Delhi High Court
Mithlesh Kumar Aggarwal vs Athena Infrastructure Ltd on 23 March, 2017
$~19
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P.(T) 4/2017
MITHLESH KUMAR AGGARWAL ..... Petitioner
Through Mr R.K. Saini and Ms Minal Sehgal,
Advocates.
versus
ATHENA INFRASTRUCTURE LTD. ..... Respondent
Through Mr Sachin Datta, Senior Advocate with
Mr Pallav Pandey, Advocate with Mr Manmohan
Singh, AR,
CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU
ORDER
% 23.03.2017
VIBHU BAKHRU,J
IA No. 3669/2017
1. Allowed, subject to all just exceptions.
2. The application is disposed of.
O.M.P.(T) 4/2017 & IA No.3670/2017 (stay)
3. This is a petition filed under Section 15 (2) of the Arbitration and
Conciliation Act, 1996 (hereafter 'the Act') for appointment of an arbitrator
in place of Justice S.K. Mahajan (Retired) who has since expired on
23.09.2016.
4. Justice S.K. Mahajan (Retired) was appointed by this Court by an
order dated 30.04.2014 in the arbitration petition (ARB. P. No. 137/2014)
filed by the petitioner under Section 11 of the Act. The learned counsel for
the parties state that the pleadings before the arbitrator have been completed
and evidence is yet to be recorded.
5. Mr Datta, learned Senior Counsel appearing for the respondent does
not dispute that an arbitrator is be appointed in place of late Justice S.K.
Mahajan (Retired). He, however, submits that as per the agreement, the
respondent must be given an opportunity to re-appoint an arbitrator in place
of late Justice S.K. Mahajan. This Court is unable to accede to the aforesaid
submission principally for the reason that late Justice S.K. Mahajan
(Retired) was appointed by this Court in a petition under Section 11 of the
Act, since the respondent had forfeited its right to appoint an arbitrator.
6. The Supreme Court in Yashwith Constructions (P) Ltd. v. Simplex
Concrete Piles India Ltd. and Anr.: (2006) 6 SCC 204 had interpreted
Section 15(2) of the Act liberally and had explained that the provision
applicable for appointment of the substitute arbitrator would be the same as
"at the initial stage". Thus, the expression "rules" in Section 15(2) of the
Act, was read to imply that the same procedure which was applicable for
appointment of an arbitrator, who is sought to be substituted, would be
applicable for appointment of the substitute arbitrator.
7. In The Chhotanagpur Regional Handloom v. Association of
Corporation and Apex: Manu/DE/2600/2008, a Coordinate Bench of this
Court while considering the applicability of the provisions of Section 15(2)
of the Act in context of the petition filed under Section 14 of the Act,
rejected the contention that after the mandate of the arbitral tribunal was
declared as terminated under Section 14 of the Act, the parties were to be
relegated to start the process under the original agreement and this Court
ought not to proceed to appoint a substitute arbitrator. The Court referred to
the decision of the Supreme Court in Yashwith Constructions (supra) and
held that Section 15(2) of the Act has to be viewed as a part of a broader
effort to strengthen the alternative dispute resolution mechanism rather than
undermine it. Relegating the parties to commence the process once again
may lead to confusion and may in certain circumstances compel one of the
parties to again approach the Court under Section 11(6) of the Act which
could not be the legislative intent. The Court held that Section 15(2)
required the Court to appoint an arbitrator as a logical sequitur to Section 14
of the Act.
8. In Ramjee Power Construction Ltd. v. Damodar Valley Corporation:
(2009) 2 Arb LR 625, the Calcutta High Court considered the decision of
the Supreme Court in Yashwith Construction (supra) and observed as
under:-
"As observed above, the expression "rules that were
applicable to the appointment of the arbitrator being
replaced" in section 15, have carefully been chosen. If the
arbitrator being replaced was appointed by the Chief Justice
and/or his designate in accordance with section 11 of the
1996 Act read with the applicable rules, the substitute
arbitrator would also have to be appointed by the Chief
Justice and/or his designate in the same manner."
9. The Calcutta High Court following the decision of the Supreme Court
in Datar Switchgears Ltd. v. Tata Finance Ltd. and Anr.: (2002) 8 SCC
151, held that once an application under Section 11 was made, the right of
either party to appoint an arbitrator stood extinguished. In view of the
aforesaid, the Court reasoned that if the arbitrator is appointed in accordance
with Section 11 of the Act, the substitute arbitrator would also have to be
appointed in the same manner. This Court respectfully concurs with the
aforesaid view.
10. In the circumstances, Justice Nisar Ahmad Kakru, (Retired), former
Chief Justice of the Andhra Pradesh High Court (Mobile No. +91
7382603046 and +91 9419000938) is appointed as the sole arbitrator to
adjudicate the disputes between the parties. The arbitrator shall proceed
from the same stage as left by late Justice S.K. Mahajan (Retired). This is
subject to the arbitrator making the necessary disclosure under Section 12 of
the Act and not being ineligible under Section 12(5) of the Act.
11. The petition and the pending application are disposed of.
VIBHU BAKHRU, J
MARCH 23, 2017
RK
