Delhi High Court
Ashok Kumar R & Ors. vs Pnb Housing Fiannce Limited on 20 May, 2021
$~14
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P. (T) (COMM.) 39/2021, IAs 5802/2021 (stay) and
5803/2021 (exemption)
ASHOK KUMAR R & ORS. ..... Petitioners
Through Mr. Kushal Gupta, Adv.
versus
PNB HOUSING FINANCE LIMITED ..... Respondent
Through Mr. Ajay Uppal, Adv.
CORAM:
HON'BLE MR. JUSTICE C .HARI SHANKAR
O R D E R (ORAL)
% 20.05.2021
(video-conferencing)
O.M.P. (T) (COMM.) 39/2021
1. Arbitral proceedings, between the parties, were pending before
Mr. K.K. Nangia, who had been appointed as arbitrator in terms of
Clause 10.8 of the Loan Agreement, whereunder the disputes between
the parties arose. Clause 10.8 of the Loan Agreement reads thus:
"Any and all disputes, claims, differences arising out of or in
connection with the Loan Documents and/or the performance
of the Loan Documents shall be settled by Arbitration to be
referred to a sole arbitrator to be appointed by PNBHFL and
the award, thereupon, shall be binding upon the Parties. The
place of arbitration shall be in Delhi or any other place as
arbitrator may decide and shall be in accordance with the
provisions of the Arbitration and Conciliation Act, 1996 and
any statutory amendments thereof. The proceeding of
Arbitration Tribunal shall be conducted in English Language.
Each party, has to bear cost of representing its case before the
Arbitrator. The cost of arbitration, including fees and
Signature Not Verified
Digitally Signed
By:SUNIL SINGH NEGI
Signing Date:26.05.2021
22:07:09
expenses of the arbitrator, shall be shared equally by the
Parties, unless the award otherwise provides.
Subject to this Article herein, the Borrower(s) further agrees
that all claims, difference and disputes, arising out of or in
relation to dealings/transaction made in pursuant to the Loan
Documents including any question of whether such dealings,
transaction have been entered into or not, shall be subject to
the exclusive jurisdiction of courts at Delhi only."
2. It is a settled position, in law, flowing from Section 12(5) of the
Arbitration and Conciliation Act, 1996 ("1996 Act") read with the VII
Schedule thereto, as well as the judgments of the Supreme Court in
Perkins Eastman Architects DPC v. HSCC (India) Ltd.1 and Bharat
Broadband Network Ltd. v. United Telecoms Ltd. 2 that authority to
appoint an arbitrator cannot be conferred entirely on one of the parties
to the arbitration agreement and that such conferral, even if it exists, is
unenforceable at law. In its recent decision in Haryana Space
Application Centre v. Pan India Consultants Pvt Ltd, 3 the Supreme
Court has further clarified that Section 12(5) of the 1996 Act is
mandatory.
3. The petitioner had moved an application, before the learned
Arbitrator under Section 13 of the 1996 Act, questioning the authority
of the arbitrator to continue with the arbitral proceedings, and relying,
for the purpose, on Perkins Eastman1 and other authorities.
4. The learned Arbitrator has disposed of the said application vide
(2019) 2 SCC 271
(2019) 5 SCC 755
(2021) 3 SCC 103
Signature Not Verified
Digitally Signed
By:SUNIL SINGH NEGI
Signing Date:26.05.2021
22:07:09
order dated 18th May, 2021, by recusing from the proceedings.
5. Learned Counsel for the parties are agreeable, ad idem, that in
these circumstances, the Court may appoint an arbitrator in place of
Mr. Nangia. The stakes in the matter are stated to be in the region of
around ₹ 3 crores.
6. In view thereof, this Court appoints Mr. Sushil Dutt Salwan,
learned Senior Advocate, as the Arbitrator to arbitrate on the disputes
between the parties. The details of the learned Arbitrator are as under:
Mobile No. : 9811044412
E-mail ID : [email protected]
7. The learned Arbitrator would file the requisite disclosure under
Section 12(2) of the 1996 Act within a week of entering on reference.
8. The learned Arbitrator is also permitted to continue the
proceedings from the point where they stand at present.
9. Mr. Nangia is also directed to return the arbitral records to the
parties, so that they could be furnished to the Arbitrator appointed by
the order passed today.
10. With the aforesaid directions, the present petition stands
disposed of.
Signature Not Verified
Digitally Signed
By:SUNIL SINGH NEGI
Signing Date:26.05.2021
22:07:09
IAs 5802/2021 (stay) and 5803/2021 (exemption)
In view of the order passed in the petition, these applications
stand disposed of.
C.HARI SHANKAR, J
MAY 20, 2021
r.bararia
Signature Not Verified
Digitally Signed
By:SUNIL SINGH NEGI
Signing Date:26.05.2021
22:07:09
