Bhupender Lal Ghai vs Crown Buildtech Private Limited
2011 Latest Caselaw 3324 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI


+                         Date of Decision: 14.07.2011


%                    ARB.P. 470/2009 & ARB. P. 471/2009



       BHUPENDER LAL GHAI                              ..... Petitioner
                     Through:         Mr. D.S. Chadha, Advocate

                     versus


       CROWN BUILDTECH PRIVATE LIMITED D+       .....  Respondent
                     Through:  Mr. Sunil Narula, Advocate



       CORAM:
       HON'BLE MR. JUSTICE VIPIN SANGHI


       1. Whether the Reporters of local papers may
          be allowed to see the judgment?           :        No

       2. To be referred to Reporter or not?           :     Yes

       3. Whether the judgment should be reported
          in the Digest?                               :     Yes



VIPIN SANGHI, J. (Oral)

I.A. Nos.5824/2011 & 8248/2011 in Arb. P. No.470/2009 AND I.A. Nos.5823/2011 & 8249/2011 in Arb. P. No.471/2009

1. The applications, i.e. I.A. No.5824/2011 and I.A. No.5823/2011

had been jointly filed by the parties, duly signed by the parties and

their respective counsels and also supported by the affidavits of the

petitioner and Mr. Surendra Vasudeva, authorized representative of the

respondent, with the prayer that the Court may allow the payment of

additional fee to the learned sole Arbitrator in accordance with the

Delhi High Court Arbitration Centre (Arbitrators Fees) Rules to be

shared equally, after deducting the amount of Rs.2 lacs, which was the

lump sum fee fixed by the court in two cases, including the present.

The need for hearing detailed submissions of the learned counsel and

for passing this order has arisen, as the respondent has sought to

withdraw its consent and sought to allege bias against the learned

Arbitrator.

2. The parties entered into two contacts dated 23.02.2007 which

contain arbitration agreements in clauses 43 and 37 respectively. The

arbitration agreements provide for resolution of the disputes arising

out of the respective agreements through a Sole Arbitrator. As

disputes arose between the parties, the two arbitration agreements

were invoked by the petitioner. Since the parties could not agree on

the name of the sole Arbitrator in terms of the arbitration agreements

in two agreements in question, the petitioner preferred Arb. Pet.

No.470/2009 and Arb. Pet. No. 471/2009 in this Court, which were

disposed of by the Court on 15.02.2010 appointing Mr. Justice Ajit

Prakash Shah, retired Chief Justice of this Court as the sole Arbitrator.

The Court fixed consolidated lumpsum fee of Rs.2 lacs in both the

cases.

3. The proceedings in the two cases started before the learned

Arbitrator. It appears that extensive evidence was recorded before

him, which was partially common and partially distinct.

4. On 14.01.2011, the parties appeared before the learned

Arbitrator and agreed that the Arbitrator be paid his fee in accordance

with the Delhi High Court Arbitration Centre (Arbitrators fees) Rules,

after deducting the amount of Rs.2 lacs already paid to him. After the

passing of the said order, the petitioner approached the Delhi High

Court Arbitration Centre, communicating to the centre the said order,

and requesting them to inform as to what is the balance fee to be paid

by each of the parties.

5. On 07.02.2011, the Delhi High Court Arbitration Centre

communicated to the petitioner its view that since the fee had been

fixed by this Court by a judicial order, the same could be modified only

by the Court and could not be modified by the Arbitration Centre in its

administrative capacity. It is only thereafter that the present

applications i.e. I.A. No.5824/2011 and I.A. No.5823/2011 were

preferred, as aforesaid.

6. These applications came up before the Court on 08.04.2011. On

the said date, counsel for the respondent stated that the respondent

was not willing to pay any additional fee to the learned Arbitrator. The

Court observed that the said statement was contrary to the joint

application moved by the parties. Consequently, the counsel for the

respondent Mr. Sunil Narula as well as the respondent, Mr. Surendra

Vasudeva were required to remain present in Court.

7. These applications were adjourned from time to time, and no

substantive orders were passed by the Court on these applications. In

the meantime, the respondent moved an application under Section 13

of the Act before the arbitral tribunal on 18.04.2011 making allegations

of personal bias against the learned Arbitrator. By this stage, the trial

before the learned Arbitrator stood completed, and the learned

Arbitrator had fixed 5th and 6th May, 2011 for hearing arguments in the

two matters.

8. The premise on which the application under Section 13 was filed

was that the respondent's counsel had sent a communication to the

respondent on 15.04.2011, wherein it was alleged that the learned

Arbitrator had acted with bias during the proceedings held on

28.03.2011 and 29.03.2011.

9. This application was entirely based on the communication sent

by the respondent's counsel Mr. Narula, and it was alleged that on

28.03.2011, when the application of the respondent for recalling of the

witness was listed for arguments, the learned Arbitrator without

hearing the same, announced that he had already passed the order in

respect of the said application, despite the fact the said witness had

categorically submitted during the cross-examination that he would be

able to produce certain documents later on. It was alleged that the

learned Arbitrator did not hear the plea of the respondent's , and did

not appreciate the importance of the documents required to be

produced, and without affording any opportunity of hearing, dismissed

the application without giving any reasons. It was also alleged that the

respondent's lawyer had raised objections, but the learned Arbitrator

did not pay any heed to the same.

10. It was also alleged that during the cross-examination of the

respondent's witness on 28.03.2011 and 29.03.2011, the learned

Arbitrator discriminated, and arbitrarily wanted to change the rules in

the middle of the proceedings. According to the respondent, initially, it

had been directed during the course of examination of the claimants'

witness, that all questions to be put to the witness be first framed on

the computer screen, and then only the same would be answered by

the witness. However, the learned Arbitrator changed the rules at time

of cross-examination of the respondent's witness, by stipulating that

the witness should first answer the questions put to him, and then the

said questions be framed alongwith answers, on the computer screen.

It was also alleged that the respondent had raised objections in this

regard. However, the learned Arbitrator brushed aside those

objections on the ground that the claimant was a senior citizen and he

would require to be given liberal preference.

11. It was alleged that the learned Arbitrator was not concerned

about the specific provisions contained in Section 18 of the Act, which

obliges the Arbitrator to treat the parties equally irrespective of age

factor. It was also alleged, on the basis of communication of Mr.

Narula, that during the proceedings on 28.03.2011 and 29.03.2011,

the learned Arbitrator was very courteous to the claimant, but was

very hostile to the respondent's representative and its counsel. It was

also alleged that upon the respondent's counsel saying that he would

not raise any objection to any question being asked by the claimants

counsel, in the afore alleged scenario, the learned Arbitrator lost his

temper, packed up his files and threatened to walk out of the

proceedings. According to the respondent, even prior to the aforesaid

dates, the learned Arbitrator had shown partisan approach. The

aforesaid allegations were said to be the basis for raising suspicion in

the mind of the respondent as to the impartiality of the learned

Arbitrator.

12. The allegations made in the said application were replied to, and

vehemently opposed by the claimant. The learned Arbitrator passed

an order on 12.05.2011 rejecting the allegations made by the

respondent/claimant vide a detailed order. He also recorded about,

what he called unjustified and objectionable behaviour of Mr. Sunil

Mittal, Advocate who had appeared and argued the application for

recusal moved by the respondent/applicant, as Mr. Mittal had leveled

wild and baseless allegations against the Arbitrator and had

deliberately provoked the Arbitrator to such an extent that he had

contemplated walking out of the proceedings. The learned Arbitrator

also recorded that Mr. Mittal had crossed all bounds of decency and

professional ethics and etiquette in trying to attack the Arbitrator's

integrity causing him great pain and anguish.

13. On account of the said conduct of the respondent's counsel, the

learned Arbitrator deemed it appropriate to recuse himself from the

proceedings. Not only that, he also expressed his desire to return the

fee of Rs.2 lacs received by him, and he stated that he had already

deposited the cheques with the Arbitration Centre, and the parties may

collect the same from the Coordinator.

14. The matter came up before the Court on 30.05.2011. After

noticing the aforesaid order passed by the learned Arbitrator on

12.05.2011, and after hearing the learned counsels, this Court was of

the, prima facie, view that the conduct of Mr. Mittal, Advocate and of

the respondent tantamounted to criminal contempt of court under the

Contempt of Courts Act. Accordingly, on that aspect, the matter was

referred to the appropriate bench, after obtaining orders of Hon'ble the

Chief Justice.

15. Learned counsel for the petitioner submits that the allegations

made by the respondent/applicant in its application under Section 13

before the learned Arbitrator were absolutely baseless and wild. They

are frivolous and are the figment of the respondent's imagination, not

supported by the record. On the contrary, the record speaks

otherwise. It is submitted that these allegations were made only to

somehow scuttle the arbitration proceedings by getting the learned

Arbitrator out of the way.

16. So far as the allegation of the respondent that the learned

Arbitrator had rejected the respondent's application for recalling of

witness without hearing the application, and by announcing that he

had already passed an order in respect of the said application, is

concerned, it is pointed out that the proceedings recorded on

28.03.2011 speak to the contrary. The proceedings recorded on the

said date read as follows:

"Present:

       For the Claimant             Sh. D. S. Chadha, Advocate
                                    Sh. B.L.Ghai, Claimant.

       For the Respondent           Sh. Sunil Narula with Ms. Deepti
                                    Gupta Advocates.
                                    Mr.       Surender     Vasudev,
                                    Respondent.

Application on behalf of respondent for recalling of witness Mr. Vinit Shukla.

I have heard the submissions of both the Ld. Counsel. I do not see any ground to grant the prayer of the respondent for recalling the witness. Hence, the application is rejected.

(A.P.SHAH) ARBITRATOR 28.03.2011"

(emphasis supplied)

17. Copy of the proceedings filed on record show that the said order

was signed by the petitioner, Mr. Bhupender Lal Ghai, the respondent's

representative Mr. Surendra Vasudeva, the petitioners counsel Mr. D.S.

Chadha, the respondent's counsels Mr. Sunil Narula and Ms. Deepti

Gupta.

18. The submission of learned counsel for the petitioner is that if the

said application had been disposed of even before hearing the

counsels, the recording made by the tribunal would have been false,

and the respondent and his counsel would not have signed the same.

They would have, atleast, recorded their protest or demur in the said

order while signing the proceedings. However, no such protest was

raised either during the said proceedings, or soon thereafter. For the

first time, the allegations were raised by filing the application on

18.04.2011, on the basis of an email communication sent by the

respondent's counsel to the respondent on 15.04.2011. Mr. Chadha

further submits that though the application for recusal was entirely

premised on the communication stated to have been sent by Mr.

Narula to the respondent, neither the said communication was filed

alongwith the application, nor was the application was supported by

the affidavit of Mr. Narula.

19. It is also pointed out that the learned Arbitrator has dealt with

each and every allegations of bias alleged by the respondent/claimant

in his order dated 12.05.2011. So far as the allegation about rejection

of application of the respondent for recall of witness is concerned, the

learned Arbitrator has recorded that the respondent had made a

complete volte face inasmuch, as, the counsel for the respondent,

Mr.Narula had himself stated categorically in front of all the parties

that he did not wish to add anything in oral submission to the said

application. The learned Arbitrator also records the reasons for

rejecting the application for recall of witness. He observed that the

documents sought to be produced by the witness (who was sought to

be recalled by the said application), were TDS certificates of Nilkamal

Ltd. purportedly issued to the claimant. However, the respondent had

already brought on record photocopies of two such TDS certificates,

but it was seen that the same did not correspond to the claimant's

Personal Account Number (PAN). Therefore, while deciding the

application, the Arbitrator had exercised his judicial discretion in all

fairness and only in order to meet the ends of justice. The learned

Arbitrator also noted that the respondent even while arguing the

application for recusal had not stated as to what would be the

significance of such document. He also notes that at the time of

dismissal of the application for recall of witness, no objection or

protest, of whatsoever nature, was made by the counsel for the

respondent against such dismissal.

20. The allegation regarding equal treatment not being met to both

the parties was responded to by the learned Arbitrator in the following

manner:

"The respondent has alleged that I was very courteous towards the claimant and that I was allegedly very hostile towards the respondent. It is alleged that I had told the respondent's witness that he should answer the questions first and only thereafter, the said questions shall be framed on the screen and that the same is allegedly in violation of Section 18 of the Act, i.e. "Equal treatment of parties". It is trite to mention that the claimant is a very old man, being 74 years and had genuine difficulty in understating questions put to him in English. Furthermore, there was a specific request by the claimant to the Arbitrator that the questions be kindly translated for his understanding. However, at that time, the respondent did not raise any objection to the said translation whatsoever and neither is it shown as to how the said translation for the claimant could have possible caused any prejudice to the respondent. In fact, it is not out of place to mention here that with respect to a few short questions the respondent's witness had himself volunteered to answer these questions without them being framed on the screen. However, the same now seems to be deliberately being blown out of proportion with an oblique motive. Although the said allegation is highly misleading and incorrect, yet even if assuming that the same is correct, there is not even the slightest averment to substantiate as to what prejudice has been caused to the respondent."

21. He also observed that the allegation that the Arbitrator had

objected to submission of documents by the respondent was vague, as

no specific instance had been pointed out by the respondent. The said

allegation was belied by the fact that the respondent had repeatedly

taken a number of adjournments which had been granted by the

tribunal in the interest of justice. The said position is borne out from

the record of the proceedings.

22. The learned Arbitrator also raised the question as to why the said

application for recusal was being moved when the arbitration

proceedings were about to be completed, when the proceedings had

been pending before him for several months. If there had been a

partisan attitude adopted by the learned Arbitrator, the same would

have surfaced sooner and the respondent would have opposed it.

23. On the other hand, the submission of Mr. Narula is that he had

sent an email communication to his client on 15.04.2011. He has filed

on record a print out of the said email communication. He submits

that there were various other documents which the respondent desired

to produce and for that purpose, the recall of the witness was sought

before the learned Arbitrator. Reference is made to paras 3, 4 and 5 of

the application made for recalling of the witness, which read as follows:

"3. It submitted that the said witness in cross examination was questioned regarding the deduction of TDS on issue of cheques in favor of claimant towards payment of rent and issuance of cheques towards payments of rent etc. (e.g. Q. Nos.12, 13, 14, 15 & 17).

4. That the said witness in reply to the aforesaid questions had deposed that he would be able to produce the relevant material/documents, if reasonable time was given as he was not in possession of those details at the time of cross examination.

5. In view of the aforesaid it is submitted that in the interest of justice it is necessary to recall the said witness with the relevant material/documents".

24. Mr. Narula also submits that on account of the grievance of the

respondent that the Arbitrator was not conducting the proceedings

fairly, the respondent had withdrawn its consent to the enhancement

of the fees of the learned Arbitrator.

25. After the passing of the order dated 12.05.2011 by the learned

Arbitrator, the petitioner moved I.A. No.8248/2011 and I.A.

No.8249/2011 under Section 15 read with Section 11 of the Act, firstly

requiring the learned Arbitrator to reconsider the decision of recusal,

and in the alternative to appoint a substitute sole Arbitrator to finally

hear and decide the two arbitration cases.

26. In response to these applications, the submission of counsel for

the respondent is that upon termination of the mandate of the learned

Arbitrator under Section 15 of the Act, the appointment of the

Arbitrator has to be in accordance with the prescribed procedure. He

submits that under the arbitration agreements of the parties contained

in clauses 43 and 37 respectively of the two agreements, it had been,

inter alia, agreed that:

Clause 43 in the agreement in relation to which Arb. Pet No.470/2009 was preferred

"All or any disputes that may arise with respect to the provisions of this Agreement including the interpretation and validity of the terms thereof and the respective rights and obligations of the Parties, shall be settled by mutual discussion, failing which the same shall be referred to arbitration. The arbitration proceedings shall

be carried out by a sole Arbitrator, to be appointed by jointly by the Developer & Buyer, under the Arbitration and Conciliation Act, 1996".

Clause 37 in the agreement in relation to which Arb. Pet No.471/2009 was preferred

"All or any disputes that may arise with respect to the provisions of this Sale Deed including the interpretation and validity of the terms thereof and the respective rights and obligations of the Parties, shall be settled by mutual discussion, failing which the same shall be referred to arbitration. The arbitration proceedings shall be carried out by a sole Arbitrator, to be appointed by jointly by the Developer/Vendor & Vendee, under the Arbitration and Conciliation Act, 1996".

27. He, therefore, submits that the parties should first be directed to

mutually agree upon an Arbitrator, and only if they are not able to so

agree, this Court could appoint an Arbitrator in exercise of its power

under Section 11 of the Act. In support of his submission, learned

counsel for the respondent has placed reliance on the decision of the

Supreme Court in National Highways Authority of India &

Another v. Bumihiway DDB Ltd. (JV) & Others, (2006) 10 SCC

763; Surender Pal Singh v. Hindustan Petroleum Corporation

Ltd., 2010 (2) RAJ 258.

28. On the other hand, learned counsel for the petitioner has placed

reliance on the decision of this Court in Haldiram Manufacturing Co.

Ltd. v. SRF International, 139 (2007) DLT 142, wherein it has been

held that where no specific procedure for appointment of Arbitrator is

agreed upon, a petition to seek the appointment of Arbitrator could be

filed without even sending a notice invoking the arbitration agreement.

29. Having heard the submissions of learned counsels for the parties

and perused the record, I am of the view that the joint applications

moved by the parties for enhancement of the fee of the learned

Arbitrator, i.e. I.A. No.5824/2011 and I.A. No.5823/2011 deserve to be

allowed. The said applications had been moved jointly by the

respective parties and duly signed by them as well as their respective

counsels. The applications had been moved in the light of their

agreement recorded in the arbitration proceedings held on 14.01.2011.

This was in recognition of the fact that the arbitral proceedings had

progressed with considerable expense of time and effort of the

Arbitrator. The respondent's only reason for opposing the applications,

even after giving its consent, is stated to be the alleged bias of the

learned Arbitrator. Therefore, it is necessary to examine this aspect of

the matter.

30. A perusal of the records shows that the allegations contained in

the respondent's application under Section 13(2) of the Act are either

contrary to the record, or wholly vague and unsubstantiated. The first

and foremost allegation against the Arbitrator was that the Arbitrator

rejected the respondent's application for recall of the witness without

any hearing of arguments, and despite the protest of the respondent's

counsel. This position is not borne from the record. As noticed herein

above, the order passed on 28.03.2011 by the learned Arbitrator

records that the application has been heard and rejected. This order

was duly signed by the learned counsels and their respective clients

without any protest or demur. No protest was lodged

contemporaneously.

31. It is interesting to note that the application under Section 13(2) is

entirely founded upon the email communication stated to have been

sent by the respondent's counsel on 15.04.2011 to the respondent at

its email address - [email protected] However, the

application for recusal is not supported by the affidavit of the counsel

for the respondent. In fact, that email communication was not even

filed alongwith the application. It was not even produced before the

arbitral tribunal at the time of arguments of the application. It is only

now, for the first time, that the respondent has filed a copy of the said

email communication with its reply. Even though the respondent's

representative Mr. Vasudeva was present in the hearing held on

28.03.2011, and he had signed the arbitral proceedings on that date,

he does not claim personal knowledge of the allegations made against

the arbitral tribunal. The entire application is founded upon what Mr.

Narula had to say in his communication.

32. The reason for rejecting the said application has been explained

by the learned Arbitrator in his order dated 12.05.2011. Pertinently,

though reply to I.A. No. 8248/2011 and I.A. No.8249/2011 was filed by

the respondent on 29.06.2011, the respondent does not even contend

that the various factual assertions contained in the learned Arbitrator's

order dated 12.05.2011 are incorrect or false.

33. The submission of Mr. Narula that there were various other

documents apart from the two TDS certificates referred to in the order

dated 12.05.2011 by the Arbitrator, which the respondent desired to

produce, is neither here nor there. A perusal of the application moved

by the respondent for recall of witness does not even disclose as to

what documents the respondent intended to produce. The learned

Arbitrator noted in his order dated 12.05.2011 that the respondent

even while arguing the said application had failed to point out the

significance of the documents that the respondent desired to produce.

This recordal made by the learned Arbitrator has not been challenged

in these proceedings. Even before me, the so-called documents, which

the respondent may have desired to produce before the Arbitrator for

recalling the witness, have not been placed.

34. I may at this stage itself note that, in any event, the

circumstance of dismissal of the respondent's application for recall of

the witness could not have, by itself, given rise to justifiable doubts as

to the learned Arbitrator's independence or impartiality. A party may

feel aggrieved by an order or award passed by an Arbitrator. An

Arbitrator may, in fact, have erred in passing an order. But that, by

itself, cannot be considered to be a circumstance which would give rise

to justifiable doubts regarding the independence or impartiality of the

Arbitrator. A bona fide judgmental error either by a court or an

Arbitrator even if committed, cannot, in normal circumstances, be

construed as a circumstance giving rise to justifiable doubt about the

independence or impartiality of the court or the Arbitrator. There has

to be something more than that. Something more specific.

35. The learned Arbitrator has elaborately dealt with the allegation

that the two parties were not being equally treated during the

proceedings. The respondent has not questioned the factual recordal

made by the learned Arbitrator which, even otherwise, appears to be

perfectly reasonable and plausible.

36. The allegation that the Arbitrator raised objection to submission

of every document tendered by the respondent has been rejected by

the learned Arbitrator by observing that the allegation is vague as no

specific instance has been pointed out by the respondent. Not only

this statement of the learned Arbitrator has gone unrebutted before

me, even before me, no specific instance in this regard has been

pointed by the respondent.

37. Consequently, I am of the view that the learned Arbitrator was

perfectly right in rejecting each and every allegation made by the

respondent to allege bias against him. The issue raised by the

Arbitrator as to why application was filed at such a belated stage of the

arbitration proceedings, when only arguments were left to be heard

before making of the award, is a valid and germane question. To me,

it appears from the conduct of the respondent and its counsel, who

appeared before the Arbitrator on 05.05.2011, that the whole purpose

was to somehow derail the arbitration proceedings; get the learned

Arbitrator to resign, and; to prevent the Arbitrator from making the

award. Consequently, I find absolutely no justification in the

respondent withdrawing its consent to the raising of the fee of the

learned Arbitrator, which, in any event, had been agreed to be paid

only at the rates prescribed under the Delhi High Court Arbitration

Centre (Arbitrators Fees) Rules.

38. The learned Arbitrator, out of his anguish and the hurt suffered

by him, returned the cheques to the parties and they were left with the

Coordinator of the Delhi High Court Arbitration Centre. In my view, the

Arbitrator has to be paid for the work that he has done, and my

request to the learned Arbitrator is to accept the fees and not to refund

any part thereof. Otherwise, it would send a very wrong message to

everyone - that one can ill-treat an Arbitrator; have him removed, and;

also get refund of the fee paid to him for the work done by him.

39. The petitioner has collected and encashed the cheque. However,

learned counsel for the petitioner pleads that the petitioner would be

more than happy to pay the fees of the learned Arbitrator, including

the enhanced fee. Learned counsel for the respondent submits that

the respondent has not encashed the cheque issued by the learned

Arbitrator till date.

40. Consequently, I direct the petitioner to make payment of the fees

of Rs.1 lac alongwith secretarial expenses received from the learned

Arbitrator forthwith. The respondent is directed not to encash the said

cheque issued by the learned Arbitrator. Subject to what is stated in

the following paragraphs, the parties are also directed to make up the

balance fee payable to the learned Arbitrator in terms of the Delhi High

Court Arbitration Centre (Arbitrators Fees) Rules as stated hereinafter.

For computation of fee, the two arbitration cases shall be treated as

separate cases, and the amount shall be computed after deducting the

amount of Rs.2 lacs which the learned Arbitrator is requested to retain.

41. Since the learned Arbitrator has tendered his resignation, and

considering the circumstances in which he has resigned, as I am

inclined to accept the same, and also considering the fact that another

learned Arbitrator would need to be appointed to conclude the

arbitration proceedings, it would be appropriate that 50% of the fee,

computed in the aforesaid manner, is paid to the learned Arbitrator in

each case. The said balance fees be paid to Mr. Justice A.P. Shah,

Retd. Chief Justice, within two weeks from today.

42. So far as I.A. No.8248/2011 and I.A. No.8249/2011 are

concerned, I am not inclined to direct the learned Arbitrator to

reconsider his decision to recuse. This Court has no reason to

entertain any doubt about the independence and impartiality of the

learned Arbitrator. However, after the acrimony generated by the

respondent's counsel on 05.05.2011, it would not be appropriate that

the matter is heard any further by the learned Arbitrator so as to

preserve the honour and dignity of the learned Arbitrator.

43. The respondent may have succeeded in temporarily suspending

the arbitration proceedings by its conduct and the conduct of its

counsel. However, that cannot be allowed to scuttle the said

proceedings and prevent the progress of the arbitration cases. The

respondent should also bear exemplary costs for its conduct and the

conduct of its counsel. Appropriate directions shall be issued in the

operative part of this order in this regard.

44. The submission of Mr. Narula that the parties should again be

required to agree upon a name of an Arbitrator in terms of the

arbitration agreement contained in the two agreements, and that the

Court should not appoint an Arbitrator straightaway, has no merit. The

parties could not agree on the name of an Arbitrator even earlier. That

is why, the aforesaid two petitions were preferred by the petitioner.

There is a lot of acrimony between the parties, as is evident from the

proceedings which have gone by before the Arbitrator as well as before

this Court. Neither party has faith in the other. It is a foregone

conclusion that they will not agree on anything - not even on the name

of an Arbitrator. Moreover, I.A. No. 8248/2011 and I.A. No.8249/2011

have been pending since May, 2011. Despite the pendency of these

applications, the parties have not been able to agree on the name of

an Arbitrator mutually. If the respondent was so minded, the

respondent should have approached the petitioner for appointment of

the substitute Arbitrator by suggesting names of the possible Arbitrator

in the meantime. That has not been done by the respondent.

Therefore, there is no force in the respondent's submission that parties

should first be directed to mutually agree upon an Arbitrator.

45. Reliance placed by the respondent on the aforesaid decisions is

wholly misplaced. They are cases where the arbitration agreement

provided for specific procedure to be followed for constitution of the

arbitral tribunal. It was in those circumstances that the Courts held

that after the termination of the mandate of the arbitral tribunal, the

Court should adopt the same rules for appointment of Arbitrator, as

were applied earlier. Even that is not an absolute rule, as would be

seen from the Supreme Court decision in UOI Vs. Singh Builders

Syndicate, (2009) 4 SCC 523; and Ariba India P. Ltd. Vs. M/s Ispal

Industries Ltd., O.M.P. No. 358/2010 decided on 04.07.2011 by this

court.

46. This Court in Haldiram Manufacturing (supra) has held that

where no specific procedure is prescribed for constitution of arbitral

tribunal, a party could approach the Court by filing an application

under Section 11 even without invoking the arbitration agreement.

The judgment is based on the reasoning that notice of a petition filed

under Section 11 of the Act, when served upon the respondent, itself

constitutes the notice invoking arbitration, and if the parties have to

agree, nothing prevents them even after the filing of the petition, to so

mutually agree on an Arbitrator.

47. In view of the aforesaid position, I allow the applications being

I.A. No. 8248/2011 and I.A. No.8249/2011, and appoint Mr. Justice S.N.

Dhingra, retired Judge of this Court to be the sole Arbitrator in both the

cases. The learned Arbitrator is requested to complete the arbitration

proceedings at the earliest, and preferably within the next four

months. The proceedings shall continue from the stage left by the

earlier Arbitrator. The fee of the newly appointed Arbitrator shall be

paid @ 50% of the fee prescribed under the schedule of the Delhi High

Court Arbitration Centre (Arbitrators Fee) Rules, in each case.

48. For its conduct, the respondent is subject to costs of Rs.2 lacs

in both the cases. Out of the said amount, Rs.1 lac be paid to the

petitioner, and the remaining Rs.1 lac be paid to the Advocates

Welfare Fund. Costs be paid within two weeks.

49. Applications stands disposed of.

VIPIN SANGHI, J JULY 14, 2011 sr