Orissa High Court

M/S Raghul Construction vs Ntpc Ltd. And Another on 20 April, 2022

             IN THE HIGH COURT OF ORISSA AT CUTTACK

                              ARBA No.9 Of 2021
                            (Through hybrid mode)


        M/S Raghul Construction                   ....                   Appellant

                                                         Mr. G.M.Rath, Advocate

                                       -versus-

        NTPC Ltd. and another                     ....                Respondents

                                                       Mr. B.S.Tripathy, Advocate

                  CORAM: JUSTICE ARINDAM SINHA

                                  ORDER

20.04.2022 Order No.

06. 1. Mr. Rath, learned advocate appears on behalf of appellant and

on 11th April, 2022 had submitted, impugned order dated 24 th January,

2020, was made by the Court below in setting aside award dated 14 th

March, 2014. He submitted, two grounds were erroneously accepted

by said Court. First is that the arbitrator misconducted himself in

adjudicating the plea of respondents that his client's claims were

barred by limitation. Second is that there was objection raised by

respondents in taking technical assistance from a person of his client.

2. He had submitted, it will appear from the award that there was

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analysis made of, inter alia, clauses 52 and 56 of General Conditions

of Contract (GCC) for the arbitrator to conclude that his client had a

live claim. Clear provision in clause 52 was that upon preparation of

final bill, within six months thereafter, admitted amounts were to be

paid. His client had 90 days thereafter, to either accept the employer's

position on the disputed amounts or challenge the same for

adjudication in terms of the contract, by reference to arbitration. On

going through the evidence, the tribunal found that final bill had not

been prepared and hence, came to the conclusion.

3. Mr. Tripathy, learned advocate appears on behalf of

respondents and had earlier submitted that his client had put in

objection regarding the person, called to assist the arbitrator on

technical issues, thereafter being engaged by appellant to further its

case in the reference. Court had, by direction in order dated 11 th April,

2022, required appellant to file additional affidavit disclosing the

objection put in by respondent employer. The affidavit was filed and,

inter alia, the objection disclosed therein.

4. Today, Mr. Rath points out from disclosures in his client's

additional affidavit that there was no record in the reference to say the

person was appointed, called or required by the arbitrator to report on

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any issue. Instead, his client was required by the arbitrator to make

formal application regarding its intention to obtain assistance from the

person, in furthering its case. He submits further, it will appear from

relevant procedural orders that even though the person's appearances

were recorded as appearing on behalf of his client but, submissions

were made by managing partner of appellant. Hence, this objection

cannot be said to be one coming within or covered by section 13 in

Arbitration and Conciliation Act, 1996, to thereafter become a ground

of challenge to the award.

5. This ground, considered in impugned judgment dated 24 th

January, 2020 becomes a preliminary issue, to be decided first in the

appeal. Hence, respondent is to be heard on the point.

6. Mr. Tripathy, refers to objection dated 6th May, 2013, put in by

his client before the arbitrator. He points out from paragraph 2 in it

that there was clear statement, of the person having appeared on

request of the arbitrator in course of arbitral sitting held on 4th and 5th

August, 2012 and that upon request made by the arbitrator, parties had

furnished relevant documents to the person, for him to opine as an

expert in the next sitting to be held on 16th February, 2013. He then

refers to procedural order dated 16th February, 2013 to submit, upon

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appellant having submitted that the person would appear on its behalf,

the objection was made and noted by the arbitrator. In spite thereof, it

was not dealt with by the arbitrator on any order passed prior to or by

the award itself. He submits, in the circumstances, the Court below

correctly found in favour of his client, to say that the award deserved

to be set aside on that ground. Mr. Rath submits, procedural order

dated 5th August, 2012 stands disclosed in the additional affidavit and

it has no mention of the person, either in the record of appearance or in

the text. In the circumstances, the Court below could not have relied

upon submissions, made on this aspect, on behalf of respondents.

7. Paragraph 2 in objection dated 6th May, 2013, filed by

respondents, is reproduced below.

"So far as Mr. K.K. Vershney is concerned, he was an Ex-employee of NTPC Ltd. and Mr. Vershney was called by the Hon'ble Arbitrator to assist him on certain technical issues and such a course as adopted by the Hon'ble Arbitrator is permissible in terms of Section 26 of the Arbitration & Conciliation Act, 1996 and the course adopted by the Arbitrator was never objected to by the respondent and in fact Mr. Vershney had appeared on the request of the Arbitrator in course of the arbitral sitting held on 4th and 5th August 2012 and

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on the request of the Hon'ble Arbitrator the parties have furnished relevant documents to Mr. Vershney to have his say as an expert in the next arbitral sittings, which was held on 16.02.2013"

Mr. Rath points out that this objection was filed after conclusion of

hearing. Mr. Tripathy responds that by last procedural order dated 28 th

April, 2013, the tribunal had given opportunity and liberty for the

parties to file further written submission. The referred direction in

procedural order dated 28th April, 2013 is reproduced below.

"xx xx xx However, as last opportunity the parties have been given liberty to file their Written Submission, if so advised, within a month by exchanging copies thereof to each other"

8. At appellate stage, appellant's contention that the objection was

not covered by section 13 requires this Court to ascertain the facts.

Mr. Rath submits, the lower Court had examined one Mr. S.K.Rath,

Engineer (C), who had been appearing in the reference along with

learned advocate of respondents. Said person had deposed he had no

recollection regarding direction made by the arbitrator appointing the

person as an expert. A witness, when being examined and asked a

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question, replies lack of recollection, Court is likely to appreciate the

answer as, at best, evasive.

9. In the objection respondents have clearly stated that in course

of arbitral sitting held on 4th and 5th August, 2012, on request of the

arbitrator, parties had furnished relevant documents to the person, for

him to have his say as an expert in the next sitting held on 16 th

February, 2013. The objection was filed after conclusion of hearing

but before the award was made. The last opportunity and leave

granted to the parties to file written submission has been reproduced

above. In the circumstances, there ought to have been some reference

in the award to the objection, as it was filed with the arbitrator

pursuant to last opportunity/leave granted. In event the arbitrator was

inclined to reject the objection as not being a written submission, that

much should have been said in the award. Nothing was said is the

admitted position.

10. This brings us to procedural order dated 16th February, 2013.

Relevant paragraph therefrom is reproduced below.

"At the outset Mr. Gopinathan, Managing Partner of the Claimant has submitted that Mr. Vershney would appear for the Claimant as its'

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Technical Representative, for which he would file a petition to that effect in course of the next sitting. Mr. Tripathy, Advocate has vehemently objected saying that Mr. Vershney is called to assist the Arbitrator ion technical issues. The objection of Mr. Tripathy is taken note of."

11. On the objection raised by respondents having been noted by

the tribunal, there was omission on its part to deal with it. This

objection consisted of the statement that the person had been called to

assist the arbitrator on technical issues. The objection not having been

dealt with gives presumption that it could not be dealt with. The

person was allowed by the tribunal to be part of the team representing

appellant in the reference. The situation, as it unfolded, became one

for respondents to legitimately feel that it became aware of

circumstances that gave rise to justifiable doubts as to independence

or impartiality of the tribunal. Omission of the tribunal to deal with

the objection, by reference or otherwise in the award, is fatal to

appellant's contention that the person was never appointed, called or