Mahabir Prasad Agarwala vs . The State Of Meghalaya & Ors.
2022 Latest Caselaw 437 Meg

Serial No. 01     HIGH COURT OF MEGHALAYA
Regular List             AT SHILLONG


 Arb.P. No. 2 of 2022
                                                Date of order: 10.08.2022
 Mahabir Prasad Agarwala      vs.    The State of Meghalaya & ors.
 Coram:
       Hon'ble Mr. Justice Sanjib Banerjee, Chief Justice
 Appearance:
 For the Petitioner             : Mr. R. Hussain, Adv. with
                                  Ms. M.M. Shullai, Adv.
 For the Respondents            : Mr. S. Sahay, GA

 i)     Whether approved for                        Yes/No
        reporting in Law journals etc.:

 ii)    Whether approved for publication            Yes/No
        in press:

JUDGMENT: (per the Hon'ble, the Chief Justice) (Oral)

There is no denial that disputes and differences have arisen between the parties pertaining to an agreement dated January 7, 2013 for the construction of a major bridge over river Umiam including RCC culverts at various locations on the Mawlai-Umthlong-Nongpathaw Roads in the State. Clause 3 of the special conditions of contract is the arbitration agreement and such clause indicates that a similar arbitration agreement is to be found in Clause 25.3 of the general conditions of the contract.

2. By a notice dated February 14, 2020, the petitioner invoked the arbitration agreement, indicated the nature of the disputes and suggested

to the respondents that the person named in the letter be agreed upon as the sole arbitrator. The notice also went on to say that in the event there was no response, the nominee named should be taken to be the petitioner's nominee on the three-member arbitral panel as contemplated by the arbitration agreement.

3. It may be indicated here that Clause 3(a) of the special conditions of contract containing the arbitration agreement contemplates a sole arbitrator if so agreed upon; or, a panel of three arbitrators with one nominee from the either side and the two nominees to decide on the third or presiding arbitrator. The petitioner's invocation of the arbitration agreement and nomination as contained in the notice of February 14, 2020 is consistent with what is contemplated in the arbitration agreement.

4. However, the respondents refer to sub-clause (c) under Clause 3 of the said special conditions that requires the Council, Indian Road Congress to be approached in the event "one of the parties fails to appoint an arbitrator in pursuance of sub-clause (a) and (b) above within 30 days after receipt of the notice ...."

5. There is sufficient substance in the respondents' assertion. Since there is no dispute as to the validity of the arbitration agreement, the petitioner ought to have approached the Council, Indian Road Congress in terms of Clause 3(c) of the special conditions of the contract.

6. Accordingly, the petitioner is permitted to approach the Council, Indian Road Congress with a proper notice and a copy of this order appended thereto for the relevant authority to appoint an arbitrator to be deemed as the nominee of the respondents herein. The Council, Indian Road Congress will conduct such exercise without reference to the

respondents herein as the respondents have failed to act in accordance with sub-clauses (a) and (b) of Clause 3 of the said special conditions.

7. It is made clear that the Council, Indian Road Congress will have 30 days from the date of receipt of the petitioner's notice to appoint the arbitrator and for the petitioner's nominee and the arbitrator appointed by the Council, Indian Road Congress to decide on the third or the presiding arbitrator thereafter. In the event the Council, Indian Road Congress fails to make the appointment within the stipulated time, it will be open to the petitioner to take necessary steps, including under Section 11 of the Arbitration and Conciliation Act, 1996 afresh.

8. Arb.P. No. 2 of 2022 is disposed of. There will be no order as to

costs.

(Sanjib Banerjee) Chief Justice Meghalaya 10.08.2022 "Sylvana PS"