[Cites 48, Cited by 0]
Madras High Court
M/S.China Datang Technologies vs M/S.Nlc India Limited on 28 November, 2025
Author: N.Anand Venkatesh
Bench: N. Anand Venkatesh
2025:MHC:2716
Arb.O.P.(Com.Div.) Nos.141
& 333 of 2023
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 28.11.2025
Coram:
THE HON’BLE MR. JUSTICE N. ANAND VENKATESH
Arbitration O.P.(Com.Div.) Nos.141 & 333 of 2023
Arb.O.P. (Com.Div.) No.141 of 2023:
M/s.China Datang Technologies
and Engineering Company Limited
rep.by its Authorized Signatory
Mr.Shakti Singh ...Petitioner
Vs
M/s.NLC India Limited
...Respondent
Arb.O.P. (Com.Div.) No.333 of 2023:
M/s.NLC India Limited by
the Chief General Manager/Contracts,
Corporate Contract Division,
Corporate Office, Neyveli-607801.
Tamil Nadu, India.
...Petitioner
Vs
M/s.China Datang Technologies
and Engineering Company Limited,
incorporated under the laws of
People’s Republic of China ...Respondent
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Arb.O.P.(Com.Div.) Nos.141
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PETITIONS under Sections 34 of the Arbitration and Conciliation
Act, 1996 praying
(i) to set aside the award dated 09.11.2022 passed by the
Tribunal and direct the respondent to restore the amount of the
contract performance guarantee amounting to Rs.55,65,00,000/-
encashed on 11.11.2022 to the petitioner (Arb.O.P.(Com.Div.) No.141
of 2023); and
(ii) to set aside the award dated 09.11.2022 passed by the
Arbitral Tribunal in so far as the award of claim Nos.IV and V of the
respondent for an amount of Rs.5,10,00,000/- (Rupees five crores and
ten lakhs only) and the rejection of the counter claims of the petitioner
(Arb.O.P.(Com.Div.) No.333 of 2023).
For Petitioner in
Arb.O.P.No.141 of 2023 &
Respondent in
Arb.O.P.No.333 of 2023 : Mr.S.Ravi, SC for
Mr.K.P.Pramodh Kumar &
Ms.Jayshri Durga
For Respondent in
Arb.O.P.No.141 of 2023 &
Petitioner in
Arb.O.P.No.333 of 2023 : Mr.AR.L.Sundaresan, ASG
assisted by
Mr.N.Nithianandam
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Arb.O.P.(Com.Div.) Nos.141
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COMMON ORDER
Arb.O.P.(Com.Div.) No.141 of 2023 is a petition filed under
Section 34(2)(b)(iii) of the Arbitration and Conciliation Act, 1996 (for
brevity, the Act) by one M/s.China Datang Technologies and
Engineering Company Limited seeking to set aside an arbitral award
dated 09.11.2022 and for a direction to M/s.NLC India Limited to
restore the contract performance guarantee amounting to Rs.55.65
Crores encashed on 11.11.2022.
2. Arb.O.P.(Com.Div.) No.333 of 2023 is a petition filed under
Section 34(2) of the Act by the said M/s.NLC India Limited questioning
the same award in so far as awarding claims IV and V in favour of the
said M/s.China Datang Technologies and Engineering Company Limited
and rejection of the counter claim made by said M/s.NLC India Limited
were concerned.
3. For the sake of convenience, the parties will be referred to as
per their respective rank before the Arbitral Tribunal.
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4. The brief facts leading to filing of the above petitions are as
follows:
(i) The respondent was required to develop a lignite based
thermal power station called Neyveli New Thermal Power Project
consisting of two units having the capacity of 500 MW each at Neyveli.
The respondent issued a tender dated 19.12.2018 and invited bids for
installation of the flue gas de-sulphurisation system. The claimant also
submitted its bid on 27.5.2019.
(ii) The respondent issued a letter of award dated 31.8.2019 to
the claimant for the works as described in the scope of work for an
amount of Rs.556,50,00,000/-. The effective date of the contract was
31.8.2019. The periods stipulated for completion of trial operation and
whole of the works for the first unit of 500 MW were 27 months and 30
months respectively from the date of the letter of award. With respect
to the second unit of 500 MW, the periods stipulated for completion of
trial operation and whole of the works were 33 months and 36 months
respectively from the date of the letter of award.
(iii) There were delays in the execution of the works and
ultimately, the respondent issued a show cause notice dated
07.7.2020 to the claimant granting 30 days time to them to take
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appropriate measures to the satisfaction of the respondent, failing
which, it was made clear that the contract would be terminated in
terms of Clauses 10.30(i) and 10.25 of the contract.
(iv) On receipt of the said show cause notice, a reply was given
by the claimant explaining as to why they were not able to mobilise
their resources owing to spread of novel corona virus in China and
thereafter in India and the subsequent lock downs imposed by the
Government of India. The claimant also pointed out certain delays,
which were attributable to the respondent. The claimant was also
corresponding with the respondent regularly and had commenced the
procurement activities and kept the respondent updated.
(v) The claimant, through e-mail dated 25.7.2020, intimated the
respondent that they had planned to commence the construction of
their site office by 29.7.2020 and requested for gate passes from the
respondent. But, the respondent was not convinced with various steps
that were taken by the claimant. Further, the respondent issued a
letter dated 07.9.2020 terminating the contract. The respondent also
invoked the contract performance guarantee and encashed the amount
deposited towards it.
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(vi) Pursuant to that, the claimant filed O.A.No.493 of 2020
before this Court under Section 9 of the Act seeking to stay the
invocation of the contract performance guarantee. The said original
application was disposed of by a learned Single Judge of this Court on
12.10.2020. For proper appreciation, the relevant portions in the said
order dated 12.10.2020 are extracted as hereunder:
“4. Considering the trajectory which this
matter has taken today, short facts shorn of
elaboration will suffice and it is not necessary to
dilate qua factual matrix. Suffice to say that the
entire matter pertains to installation of what is
described as 'Flue Gas Desulphurization' ('FGD' for
the sake of brevity) by the contractor to NLC
pursuant to a tender floated by NLC. Contractor
was the successful bidder, contractor was given a
Letter of Award dated 31.08.2019 followed by a
contract dated 06.03.2020 and a set of commercial
conditions. These three shall hereinafter
collectively be referred to as 'said contract' for the
sake of convenience and clarity. This Court is
informed that this Letter of Award dated
31.08.2019, contract dated 06.03.2020 and
commercial conditions together constitute the
contractual relationship between the contractor and
NLC for FGD. This Court is informed that FGD is for
two thermal power stations that are being set up
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by NLC in Neyveli. Vide said contract, time for
completion of first FGD is 30 months i.e., for first
Power Station and time of completion of the other
FGD i.e, for second Power Station is 36 months.
This Court is informed that the parties had agreed
that the effective date qua said contract is
31.08.2019. Thereafter, arbitrable disputes
erupted between the contractor and NLC, disputes
centre around delay and invocation of Force
Majeure clause. This shall collectively be referred
to as 'arbitrable dispute' for the sake of
convenience and this Court expresses no opinion
on the merits of the arbitrable disputes. What is of
significance is, there is no disputation or
disagreement between the parties that the
arbitration agreement between the parties, being
an arbitration agreement within the meaning of
Section 2(1)(b) read with Section 7 of A and C Act
is in the form of a clause in the said contract i.e.,
commercial conditions clause 10.33.3.5. There is
also no disputation or disagreement that contractor
issued a communication dated 29.09.2020, which
according to the contractor, is the trigger notice
qua arbitration. To be noted, this was preceded by
exchange of communications between the
contractor and NLC.
5. Learned counsel for NLC submits on
instructions that a reply to, what according to
contractor, is the aforementioned trigger notice,
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has been sent saying that it was premature in the
light of the language in which arbitration clause is
couched. However, it is clear that the applicant has
demonstrated manifest intention to arbitrate,
which is sine qua non for an application under
Section 9 of A and C Act.
6. Learned counsel for NLC, on instructions,
has now filed a memo dated 12.10.2020, which
reads as follows:
‘MEMO FILED ON BEHALF OF THE 1ST
RESPONDENT
It is respectfully submitted as
follows: -
1. On instructions, it is submitted though the
Arbitration Clause in the Contract contemplates
Three Member Tribunal, we are agreeable to
appointment of Single Member Tribunal for
adjudication of the disputes between the parties.
2. The Sole Arbitrator may be appointed by
this Hon’ble Court without reference to the
Arbitrator appointed by the Petitioner.
Dated at Madras on this the 12 th day of
October, 2020.
-Sd-
N.Nithianandam
Counsel for the 1st Respondent'
7. From the above memo, it becomes clear
that NLC consents for appointment of a sole
Arbitrator though the arbitration clause provides
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for an Arbitral Tribunal to be constituted by three
Arbitrators. Learned counsel for contractor also
agrees to this course and this submission is
recorded. To be noted, learned counsel for NLC
submits that this departure notwithstanding its
reply and the mechanism in arbitration clause shall
not be quoted as a precedent. Both parties also, on
instructions, submit that this Court can proceed to
appoint a sole Arbitrator at its discretion as there is
no disputation about the existence of an arbitration
agreement between the parties.
8. In the light of the trajectory which this
matter has taken and in the light of the curves
which this matter has taken in reaching this Court
vide captioned application, this Court, noticing that
there is no disputation about the existence of
arbitration agreement and parties agree for
appointment of a sole Arbitrator, though arbitration
agreement provides for appointment of three
member Arbitral Tribunal and more importantly,
the parties have left the choice of sole Arbitrator to
this Court, now proceeds to dispose of captioned
application inter alia by appointing a sole
Arbitrator. It is made clear that this Course is
adopted owing to the peculiar facts of this case and
peculiar trajectory this matter has taken and
therefore, this order will not serve as a precedent
in times to come.
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9. Before this Court does so and before this
Court appoints an Arbitrator, it is necessary to deal
with the interim prayer that has been sought for
inter alia under Section 9 of the A and C Act. As
already alluded to supra, as the applicant has
demonstrated manifest intention to arbitrate, this
application is entertained, this Court notices that
the applicant had the benefit of an interim order
from 09.09.2020 to date and therefore, this Court
deems it appropriate to continue the interim order.
In doing so, this Court has noticed that the interim
prayer pertains to invocation and encashment of
PBG. Prima facie case has been made out as
manifest intention to arbitrate has been
demonstrated. Balance of convenience also is in
favour of acceding to this request as invocation/
encashment of PBG pending arbitration will
tantamount to putting the cart before the horse.
Irreparable legal injury determinant also buttresses
the grant/continuation of interim order as this
Court notices that PBG is for 10% of the value of
the said contract, performance of which now forms
part of arbitrable dispute.
10. Another factor, which has weighed in the
minds of this Court, is that there is no disputation
that PBG is valid till 2023. Counsel for contractor/
applicant submits that PBG will be kept alive not
only till 2023, but for a period of 30 days post
receipt of final award by both parties in the arbitral
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proceedings. This submission is recorded. To be
noted, under normal circumstances, this Court
would have relegated the parties to move Hon'ble
Arbitrator under section 17 of A and C Act for the
interim prayer to be decided on merits by Hon'ble
Arbitrator, but in this case, owing to the
undertaking on the part of the contractor to keep
the PBG alive not only till 2023, but for a further
period of 30 days post receipt of final award to be
made by Hon'ble Arbitrator, in response to which
learned counsel for NLC consenting that the interim
order as prayed for in captioned application can
operate till the end of arbitral proceedings, this
Court is disposing of captioned application on the
terms to be set out infra. However, considering the
facts and circumstances, this Court deems it
appropriate to leave it open to the parties to move
the AT under Section 17 of the A and C Act even
with regard to this order and undertaking, if the
need arises. If such a situation arises, such an
application under Section 17 of A and C Act,
though obvious, will be dealt with by Hon'ble
Arbitral Tribunal on its own merits and in
accordance with law.
11. Learned counsel for NLC submits that
original PBG bearing No.002BG01193540001 dated
20.12.2019 as amended on 16.01.2020 and valid
upto 30.11.2023 for an amount of
Rs.55,65,00,000/- issued by the second
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respondent has been submitted to the second
respondent Bank. In the light of this order, the
second respondent Yes Bank is directed to return
the original PBG to first respondent NLC within a
fortnight from the date of receipt of a copy of this
order by the second respondent.
12. As this application is disposed of at the
first listing stage, learned counsel on record on
both sides shall communicate this order to the
second respondent for due compliance in all
aspects of the matter.
13. Though obvious it is made clear that all
questions are left open to be decided by Hon'ble
Arbitral Tribunal.
14. The following order is passed:
a) An interim order as prayed for in the
captioned application is granted and the same shall
operate till the award is passed by Hon'ble Sole
Arbitrator.
b) It is open to the parties to move the
Hon'ble Arbitrator under section 17 of The
Arbitration and Conciliation Act, 1996 (Act 26 of
1996), if the need arises for any relief including
anything touching upon or pertaining to order
granted in captioned application. If this scenario
unfurls, Hon'ble Arbitrator will decide the
application under section 17 of A and C Act on its
own merits without being impeded in any manner
by this order.
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c) Hon'ble Mrs.Justice R.Banumathi (Retd.),
former Judge of Hon'ble Supreme Court of India at
No.C20, Ground Floor, Defence Colony, New Delhi-
110 024, (Mob:7042955477, e-mail:
[email protected]) is appointed as sole
Arbitrator to enter upon reference, adjudicate and
pass an award in the arbitrable disputes between
applicant China Datang Technologies & Engineering
Co. Ltd., (applicant) and first respondent NLC India
Limited vide said contract, constituted by Letter of
Award dated 31.08.2019, contract dated
06.03.2020 and commercial contract;
d) Hon'ble Arbitrator is free to fix fees at the
discretion of Hon'ble Arbitrator;
e) The arbitral sitting/s being physical
hearing or virtual hearings shall also be at the sole
discretion of the Hon'ble Arbitrator.”
(vii) Pursuant to the said order dated 12.10.2020, the dispute
was referred to the learned Arbitrator appointed by this Court.
(viii) The claimant raised 11 claims in the claim statement filed
before the learned Arbitrator for a total sum of Rs.1,46,21,88,711.20.
On the contrary, apart from denying the liability, the respondent raised
a counter claim for a sum of Rs.91,45,45,152/- against the claimant.
(ix) Ultimately, the learned Arbitrator concluded that the claimant
would not be entitled to any of the claims except claims IV and V and
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further rendered a finding that the respondent would be entitled to
invoke the contract performance guarantee to the tune of
Rs.55,65,00,000/-. The respondent was directed to pay a total sum of
Rs.5.10 Crores to the claimant towards claims IV and V within a period
of four months from the date of the award, failing which, it was further
directed that it would carry simple interest at the rate of 6% per
annum till the date of realization of the amount. The learned Arbitrator
also rejected the other claims made by the claimant and the counter
claim made by the respondent.
(x) Aggrieved by that portion of the award to the extent of
rejecting some of the claims and the counter claim respectively, both
the claimant as well as the respondent have approached this Court by
filing the above petitions.
5. When these petitions came up for final hearing on
05.11.2025, this Court raised a preliminary objection and passed the
following order:
“This Court heard the learned Senior Counsel
appearing on behalf of the petitioners and the
learned Additional Solicitor General appearing on
behalf of the respondents.
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2. There is no dispute with regard to the fact
that the case in hand is an International
Commercial Arbitration wherein, one of the party is
a foreign entity. Under normal circumstances, for
appointment of Arbitrator, the parties will have to
approach the Apex Court under Section 11(6) of
the Arbitration and Conciliation Act, 1996 and it is
only the Apex Court which has the exclusive
jurisdiction of appointing an Arbitral Tribunal
insofar as the International Arbitration is
concerned.
3. In the case in hand, the petitioner filed an
application in O.A.No.493 of 2020 under Section 9
of the Act. In the course of the proceedings, it
seems, both sides consented for appointment of a
Sole Arbitrator. Based on the same, this Court
appointed a Sole Arbitrator. The matter was
thereafter referred to the Sole Arbitrator. The Sole
Arbitrator has passed an Award and for those
claims which were disallowed, the petitioner has
filed O.P.No.141 of 2023. For those claims which
were allowed and for the rejection of the counter
claim, the NLC India Limited has filed O.P.No.333
of 2023.
4. In the course of arguments, this Court
entertained a doubt as to whether an Arbitrator
could have been appointed by this Court in an
International Commercial Arbitration and whether
the Award passed by the Sole Arbitrator suffers
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from fundamental lack of jurisdiction. This issue
was not raised by both sides, since the Arbitrator
was appointed based on the consent given by both
sides. This Court is raising this issue since even if
the parties consent for the appointment of the
Arbitrator, the Court must be vested with the
jurisdiction to pass an order. If the Court does not
have the jurisdiction, the fundamental question
would be as to whether the parties can confer a
jurisdiction to the Court, which is not available
under the Arbitration and Conciliation Act, 1996.
5. In view of the above, before dealing with
the case on its merits, this Court wants to first
address the jurisdictional issue. Hence, this Court
requested the learned Senior Counsel appearing for
the private party and the learned Additional
Solicitor General appearing for NLC to assist this
Court to arrive at a conclusion.
6. Post these petitions under the caption
'Part Heard Cases' on 19.11.2025 at 2.15 p.m.”
6. On 05.11.2025, this Court directed the learned Senior Counsel
appearing on behalf of the claimant and the learned Additional Solicitor
General appearing on behalf of the respondent to assist this Court on
the preliminary objection that was raised by this Court itself.
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7. It must be made clear that both sides did not raise any
preliminary objection regarding the jurisdiction of the learned
Arbitrator to hear and decide the dispute since a learned Single Judge
of this Court appointed the learned Arbitrator only after getting the
consent from both sides. Therefore, obviously, both sides did not
question the jurisdiction of the learned Arbitrator and it was this Court,
which entertained this fundamental doubt and wanted to hear from
both sides, take a decision at the outset and thereafter hear them on
merits depending upon the decision to be taken by this Court on the
preliminary objection regarding the jurisdiction of the learned
Arbitrator to decide the dispute.
8. (a) The learned Senior Counsel appearing on behalf of the
claimant brought to the notice of this Court the following judgments:
(i) of a learned Single Judge of the
Bombay High Court in Roptonal Ltd. Vs.
Anees Bazmee [reported in 2016 SCC
OnLine Bombay 3555];
(ii) of the Hon'ble Apex Court in Amway
India Enterprises (P) Ltd. Vs.
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Ravindranath Rao Sindhia [reported in
2021 (8) SCC 465];
(iii) of another learned Single Judge of
the Bombay High Court in Adani Enterprises
Ltd. Vs. Antikeros Shipping Corporation
[reported in 2019 SCC OnLine Bombay
528];
(iv) of the Hon'ble Apex Court in
Hindustan Zinc Ltd. Vs. Ajmer Vidyut
Vitran Nigam Ltd. [reported in 2019 (17)
SCC 82]; and
(v) of one more learned Single Judge of
the Bombay High Court in Aqua Labour Asia
Pacific Ltd. Vs. Arihant Ship Breaters
[reported in 2024 SCC OnLine Bombay
3556].
(b) The learned Senior Counsel appearing on behalf of the
claimant also brought to the notice of this Court the order dated
19.3.2024 passed by another learned Single Judge of this Court in
respect of the same parties in Arbitration O.P. (Com.Div.) No.222
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of 2023. It was a petition that was moved by the respondent under
Section 11(6) of the Act pursuant to the same contract for
appointment of an arbitrator based on the earlier order dated
12.10.2020 passed by this Court in O.A.No.493 of 2020. The said
original petition was dismissed by order dated 19.3.2024 on the
ground that a petition would lie only before the Hon’ble Apex Court
and further, liberty was granted to the respondent to approach the
Hon’ble Supreme Court. The said order was not interfered by the
Hon’ble Apex Court in a special leave petition that was filed by the
respondent against the claimant. Further, by order dated 31.10.2025
in Arbitration Petition No.69 of 2024 filed by the respondent against
the claimant, this Court has been requested to decide the pending
petitions filed under Section 34 of the Act expeditiously.
(c) The learned Senior Counsel appearing on behalf of the
claimant, by relying upon the above judgments, made the following
submissions:
(1) The consent given by the parties for appointment of the
learned Arbitrator does not confer any jurisdiction upon this Court to
bind the learned Arbitrator in a case involving international commercial
arbitration. Sub-Section (6) or (9) of Section 11 of the Act is not
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derogable and the question of waiver under Section 4 of the Act does
not arise.
(2) There was inherent lack of jurisdiction for this Court to
appoint the learned Arbitrator and the jurisdiction cannot be conferred
by the parties, enabling this Court to appoint the learned arbitrator in
an international commercial arbitration. The order dated 12.10.2020
passed by this Court is non-est in the eye of law. Therefore, whatever
had taken place thereafter pursuant to the order dated 12.10.2020
passed by this Court also will have to be treated as non-est and lack of
jurisdiction cannot be ratified at a subsequent point of time since it
goes to the root of the matter.
(3) Section 34(2)(a)(v) of the Act provides for interference with
the arbitral award where the composition of the Arbitral Tribunal was
not in accordance with the agreement between the parties or where
such agreement was not in accordance with this part (Part I).
(4) Even if an extreme view is taken to the effect that there was
agreement between the parties to bind the learned Arbitrator, such an
agreement will not be in accordance with Part I since, in a case
involving international commercial arbitration, it is only the Hon’ble
Apex Court, which can appoint an arbitral tribunal.
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9. (a) Per contra, the learned Additional Solicitor General
appearing on behalf of the respondent relied upon the following
judgments:
(i) of the Hon'ble Apex Court in
Pandurang Vs. State of Maharashtra
[reported in 1986 (4) SCC 436];
(ii) of the Hon'ble Apex Court in State of
Gujarat Vs. Savitri Devi [reported in 1996
(1) SCC 558];
(iii) of the Hon'ble Apex Court in
M.P.Housing & Infrastructure
Development Board Vs. K.P.Dwivedi
[reported in 2022 (3) SCC 783];
(iv) of a learned Single Judge of the
Kerala High Court in Fins Engineers and
Contractors P.Ltd. rep.by its Managing
Director Vs. State of Kerala rep. by the
Superintending Engineer [reported in
2024 SCC OnLine Kerala 4702]; and
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(v) of a learned Single Judge of the Delhi
High Court in Hala Kamel Zabal Vs. Arya
Trading Ltd. [reported in 2024 SCC
OnLine Delhi 5604].
(b) By relying upon the above judgments, the learned Additional
Solicitor General appearing on behalf of the respondent submitted as
follows:
(1) The sole Arbitrator was appointed based on the consent
given by the parties in an application that was filed under Section 9 of
the Act.
(2) If such appointment had taken place pursuant to the
application filed under Section 11 of the Act, then, obviously, lack of
jurisdiction can be taken as a ground. However, there was an
agreement between the parties by means of consent expressed by
both parties, which was in line with the provisions of Section 7 of the
Act and the same was acted upon by the learned Single Judge of this
Court and the learned Arbitrator was appointed. Therefore, it cannot
be said that the Court lacked jurisdiction.
(3) Consequently, the ground of waiver and acquiescence will
stare at the parties, if they raise the issue of jurisdiction after having
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participated in the arbitral proceedings. The jurisdiction of the learned
Arbitrator was not questioned under Section 16 of the Act and the
parties, having not raised the issue of jurisdiction before the learned
Arbitrator, cannot raise the said issue before the Court, which is
dealing with the award in a petition filed under Section 34 of the Act.
10. This Court has carefully considered the rival submissions.
11. Section 2(1)(f) of the Act reads as follows:
“(f) ‘international commercial arbitration’
means an arbitration relating to disputes arising
out of legal relationships, whether contractual or
not, considered as commercial under the law in
force in India and where at least one of the parties
is—
(i) an individual who is a national of, or
habitually resident in, any country other than
India; or
(ii) a body corporate which is incorporated in
any country other than India; or
(iii) an association or a body of individuals
whose central management and control is
exercised in any country other than India; or
(iv) the Government of a foreign country.”
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12. Section 2(1)(f) of the Act makes it clear that whatever be
the transaction between the parties, if it happens to be entered into
between persons, at least, one of whom is either a foreign national or
habitually a resident in any country other than India or by a body
corporate, which is incorporated in any country other than India or by
the Government of a foreign country, the arbitration becomes an
international commercial arbitration notwithstanding the fact that the
individual, body corporate or Government of a foreign country referred
to in Section 2(1)(f) of the Act carries on business in India through a
business office in India.
13. It is not in dispute that the claimant – M/s.China Datang
Technologies and Engineering Company Limited is an entity
incorporated under the laws of the People’s Republic of China. The
dispute would, therefore, qualify as an international commercial
arbitration within the meaning of Section 2(1)(f) of the Act.
14. Section 11 of the Act, in so far as it is material, reads as
follows:
“11. Appointment of arbitrators. –
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(1)……..
(2) Subject to sub-section (6), the parties
are free to agree on a procedure for appointing the
arbitrator or arbitrators.
(3) Failing any agreement referred to in sub-
section (2), in an arbitration with three arbitrators,
each party shall appoint one arbitrator, and the
two appointed arbitrators shall appoint the third
arbitrator who shall act as the presiding arbitrator
(4) If the appointment procedure in Sub-
Section (3) applies and-
(a) A party fails to appoint an arbitrator
within thirty days from the receipt of a request to
do so from the other party; or
(b) The two appointed arbitrators fail to
agree on the third arbitrator within thirty days from
the date of their appointment,
The appointment shall be made, upon
request of a party, by the Chief Justice or any
person or institution designated by him.
………….
(6) Where, under an appointment procedure
agreed upon by the parties, -
(a) A party fails to act as required under that
procedure; or
(b) The parties, or the two appointed
arbitrators, fail to reach an agreement expected of
them under that procedure; or
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(c) A person, including an institution, fails to
perform any function entrusted to him or it under
that procedure
A party may request the Chief Justice or any
person or institution designated by him to take the
necessary measure, unless the agreement on the
appointment procedure provides other means for
securing the appointment.
……..
(12) (a) Where the matters referred to in
Sub-Sections (4), (5), (6), (7), (8) and Sub-
Section (10) arise in an international commercial
arbitration, the reference to the “Supreme Court
or, as the case may be, the High Court” in those
sub-sections shall be construed as a reference to
the “Supreme Court”; and
(b) Where the matters referred to in Sub-
Sections (4), (5), (6), (7), (8) and sub-section (10)
arise in any other arbitration, the reference to “the
Supreme Court or, as the case may be, the High
Court” in those Sub-Sections shall be construed as
a reference to the “High Court” within whose local
limits the principal Civil Court referred to in Clause
(e) of Sub-Section (1) of Section 2 is situate, and
where the High Court itself is the Court referred to
in that clause, to that High Court.”
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15. A careful reading of the above provisions makes it
abundantly clear that the power to appoint an Arbitrator in an
international commercial arbitration lies exclusively with the Hon'ble
Supreme Court under Sub-Section (6) of Section 11 read with Sub-
Section (12)(a) of Section 11 of the said Act.
16. In the case in hand, the claimant filed O.A.No.493 of 2020
before this Court under Section 9 of the Act against the respondent
and another seeking for interim protection. During the pendency of the
said application, a learned Single Judge of this Court took into
consideration the fact that there was no disputation about the
existence of an arbitration agreement and that the parties, under the
Act, had agreed for appointment of the learned Arbitrator even though
the arbitration agreement provided for a three-member arbitral
tribunal. Thereafter, the learned Single Judge proceeded to exercise
his powers to appoint the learned Arbitrator to enter upon a reference,
adjudicate and pass an award.
17. It must immediately be noticed that this is not a case where
the appointment was made pursuant to a consensus made by parties
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constituting a separate agreement under Section 7 and the Court was
merely recording the same. On a reading of the order passed in O.A.
No.493 of 2020 dated 12.10.2020 it is clear that the actual
appointment was made by this Court, which is evident from the
following words “…….is appointed as sole Arbitrator to enter
upon reference, adjudicate and pass an award in the arbitrable
disputes” used in paragraph 14(c) of the order of the learned Single
Judge.
18. In the aforesaid backdrop, two seminal questions arise for
consideration:
(a) Whether the Commercial Division of the High Court can
appoint an Arbitrator in an international commercial arbitration? and
(b) If the High Court does not possess jurisdiction to appoint an
Arbitrator in an international commercial arbitration, what is the effect
of an award rendered by an Arbitral Tribunal constituted pursuant to
such an order?
19. The answer to the first question is no longer res integra. In
TATA Sons (P) Ltd. Vs. Siva Industries & Holdings Ltd.
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[reported in 2023 (5) SCC 421], the Hon’ble Supreme Court
observed:
“The Supreme Court had exclusive
jurisdiction to entertain the arbitration petition
since the proposed arbitration between the
applicant and the respondents, of whom the
second respondent is a foreign party, was an
international commercial arbitration in terms of
Section 2(1)(f) of the Arbitration Act.”“reme Court
had exclusive jurisdiction
20. Once it has been held that the jurisdiction of the Hon’ble
Supreme Court under Section 11, in an international commercial
arbitration, is exclusive in character, it must necessarily follow that no
other Court can exercise the said power. This is because the
conferment of “exclusive jurisdiction” rules out the vesting of power
with any other Court except the Hon’ble Supreme Court.
21. In Roptonal Ltd, a learned Single Judge of the Bombay High
Court had proceeded to appoint an arbitrator in an international
commercial arbitration. This order was later recalled by the High Court
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when the arbitration process had already commenced and was
underway. The High Court observed thus:
“42. In my view, since one of the parties to
the arbitration agreement was admittedly
incorporated outside India, the arbitration being
“international commercial arbitration” within the
meaning of section 2(1)(f) of the Arbitration Act,
the application for appointment of an arbitrator in
case of any breach of the agreed procedure for
appointment of an arbitrator could be filed only
before the Chief Justice of India under section
11(9) when the said arbitration application (97 of
2013) came to be filed and not before the Chief
Justice of this court. In my view in the facts of this
case, only the Chief Justice of India or his
designate could appoint an arbitrator under section
11(9) of the Arbitration Act and not Chief Justice of
this court or his designate. None of the party
brought these facts to the notice of the learned
designate of the Chief Justice when the said order
dated 12th June, 2014 was passed by the learned
designate but they gave consent insofar as name
of the learned arbitrator is concerned.
43. In my view even by consent of parties,
the learned designate of the Chief Justice of this
court could not have appointed an arbitrator under
section 11(6) of the Arbitration Act in view of the
arbitration being “international commercial
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arbitration” within the meaning of section 2(1)(f) of
the Arbitration Act. In my view, the said order
dated 12th June, 2014 passed by the learned
designate of the Chief Justice suffered from
inherent lack of jurisdiction and thus can be
recalled by the learned designate of the Chief
Justice of this court by exercising powers to have
procedural review permissible under Article 215 of
the Constitution of India.”
22. The matter was carried on appeal to the Hon’ble Supreme
Court in Anees Bazmee Vs. Roptonal Ltd. [reported in 2018 SCC
Online SC 3945]. The appeal was disposed by the Court as under:
“7. In the peculiar facts of the present case,
since the arbitration proceedings had gone ahead
before the Arbitrator and since there is no
objection either to the name of the Arbitrator or to
the conduct of the proceedings, in exercise of our
power, we declare that the same Arbitrator
shall continue to be the Arbitrator in the
proceedings. We must, however, observe that the
arbitration so conducted shall be an “International
Commercial Arbitration” and if any exigency
arises, the Court in question shall be this
Court and not the High Court. Rest of the
aspects shall continue to be in terms of the
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arbitration agreement entered into between the
parties.
8. Since almost two years have elapsed after
the parties had exchanged pleadings, we give
liberty to the parties to file additional documents/
pleadings or to effect amendments to the existing
pleadings in six weeks from today. The parties
shall appear before the Arbitrator on 23.10.2018.
In case the date in question is not suitable, the
Arbitrator may fix such appropriate date as he
thinks fit. All contentions of the parties are kept
open.
9. The order passed by the High Court is
thus modified to the aforementioned extent and
the appeal is disposed of in aforesaid terms.”
23. The aforesaid decision makes it clear that the Hon’ble
Supreme Court had validated the order of appointment by exercising
its power and had also made it clear that the appropriate court in case
of any further exigency would be the Hon'ble Supreme Court and not
the High Court. Thus, it is evident that the Hon'ble Supreme Court had
approved the legal position, as set out by the Bombay High Court, that
an order of appointment made by the High Court in an international
commercial arbitration would suffer from an inherent lack of
jurisdiction.
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24. The Hon’ble Supreme Court reached the same conclusion in
Amway (India) Enterprises (P) Ltd., which was a case where the
Delhi High Court had appointed a sole arbitrator in an international
commercial arbitration by exercising powers under Section 11. Setting
aside the order, the Hon’ble Supreme Court observed:
“16. In this view of the matter, the
argument that there is no international flavour to
the transaction between the parties has no legs to
stand on. Indeed, an analysis of Section 2(1)(f)
would show that whatever be the transaction
between the parties, if it happens to be entered
into between persons, at least one of whom is
either a foreign national, or habitually resident in,
any country other than India; or by a body
corporate which is incorporated in any country
other than India; or by the Government of a
foreign country, the arbitration becomes an
international commercial arbitration
notwithstanding the fact that the individual, body
corporate, or government of a foreign country
referred to in Section 2(1)(f) carry on business in
India through a business office in India. This
being the case, it is clear that the Delhi High
Court had no jurisdiction to appoint an
arbitrator in the facts of this case.”
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25. The aforesaid decisions make it clear that the High Court
would have no jurisdiction to appoint an Arbitrator in an international
commercial arbitration as the said power is within the exclusive
jurisdiction of the Hon'ble Supreme Court. Resultantly, an order of the
High Court, which purports to appoint an Arbitrator in an international
commercial arbitration, would suffer from a complete lack of inherent
jurisdiction and would be a nullity in law.
26. This now takes us to the next question. What is the effect of
an award rendered by an Arbitral Tribunal constituted pursuant to an
order of the High Court, which suffered from an inherent lack of
jurisdiction?
l Tribunal was not challenged under Section 16, the same
27. The learned Additional Solicitor General contended that the
award passed by the Arbitrator cannot be assailed on the ground of
want of jurisdiction since the appointment was made only by consent
with the result that waiver and estoppel would prevent the claimant
from challenging the jurisdiction of the Tribunal. It was also pointed
out that since the jurisdiction of the Tribunal was not challenged under
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Section 16 the same could not be challenged in a petition under
Section 34.
28. Taking up the last contention of the learned Additional
Solicitor first, the argument that the issue of jurisdiction cannot be
raised in a petition filed under Section 34, when the same was not
raised before the Tribunal under Section 16, does not really cut ice. As
a matter of fact, in MSP Infrastructure Ltd. Vs. M.P.Road
Development Corporation Ltd. [reported in 2015 (13) SCC 713],
a Two-Judges Bench of the Hon’ble Supreme Court had initially taken
the view, which is now sought to be canvassed by the learned
Additional Solicitor General. In that case, it was held thus:
“13. ..........Simply put, there is a prohibition
on the party from raising a plea that the tribunal
does not have jurisdiction after the party has
submitted its statement of defence. The intention
is very clear. So is the mischief that it seeks to
prevent. This provision disables a party from
petitioning a tribunal to challenge its jurisdiction
belatedly, having submitted to the jurisdiction of
the tribunal, filed the statement of defence, led
evidence, made arguments and ultimately
challenged the award under Section 34 of the
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Arbitration Act, 1996. This is exactly what has been
done by the respondent Corporation. They did not
raise the question of jurisdiction at any stage. They
did not raise it in their statement of defence; they
did not raise it at any time before the tribunal;
they suffered the award; they preferred a petition
under Section 34 and after two years raised the
question of jurisdiction of the tribunal. In our view,
the mandate of Section 34 clearly prohibits such a
cause. A party is bound, by virtue of sub-section
(2) of Section 16, to raise any objection it may
have to the jurisdiction of the tribunal before or at
the time of submission of its statement of defence,
and at any time thereafter it is expressly
prohibited. Suddenly, it cannot raise the question
after it has submitted to the jurisdiction of the
tribunal and invited an unfavourable award. It
would be quite undesirable to allow arbitrations to
proceed in the same manner as civil suits with all
the well-known drawbacks of delay and endless
objections even after the passing of a decree.
14. Shri Divan, the learned Senior Counsel
for the respondent vehemently submitted that a
party is entitled under the law to raise an objection
at any stage as to the absence of jurisdiction of the
court which decided the matter, since the order of
such a court is a nullity. It is not necessary to refer
to the long line of cases in this regard since, that is
the law. But, it must be remembered that this
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position of law has been well settled in relation to
civil disputes in courts and not in relation to
arbitrations under the Arbitration Act, 1996.
Parliament has the undoubted power to enact a
special rule of law to deal with arbitrations and in
fact, has done so. Parliament, in its wisdom, must
be deemed to have had knowledge of the entire
existing law on the subject and if it chose to enact
a provision contrary to the general law on the
subject, its wisdom cannot be doubted. In the
circumstances, we reject the submission on behalf
of the respondent.”
29. This decision was, however, expressly cited and overruled by
a Three-Judges Bench in Lion Engineering Consultants Vs. State
of M.P. [reported in 2018 (16) SCC 758], wherein it was held
thus:
“4. We find merit in the contentions
raised on behalf of the State. We proceed on
the footing that the amendment being beyond
limitation is not to be allowed as the
amendment is not pressed. We do not see any
bar to plea of jurisdiction being raised by way
of an objection under Section 34 of the Act
even if no such objection was raised under
Section 16.”
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30. It follows that a plea of lack of inherent jurisdiction is open
for examination in a petition under Section 34 even though the same
may not have been raised before the Arbitrator under Section 16.
31. As a matter of fact, the Hon’ble Supreme Court, in
Hindustan Zinc Ltd., dealt with a case where an arbitrator was
appointed by the State Electricity Commission under Section 86(1)(f)
of the 2003 Act with the consent of the parties. Subsequently, the
arbitral award was challenged under Section 34 of the Act before a
Commercial Court and the Commercial Court's decision was challenged
in an appeal under Section 37 of the Act wherein it was held that the
State Electricity Commission had no jurisdiction to appoint the
arbitrator since Section 86(1)(f) referred to disputes only between
licensees and generating companies and not licensees and consumers.
When the matter reached the Hon’ble Supreme Court, the contention
raised was that the objection to jurisdiction could not have been raised
in a proceeding under Section 37 of the Act once the parties had
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consented to arbitration earlier. Rejecting this submission, Nariman,J
held thus:
“We are of the view that it is settled law
that if there is an inherent lack of jurisdiction,
the plea can be taken up at any stage and also
in collateral proceedings.”
32. This decision was subsequently followed in CGM (IPC), M.P.
Power Trading Co. Ltd. Vs. Narmada Equipments (P) Ltd.
[reported in 2021 (14) SCC 548].
33. Turning to the argument based on waiver, it is well settled
that waiver of parties cannot validate an order passed by a Court,
which had no inherent jurisdiction. In the decision in Vithalbhai (P)
Ltd. Vs. Union Bank of India [reported in 2005 (4) SCC 315], it
was held thus:
“No amount of waiver or consent can
confer jurisdiction on a court which it
inherently lacks or where none exists."
34. The position is the same in case where the order is sought to
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be validated through the consent of parties. In the decision in
Superintendent of Taxes, Dhubri Vs. Onkarmal Nathmal Trust
[reported in 1976 (1) SCC 766], it was held thus:
“A distinction arises between the provisions
which confer jurisdiction and provisions which
regulate procedure. Jurisdiction can neither be
waived nor created by consent.”
35. Thus, the consent of parties purportedly given to this Court
while passing the order dated 12.10.2020 appointing the learned
Arbitrator in an application under Section 9 cannot cure what is, on the
face of it, a clear case of inherent lack of jurisdiction as pointed out by
the Hon’ble Supreme Court in Harshad Chiman Lal Modi Vs. DLF
Universal Ltd. [reported in 2005 (7) SCC 791]:
“Where a court has no jurisdiction over
the subject-matter of the suit by reason of any
limitation imposed by statute, charter or
commission, it cannot take up the cause or
matter. An order passed by a court having no
jurisdiction is a nullity.”
36. It was, however, sought to be contended that the position
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under the Act namely the Arbitration and Conciliation Act, 1996 is
different in view of Section 4 of the Act. For proper appreciation,
Section 4 reads as follows:
“4. Waiver of right to object.—A party who
knows that—
(a) any provision of this Part from which the
parties may derogate, or
(b) any requirement under the arbitration
agreement, has not been complied with and yet
proceeds with the arbitration without stating his
objection to such non-compliance without undue
delay or, if a time limit is provided for stating that
objection, within that period of time, shall be
deemed to have waived his right to so object.”
37. Section 4 deals with waiver in two distinct contexts; they
are: (a) waiver of any provision in Part I, from which, the parties may
derogate or (b) any requirement under the agreement, from which,
the parties may derogate. This case falls within the net of Section 4(a)
and the question is whether the exclusive power of the Hon’ble
Supreme Court to appoint an arbitrator in an international commercial
arbitration can be waived by the consent/conduct of parties.
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38. The statutory power to appoint arbitrators is governed by
Section 11. Section 11(2) reads as follows:
“(2) Subject to Sub-Section (6), the parties
are free to agree on a procedure for appointing the
arbitrator or arbitrators.”
39. The aforesaid provision makes it clear that some free play
has been given to the parties in the context of “procedure” for
appointment of arbitrators. But, the same is subject to Section 11(6)
of the Act. This is an important caveat since Section 11(6) is the
repository of statutory power of the High Court to appoint an
Arbitrator, which, when read along with Section 11(12) in the context
of international commercial arbitration, must be construed to be the
Hon’ble Supreme Court. Thus, whatever else the parties may want to
tinker with in the context of procedure, Section 11(2) makes it clear
that the parties cannot prescribe a procedure, which derogates from
the power conferred on the High Court or the Hon'ble Supreme Court
under Section 11(6) of the Act. For instance, the parties cannot agree
that the power to appoint an Arbitrator will vest with a Munsif Court or
a District Court for that would amount to derogating from the power of
appointment stipulated in Section 11(6).
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40. Thus, the Act itself makes it clear that the freedom given to
the parties to design their own procedure for arbitration cannot extend
to tinkering with the statutory power of the Court under Section 11(6).
In other words, the power and jurisdiction conferred on the High Court
or the Hon'ble Supreme Court under Section 11(6) is non-derogable.
41. In the decision in Soham Shah Vs. Indian Film Company
Ltd. [reported in 2016 SCC OnLine Bom 147 : (2016) 3 Mah LJ
476], a learned Single Judge of the Bombay High Court took a similar
view wherein it was held thus :
“8. Under Section 11(9) of the Arbitration
and Conciliation Act, 1996, if any application for
appointment of a sole or third arbitrator is required
to be made in any international commercial
arbitration, the Chief Justice of India or the person
or institution designated by him only is empowered
to appoint an arbitrator of a nationality other than
the nationalities of the parties where the parties
belong to different nationalities. The power of the
Chief Justice of High Court under Section 11(6) of
the Arbitration and Conciliation Act, 1996 can be
exercised only in case of a domestic arbitration.
Admittedly, one of the parties to the arbitration
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agreement was a body incorporated in the country
other than India. The arbitration relating to
disputes between such two parties would fall within
the definition of the international commercial
arbitration defined under Section 2(1)(f) of the
Arbitration and Conciliation Act, 1996. In my view
the learned designate of the Hon'ble Chief Justice
of this Court thus has no jurisdiction to appoint an
arbitrator in the facts of this case.
9. In my view even if the party did not bring
these facts to the notice of the learned designate
of the Hon'ble Chief Justice when application under
Section 11 of the Arbitration Act was heard, even
by consent of parties, the learned designate of the
Chief Justice of this Court could not have appointed
an arbitrator in case of international commercial
arbitration. The question of waiver will thus not
apply to the facts of this case in view of there
being inherent lack of jurisdiction.
...........
11. Merely because review petitioner has not
raised any objection before the learned arbitrator
in the written statement, the order passed by the
learned designate which itself was without
jurisdiction which objection can not be derogable,
there would be no waiver under Section 4 of the
Arbitration and Conciliation Act, 1996.”
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42. It may also be mentioned that in the decision in Suresh
Shah Vs. TCS Ltd. [reported in 2024 SCC OnLine Delhi 8552], a
learned Single Judge of the Delhi High Court has held that the
jurisdiction of the Hon’ble Supreme Court in an international
commercial arbitration is non-derogable.
43. The matter may be looked at from another angle. The
concept of waiver applies in the context of a “right” of a party. As
pointed out by Sir John Romilly,M.R. in Vyvyan Vs. Vyvyan
[reported in (1861) 30 Beav 65, 74 : 54 ER 813, 817], ‘waiver
or acquiescence, like election, presupposes that the person to
be bound is fully cognizant of his rights and that being so, he
neglects to enforce them, or chooses one benefit instead of
another, either, but not both, of which he might claim.’ This
decision has been followed by the Hon’ble Supreme Court in Manak
Lal Vs. Prem Chand Singhvi [reported in AIR 1957 SC 425].
44. A party may consciously choose to waive a right, which he/
she possesses. However, that analogy will not apply when that matter
relates to the “jurisdiction” of the Court, which is essentially a matter
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concerning the “power” of the Court to take cognizance of a particular
dispute. The concept of waiver will not apply to a case of inherent lack
of jurisdiction as was pointed out by the Hon'ble Supreme Court in the
decision in Jagmittar Sain Bhagat Vs. Director, Health Services,
Haryana [reported in 2013 (10) SCC 136] wherein it was held as
under:
“Indisputably, it is a settled legal proposition
that conferment of jurisdiction is a legislative
function and it can neither be conferred with the
consent of the parties nor by a superior court, and
if the court passes a decree having no jurisdiction
over the matter, it would amount to nullity as the
matter goes to the root of the cause. Such an issue
can be raised at any stage of the proceedings. The
finding of a court or tribunal becomes irrelevant
and unenforceable/inexecutable once the forum is
found to have no jurisdiction. Similarly, if a
court/tribunal inherently lacks jurisdiction,
acquiescence of party equally should not be
permitted to perpetrate and perpetuate defeating
of the legislative animation. The court cannot
derive jurisdiction apart from the statute. In such
eventuality the doctrine of waiver also does not
apply. (Vide United Commercial Bank Ltd. v.
Workmen [1951 SCC 364 : AIR 1951 SC 230] , Nai
Bahu v. Lala Ramnarayan [(1978) 1 SCC 58 : AIR
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1978 SC 22] , Natraj Studios (P) Ltd. v. Navrang
Studios [(1981) 1 SCC 523] and Kondiba Dagadu
Kadam v. Savitribai Sopan Gujar [(1999) 3 SCC
722].”
45. Turning to the authorities cited by the learned Additional
Solicitor General, the decision of the Delhi High Court in Hala Kamel
Zabal is clearly distinguishable on facts. That was a case where the
agreement between parties clearly stipulated that the arbitrator would
be appointed by the Chief Justice of the Delhi High Court. On this
premise, it was held that the appointment did not violate Section
34(2)(a)(v) of the Act. This Court finds that though Amway India
Enterprises (P) Ltd., which also arose from the Delhi High Court,
was cited before the learned Single Judge, there was no reference to
the same in the discussions in the judgment.
46. The decision in Fins Engineers and Contractors P. Ltd.,
has no application to the facts of the present case. That was a case
where an order under Section 29-A was passed by the Kerala High
Court although the competent Court was the District Court,
Ernakulam, which was the jurisdictional Court under Section 29-A. The
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order extending time was consequently recalled by the High Court.
47. The decision in M.P.Housing and Infrastructure
Development Board did not arise out of an international commercial
arbitration and the issue of consent vis-à-vis the power of the Hon’ble
Supreme Court did not really fall for consideration in this decision.
48. After the impugned award was passed by the learned
Arbitrator on 09.11.2022, the respondent namely the said M/s.NLC
India Limited had filed Arb.O.P.(Com.Div) No.222 of 2023 before this
Court under Section 11(6) seeking to appoint the same Arbitrator to
decide one of the issues with respect to which, it had reserved liberty
in the first round. A learned Single Judge of this Court made a
reference to paragraph 87 of the statement of defence filed before the
Arbitral Tribunal, wherein the said M/s.NLC India Limited stated as
under:-
"87. Apart from the above undisputed facts
and due to the gross negligence and non-
performance of the contract, the respondent had
suffered innumerably. The claims arising out of risk
and cost would be known to the respondent after
materializing new domestic tender floated for the
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said works. As a result, the respondent with the
leave of this Hon'ble Tribunal reserves its right to
raise the said claims arises out of risk and costs as
when occurs and quantified the same. The cause of
action for the same is yet to arise. As such, the
Respondent is entitled to reserve the right for the
present.”
49. The learned Single Judge dismissed Arb.O.P.(Com.Div.) No.
222 of 2023 filed under Section 11(6) by order dated 19.3.2024
holding as under:
“22. The appointment of the learned
Arbitrator earlier vide order dated 12.10.2020 in
OA.No.493 of 2020 was in a proceedings initiated
by the respondent under Section 9. There, a
consent was given by the petitioner vide Memo
dated 12.10.2020, before the Court. Therefore, the
Court appointed the learned Arbitrator.
23. Thus it cannot mean, this Court is bound
to make an appointment under Section 11 of the
Act. The concession given by the petitioner at the
stage of Section 9 application filed by the
respondent would not confer jurisdiction of this
Court in the second round, especially when the
respondent is contesting the petition under Section
11 of the Arbitration and Conciliation Act, 1996.
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Arb.O.P.(Com.Div.) Nos.141
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24. Therefore, I am of the refraining from
making any observation on merits of the petition.
Suffice to state, that it is open for the petitioner to
move the Hon'ble Supreme Court under Section 11
of the Arbitration and Conciliation Act, 1996 for
appointment of the same Arbitrator to be the
Arbitrator. Although procedural, it cannot be
helped in view of the law under Section 11 of the
Arbitration and Conciliation Act, 1996.”. ot mean,
this Court is bound to make an i
50. Pursuant to this order, the NLC has filed a petition seeking
for appointment of arbitrator in Arbitration O.P.(Com.Div.) No.69 of
2024 under Section 11(6) before the Supreme Court. Thus, on their
own showing, the NLC cannot now be heard to say that the
jurisdictional court in the context of this case is the High Court and not
the Supreme Court.
51. In the decision in Indian Oil Corporation Ltd. Vs. Shree
Ganesh Petroleum [reported in 2022 (4) SCC 463], it was held
that an award could be set aside as being in conflict with the Public
Policy of India as provided in Section 34(2)(b)(ii) of the Act when it is
in patent contravention of any substantive law of India or in patent
breach of the Act.
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Arb.O.P.(Com.Div.) Nos.141
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52. In view of the above discussions, the only possible
conclusion is that the order of this Court dated 12.10.2020 passed in
O.A.No.493 of 2020 constituting the Arbitral Tribunal suffers from an
inherent lack of jurisdiction. Resultantly, the impugned award dated
09.11.2022 passed by such a Tribunal shall be a coram-non-judice and
a nullity in law.
53. In the result, both Arb.O.P.(Com.Div.) Nos.141 and 333 of
2023 are allowed. The impugned arbitral award dated 09.11.2022
passed by the learned Arbitrator is set aside in its entirety.
28.11.2025
Index : Yes
Neutral Citation : Yes
RS
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Arb.O.P.(Com.Div.) Nos.141
& 333 of 2023
N.ANAND VENKATESH,J
RS
Arb.O.P.(Com.Div.) Nos.141
& 333 of 2023
28.11.2025
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