactment thereof and the rules made there under for the time being in force shall apply to the arbitration under this clause."

3. As per the arbitration clause extracted above, the invocation was to be done to Director (Marketing). The invocation of the arbitration clause has been done by a letter dated 30th April, 2003 which indicates that the letter was addressed to the Territory Manager (Retail), BPCL and not to the Director (Marketing). It is also stated by the learned counsel for the respondent that the arbitrator stood appointed on 10th August, 2004. Since the invocation was not sent to the designated person, the petitioner can not invoke Section 11 of the Act and in particular the judgment of the Supreme Court in Datar Switchgears Ltd. v. Tata Finance Ltd. and Anr. reported as JT 2000 (Suppl.2) SC 226. Accordingly, the prayer made in this petition cannot, therefore, be granted in view of the fact that the arbitrator stood appointed on 10th August, 2004 before the invocation as per the arbitration clause. The parties are therefore to appear before the appointed Arbitrator on 15th September, 2004 at 4 PM on which day the statement of claim will be filed by the claimant. Subject to the filing of statement of claim by the petitioner/claimant on 15th September, 2004, the Arbitrator is directed to dispose of the reference not later than 4 months from 15th September, 2004.

4. This petition stands disposed of accordingly in the above terms.