Delhi High Court
M/S. U.I. Carriers vs Union Of India & Anr on 3 October, 2013
Author: Rajiv Shakdher
$~6
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on : 03.10.2013
+ ARB.P. 243/2013
M/S. U.I. CARRIERS ..... Petitioner
Through: Mr. Ashish Mohan and Mr. Chetan Rai
Wahi, Advocates
versus
UNION OF INDIA & ANR. ..... Respondents
Through: Mr. R.N. Singh and Mr. A.S. Singh,
Advocates
CORAM:
HON'BLE MR. JUSTICE RAJIV SHAKDHER
RAJIV SHAKDHER, J.
1. This is a petition filed under Section 11 of the Arbitration and
Conciliation Act, 1996. Notice in this petition was issued on
29.07.2013. On that date, the respondents were represented by their
Advocates. Accordingly, four weeks were granted to the respondents
to file a reply. The matter was made returnable today i.e.,
03.10.2013. No reply has been filed in the matter.
2. It is the case of the petitioner that despite invocation of the
arbitration agreement, which is contained in clause 27 of the contract
obtaining between the parties, respondents have failed to appoint an
arbitrator.
3. Briefly, it is the case of the petitioner that against a tender
invited for train no.14681 Ex. NDLS to JUC, the petitioner had submitted
ARB.P. 243/2013 page 1 of 5
its bid. Consequent to the submission of the bid, the petitioner was
awarded a contract for lease of SLR in the aforementioned train for
the period 02.09.2011 to 01.09.2014 at a lease rent of Rs.6,411/- for
each journey. In addition to the lease rent, the petitioner was called
upon to pay 2% towards terminal development charge.
4. To be noted, the said tender was taken out by the respondents in
consonance with a comprehensive leasing policy formulated by them.
5. Consequent to the above, a formal contract was executed
between the parties on 02.11.2012.
6. Evidently, the respondents on 16.05.2013, issued a show cause
notice to the petitioner for what they construed as defaults by the
petitioner vis-a-vis not only the contract in issue, as indicated above,
but also in respect of two other contracts. The 16.05.2013 show cause
notice alleged that the petitioner abandoned the contracts while they
were still subsisting. This charge pertained to not only to the train in
issue but also other trains. The petitioner was called upon to explain
as to why the contract in issue, ought not to be cancelled.
6.1 The petitioner was also called upon to explain as to why the
registration certificate be not cancelled and the registration fee be
forfeited. The petitioner was also put to notice with regard to
blacklisting and debarment in respect of future tenders /quotations for
the period of five (5) years.
7. The counsel for the petitioner says that though a reply was
filed, the respondents proceeded to pass an order of blacklisting and
ARB.P. 243/2013 page 2 of 5
debarment qua the petitioner.
8. In the captioned petition though, the grievance of the petitioner
appears to be with regard to the theft of cargo during the period when
the petitioner had worked the contract in issue. The petitioner
appears to have articulated his grievance in the correspondence
exchanged with the respondents, including the notice invoking
arbitration dated 01.06.2012.
8.1 The learned counsel for the petitioner says that the notice dated
01.06.2012 was not responded to by the respondents.
9. In view of the fact that there is no return filed by the
respondents on record, there is no rebuttal of the averments made by
the petitioner. Be that as it may, there can be no dispute that there is
an arbitration clause obtaining between the parties. The relevant
clause reads as follows :-
"..In the event of any difference of opinion or dispute
between the Railway Administration and the Leaseholder as
to the respective rights and obligations of the parties
hereunder of as the true intent and meaning of these presents
or any articles of conditions thereof. Such difference of
opinion shall be referred to the sole arbitrator or any officer
appointed by the General Manager, Northern Railway,
Baroda House, New Delhi for the time being whose decision
shall be final, conclusive and binding on the parties, the
intention of the parties being that every matter in respect of
this agreement must be decided by him as sole arbitrator and
not taken to a Civil Court. All disputes are subject to the
territorial jurisdiction of Courts located in Delhi only.."
ARB.P. 243/2013 page 3 of 5
9.1 A perusal of the clause would show that the General Manager
of the respondents is authorised to appoint any officer as the Sole
Arbitrator in case disputes erupt between the parties. In this particular
case, the respondents quite clearly did not appoint an arbitrator, and
if, the petitioner is to be believed, the respondents did not respond to
the notice issued in that behalf. On the date when notice was issued
in the present petition, admittedly, no arbitrator was appointed.
9.2 As a matter of fact, Mr. Singh seeks four weeks time to appoint
an arbitrator. In my view, respondents have lost their right to appoint
an arbitrator in terms of clause 27 of the contract obtaining between
the parties. Therefore, as prayed, the petition is allowed. Mr. Rakesh
Kapoor, a retired District & Sessions Judge (Contact No.011-
23993200), is appointed as an arbitrator in the matter.
10. I am informed that the claims of the petitioner would not
exceed Rs.11 Lakhs (approx) including interest and costs. In these
circumstances, I deem it fit to direct that the fee schedule prescribed
by the Delhi International Arbitration Centre (DIAC) should govern
the proceedings. Mr. Mohan, the learned counsel for the petitioner
says that he is agreeable to the same. Since no specific rules have
been prescribed under the contract, in the fitness of things, it is further
directed that rules prescribed by the DIAC should govern the
proceedings. It is ordered accordingly.
ARB.P. 243/2013 page 4 of 5
11. With the aforesaid observations in place, the captioned petition
is disposed of.
RAJIV SHAKDHER, J
OCTOBER 03, 2013
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ARB.P. 243/2013 page 5 of 5
