Dcm Financial Services Ltd. vs National Building Const. Corp. ...
2004 Latest Caselaw 1076 Del

JUDGMENT

Vikramajit Sen, J.

1. Learned counsel for the Petitioner states that the Vakalatanama shall be filed during the course of the day.

2. In this Petition it has been prayed that the arbitral proceedings before Shri A.K. Pruthi should be stayed on the grounds that the Respondent/NBCC has subsequently appointed a different person to arbitrate upon the Claims raised by them. My attention has been drawn to the decision of the Hon'ble Supreme Court in Bhatia International vs. Bulk Trading S.A. and Another, which pointedly states that a stay of arbitral proceedings is not contemplated under Section 9 of the Arbitration and Conciliation Act, 1996. Where a challenge has been made to the authority of the Arbitrator, that has to be ventilated before the Arbitrator himself who has to come to a decision under Section 13. Where he does not recuse himself, the remedy of the Applicant is to await the final Award and raise these objections at that stage.

3. In this Petition these questions do not arise for consideration for the reason that Shri A.K. Pruthi has superannuated/retired. The Arbitration Clause specifically contemplates that the C.M.D., N.B.C.C. will appoint the Arbitrator who will be an Engineer of NBCC not below the rank of Resident Engineer. On the strength of Himalayan Construction Co. vs. Executive Engineer, Irrigation Division, J & K and Another, , which affirmed and explained the earlier Judgment of the Court in Union of India and Others vs. Prabhat Kumar and Bros. and Another, 1995 supp. (4) SCC 525, Shri A.K. Pruthi can uncontrovertably no longer act as the Arbitrator.

4. It has been contended by Mr. Mehta, learned Senior Counsel for the Petitioner that since appointment of a successor has to be made, there is now no subsisting restriction in the Arbitration Clause on the powers of the C.M.D., NBCC to appoint only an Engineer not below the rank of a Resident Engineer. This submission is challenged by Mr. Seth, learned counsel for the Respondent who states that by virtue of Section 15(2) the subsequent appointment has also to be made in accordance with 'Rules' which govern the first appointment. Mr. Mehta's submission was directed towards his prayer that a retired Judge of this Court may be appointed as the Arbitrator.

5. It has been orally contended by Mr. Mehta that so far as the Petitioner's Claims are concerned a request was made for the appointment of an Arbitrator and the adjudication of the Petitioner's claims pursuant to which the C.M.D., N.B.C.C. had appointed Shri Y.C. Nangia as the Arbitrator. It is accepted on both sides of the Bar that there are no fetters on the C.M.D., N.B.C.C. to refer to those Claims to Shri Pruthi, but this had not been done. The oral grievance is that despite the appointment of Shri Nangia in May, 2001 that arbitration has not progressed at all. Mr. Seth states, to the contrary, that the Petitioner's efforts all throughout have been to delay the arbitral proceedings before Shri A.K. Pruthi which have been stayed by the Orders of this Court.

6. This Petition is disposed of with the issuance of direction to the C.M.D., N.B.C.C. to make a fresh appointment of an arbitrator in respect of the Claims of the N.B.C.C. as well as of D.C.M. Financial Services Limited. The Arbitrator will decide both Claims expeditiously. I do not find any reason to modify or supersede the plain terms of the Arbitration Clause or impinge upon the discretion of the C.M.D., N.B.C.C. by appointing a retired Judge of this Court or the Hon'ble Supreme Court. However, there are no distinct 'Rules' which govern the appointment of arbitrators in the present case and the Arbitrator need not be an Engineer. It is also a salutary practice to have all the disputes should be adjudicated in one forum, that is, before the same Arbitrator.

7. Mr. Mehta states that if a person other than the Engineer of the NBCC is appointed, such as a retired Judge, the D.C.M. Financial Services Limited shall bear seventy five per cent of the costs and expenses.

8. In these circumstances the C.M.D., NBCC is directed to refer the Claims of both parties to the same Arbitrator. Since there are allegations against the independence of Shri Nangia and unbiased functioning of Shri Nangia, the C.M.D. should appoint a third person to decide both sets of Claims. He, however, shall have the discretion to either appoint an Engineer of NBCC or any other person.

9. Interim Orders are recalled.

10. Petition stands disposed of in these terms.