Madhya Pradesh High Court
Dharmendra Sonkar vs Union Of India on 5 March, 2025
Author: Vishal Dhagat
Bench: Vishal Dhagat
NEUTRAL CITATION NO. 2025:MPHC-JBP:10376
1 AC-80-2024
IN THE HIGH COURT OF MADHYA
PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE VISHAL DHAGAT
ON THE 5th OF MARCH, 2025
ARBITRATION CASE No. 80 of 2024
DHARMENDRA SONKAR
Versus
UNION OF INDIA AND OTHERS
Appearance:
Shri Atul Choudhari - Advocate with Shri Yash Choudhari - Advocate for
the applicant.
Shri Pushpendra Yadav - Deputy Solicitor General with Shri Devesh Bhojne
- Advocate for the respondents.
ORDER
Applicant has filed application under Sections 11(6) of the
Arbitration and Conciliation Act, 1996 for appointment of Arbitrator.
2. Learned counsel appearing for the applicant submitted that
there is an arbitration agreement dated 18.03.2019 between the applicant
and non-applicants wherein in cases of dispute, same is to be referred to
sole Arbitrator to any person appointed by Chief Commercial Manager
West Central Railway, Jabalpur.
3. Learned Deputy Solicitor General appearing for respondents
objected to application for appointment of Arbitrator. It is submitted that
applicant had approached District Judge by filing an application under
Section 9 of the Arbitration and Conciliation Act, 1996. In said
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2 AC-80-2024
application, direction has been given to party to appoint Arbitrator in
accordance with Clause-26 of the agreement. It is submitted that after
issuance of said direction, respondents had issued a notice to applicant
but applicant had not responded to the said notice. Respondents are
ready to appoint Arbitrator as per Clause-26 of the agreement.
4. Heard the counsel for the parties.
5. Section 9 of the Arbitration and Conciliation Act, 1996 gives
power to Court to pass orders of interim nature. Said proceeding is to be
undertaken when Arbitration has not been appointed. District Judge
does not have any jurisdiction to pass order for appointment of
Arbitrator. No direction could have been given by District Judge to
appoint Arbitrator in accordance with Clause-26 of the agreement.
Further, independent Arbitrator is to be appointed in the case. Applicant
has not waived off his right under Section 12(5) of the Act of 1996.
Apex Court in case of Central Organization for Railway
Electrification Vs. M/s ECI SPIC SMO MCML (JV) a Joint Venture
Company i n Civil Appeal No.9486-9487/2019 reported in 2024 SCC
Online SC 3219. Conclusion of said judgment mentioned in paragraph
No.169 is quoted as under:-
"169. In view of the above discussion, we conclude that:
a. The principle of equal treatment of parties applies at
all stages of arbitration proceedings, including the stage of
appointment of arbitrators;
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3 AC-80-2024
b. The Arbitration Act does not prohibit PSUs from
empanelling potential arbitrators. However, an arbitration
clause cannot mandate the other party to select its arbitrator
from the panel curated by PSUs;
c. A clause that allows one party to unilaterally appoint
a sole arbitrator gives rise to justifiable doubts as to the
independence and impartiality of the arbitrator. Further, such
a unilateral clause is exclusive and hinders equal participation
of the other party in the appointment process of arbitrators;
d. In the appointment of a three-member panel,
mandating the other party to select its arbitrator from a
curated panel of potential arbitrators is against the principle of
equal treatment of parties. In this situation, there is no
effective counterbalance because parties do not participate
equally in the process of appointing arbitrators. The process
of appointing arbitrators in CORE (supra) is unequal and
prejudiced in favour of the Railways;
e. Unilateral appointment clauses in public-private
contracts are violative of Article 14 of the Constitution;
f. The principle of express waiver contained under the
proviso to Section 12(5) also applies to situations where the
parties seek to waive the allegation of bias against an
arbitrator appointed unilaterally by one of the parties.
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4 AC-80-2024
After the disputes have arisen, the parties can determine
whether there is a necessity to waive the nemo judex rule; and
g. The law laid down in the present reference will apply
prospectively to arbitrator appointments to be made after the
date of this judgment. This direction applies to three-member
tribunals."
6. In view of same, objections raised by learned Deputy Solicitor
General appearing for respondents, are dismissed.
7. Order of District Judge so far as it relates to appointment of
Arbitrator in accordance with Clause-26 of the agreement, is set aside.
8. In view of aforesaid facts and circumstances of the case,
arbitration case is disposed off by passing following orders:-
( i ) Shri Ravi Shankar Jha (Retd.), Address:- 913, Golbazar,
Wright Town Jabalpur (MP), Mobile No.-9425153362, E-mail-
[email protected] is appointed as Arbitrator to resolve the dispute
between the parties, subject to the declarations being made under
Section 12 of the 1996 Act (as amended) with respect to the
independence and impartiality of the Arbitrator and the ability to
devote sufficient time to complete the arbitration within the period
specified by Section 29-A of the 1996 Act.
(ii) Said arbitration will take place at Jabalpur.
(iii) The Arbitrator is, however, at liberty to conduct the
proceedings at a convenient venue as per the convenience of the
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5 AC-80-2024
Arbitrator and the parties, if so required. The Arbitrator will be paid
fees in accordance with the Fourth Schedule of the 1996 Act. Both
parties will share the costs of the arbitration equally.
(iv) Parties are directed to deposit necessary charges and fees as
per M.P. Arbitration Center (Domestic and International) Rule, 2019.
(v) Other provisions of Section 15 (3)(4) of the Arbitration and
Conciliation Act, 1996 will apply to Substitute Arbitrator.
8. With aforesaid directions, arbitration case is disposed off.
Certified copy as per rules.
(VISHAL DHAGAT)
JUDGE
$A
