Delhi High Court
Narsihdas Morarji, Boat Builder vs Union Of India (Uoi) And Ors. on 15 March, 2004
Equivalent citations: 2004 (3) ARBLR 356 Delhi
Author: C Mahajan
Bench: C Mahajan
JUDGMENT
C.K. Mahajan, J.
1. By way of the present petition the petitioner seeks appointment of an Arbitrator.
2. The petitioner was awarded a contract by the Director General Supplies & Disposals for supplying the customs department with four single-screw timber hulls Customs Patrol Dhows (CPD). There were two different contracts for the said four boats (i) A/T No. 153 given for yard Nos. 35 and 36, and (ii) A/T No. 151 given for yard Nos. 33 and 34. Yard Nos. 33, 34 and 35 were delivered to the consignee. On 28th March, 2000 DGS&D cancelled the order for yard No. 36 citing delay in delivery. On 29th March, 2000 the respondents invoked the Bank guarantees furnished by the petitioner totaling to Rs. 32,75,524 and the same was encashed on 17th July, 2000. The petitioner wrote to the respondent that the delay occurred on account of the respondents and for the reasons beyond the control of the petitioner. As the Bank guarantee stood encashed the respondent released 10% balance payment to the petitioner under Contract AT No. 151. It is stated that the respondents have not paid the outstanding amounts and some amount was wrongly deducted by the respondents. Thus, disputes and differences arose between the parties. The petitioner vide notice dated 20th March, 2003 invoked the Arbitration clause and called upon the respondents to appoint the Arbitrator in terms of Clause 24 of the Conditions of Contract governing Contracts and sought reference of the claims to the Arbitrator. The respondents have failed to appoint the Arbitrator. Hence, the present petition.
3. The petition is opposed by counsel for the respondents. It is stated that the Dr. (Smt.) Geeta Rawat, Additional Legal Advisor to the Government of India in the Ministry of Law has been appointed as the Arbitrator on 23rd September, 2003. In the circumstances it is contended that the petition is liable to be dismissed.
4. I have heard counsel for the parties.
5. The Arbitration clause was invoked by the petitioner on 20th March, 2003. The respondents failed to appoint an Arbitrator within 30 days from the date of receipt of the notice. The petition was filed on 26th May, 2003. The respondents, failed to appoint the Arbitrator till filing of the present petition. Their right to appoint an Arbitrator ceased in terms of judgment of the Supreme Court reported as Datar Switchgears Ltd. v. Tata Finance Ltd. and Anr., JT 2000(Suppl. 2) SC 226=2000(3) Arb. LR 447 (SC). Thus the appointment made by the respondents on 23rd September, 2003 is not sustainable in law and is bad.
6. In view of the aforesaid position, the respondents have lost their right to appoint the Arbitrator.
7. In the circumstances, Mr. Justice Jaspal Singh (Retd.) is appointed as the Arbitrator to adjudicate the disputes between the parties. The claims enumerated in para 15 of the petition are referred to the Arbitrator for adjudication. The Arbitrator shall fix his own fees.
8. The petition stands disposed of.
9. A copy of the order be sent to the Arbitrator forthwith.
