M/S. A.B.G. Infralogistics Ltd. vs Indian Oil Corporation Ltd. & Anr.
2009 Latest Caselaw 3801 Del

     *IN THE HIGH COURT OF DELHI AT NEW DELHI

+                   OMP No.145/2009

%                   Date of decision: 16th September, 2009


M/S. A.B.G. INFRALOGISTICS LTD.                 ....Petitioner

                        Through:      Ms. Amrita Sanghi with Mr.
                                   Revendra Singh and Mr. Aditya
                                   Sharma, Advocates

                                Versus

INDIAN OIL CORPORATION LTD. & ANR.                  ... Respondents


                        Through: Ms. Mona Aneja with Mr. Munindra
                                 Dvivedi, Advocates


CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1.    Whether reporters of Local papers may
      be allowed to see the judgment?   No.

2.    To be referred to the reporter or not? No.

3.    Whether the judgment should be reported
      in the Digest? No.


RAJIV SAHAI ENDLAW, J.

1 The petition has been filed U/s.14 of the Arbitration Act, 1996

for termination of the mandate of the arbitrator for the reason of the

arbitrator having failed to act without undue delay. The matter has

chequered history. The disputes arose between the parties as far

back as in 1992-1993. The agreement between the parties provided

for arbitration by a sole arbitrator selected by the contractor i.e. the

petitioner from a panel of three persons nominated by the General

Manager of the respondent Corporation. (Clause 9.0.1.0 of Section 9

of the Contract). One Mr. J.K. verma, who was then serving as a

General Manager Mathura Refinery of the respondent Corporation

came to be appointed as the arbitrator. It is the contention of the

petitioner that upon the petitioner objecting to the procedure

adopted by the said arbitrator, the said arbitrator adjourned the

proceedings sine die.

2 Suit No.1831A/1995 under Section 20 of the Arbitration Act,

1940 came to be filed by the petitioner. The same was dismissed by

a Single Judge of this court. In an appeal preferred by the petitioner,

one Mr. H.K. Bakshi was appointed as the arbitrator. The parties

also agreed to applicability of the 1996 Act to the said arbitral

proceedings. It is the contention of the petitioner that the said Mr.

Bakshi entered upon reference on 11th February, 2003. The

grievance of the petitioner is of the said Mr. Bakshi not acting inspite

of six years having passed.

3 The counsel for the respondents has contended that the

petitioner itself had made an application before Mr. Bakshi that he

cannot continue as an arbitrator for the reason of his having ceased

to be an employee of the respondent Corporation. It is also informed

that the application of the respondent under Section 16 of the

Arbitration Act, 1996, is also pending before the arbitrator.

4 A perusal of the reply filed by the respondents to the petition

shows that according to the respondents also the arbitrator has not

acted after 24th November, 2006. It appears that on the filing of this

petition or just prior thereto a letter dated 25th February, 2009 was

issued by the arbitrator fixing the hearing on 25th March, 2009. The

petitioner having filed this petition the proceedings did not take

place thereafter also.

5 The respondent has along with the reply placed the copies of

the entire arbitral proceedings on record. The counsel for the

respondents has fairly stated that nothing happened in the

arbitration between November, 2006 and till March, 2009 as

aforesaid.

6 I am satisfied from the aforesaid that the arbitrator has failed

to act without undue delay. In fact the entire purpose of arbitration

has been scuttled by the disputes having remained pending for such

a long period of time.

7 A perusal of the arbitration agreement between the parties

does not disclose any agreement on qualification of the arbitrator.

Though under Section 15 (2) of the Act the procedure for

appointment of a substitute arbitrator is the same as the procedure

for appointment of the arbitrator being substituted and which in this

case would be of the General Manager of the respondent

Corporation nominating three names and the petitioner selecting one

out of the same but the said procedure having failed to serve any

purpose for the last over 15 years and in the light of the recent dicta

in U.O.I. Vs. Singh Builders Syndicate MANU/SC/0490/2009, this

court is of the opinion that the agreed procedure can be varied.

8 The counsel for the petitioner has contended that a Retired

Judge of this court be appointed as the arbitrator. Though the

counsel for the respondent has no instructions in this regard Justice

P.K. Bahari (Retd.) is appointed as the sole arbitrator to adjudicate

the disputes aforesaid. His fee shall in the first instance be paid by

the petitioner only subject to award as to costs. The counsel for the

petitioner states that the fee shall be fixed by the counsel for the

petitioner in consultation with the arbitrator.

9 The counsel for the respondent has also contended that the

proceedings before the substituted arbitrator be undertaken with

effect from the stage where left by the arbitrator being substituted.

Mr. H.K. Bakshi being the previous arbitrator is directed to transfer

the entire arbitral record in his custody to substitute arbitrator

through the counsel for the petitioner. Justice Bahari shall on

perusal thereof consider whether the proceedings are to be

continued from the stage left by the earlier arbitrator or otherwise.

10 The petition as well as all pending applications are disposed of.

RAJIV SAHAI ENDLAW (JUDGE)

16Th September, 2009 J