Arb. P. No.6/202 vs The State Of Tripura And Ors
2021 Latest Caselaw 801 Tri

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                         HIGH COURT OF TRIPURA
                                   AGARTALA

                                 Arb. P. No.6/2021
Sri Ashes Deb, Contractor.
                                                           ............. Petitioner(s).
                                        Vs.
The State of Tripura and Ors.
                                                          ............. Respondent(s).

For Petitioner(s) : Mr. Somik Deb, Sr. Advocate, Mr. Abir Baran, Advocate.

For Respondent(s) : Mr. K De, Addl. Govt. Advocate, Mr. H Sarkar, Advocate.

HON'BLE THE CHIEF JUSTICE MR. AKIL KURESHI _O_R_D_E_ R_

27/8/2021

The petitioner seeks appointment of an arbitrator to resolve disputes

between the petitioner-contractor and the respondents-Government

department arising out of the order number F.10(178)/EE/KD/2762-81 dated

6th January 2017.

Petitioner is a contractor and was awarded a work order by the

Government. During the course of execution of the work, disputes have arisen

between the parties. The contract undisputedly contained an arbitration

clause. The petitioner having issued a notice to the Government for Page - 2 of 6

appointment of an arbitrator and when such request was not accepted, has

filed this petition.

The respondents have appeared and filed reply mainly opposing the

different claims made by the petitioner as also the petitioner‟s averments on

merits of such claims. However, such affidavit does not contain any ground

for opposing the appointment of an arbitrator.

In the present petition for appointment of arbitrator under Section

11(6) of the Arbitration and Conciliation Act, 1996, the Court would not be

concerned with the merits or demerits of the claims of the petitioner which

would be the subject matter before the arbitrator when appointed. Only

inquiry before me would be whether the contract contains an arbitration

clause, whether arbitrable disputes have arisen and the petitioner has followed

the procedure provided under the Act before filing this petition for

appointment of an arbitrator. When answers to all these questions are in the

affirmative, there is a need for appointment of an arbitrator.

Considering facts of the case, I request Mr. S Sikdar, former

District Judge of Tripura, to act as a sole arbitrator to resolve disputes

between the parties arising out of the work order in question.

At this stage, learned senior counsel Mr. Somik Deb requested that

only the claims of the petitioner be referred for arbitration. He submitted that Page - 3 of 6

since it is the contractor who has filed this petition for appointment of an

arbitrator, only his disputes should be arbitrated. In other words, according to

him, Government counter-claims would be barred and that I should so clarify

in this order. In support of his request, he relied on the following decisions:

In case of M/s Punj Sons Pvt. Ltd. Vs. National Aluminium

Company Ltd. and Anr. reported in AIR 1999 SC 1547 in which I only find

that the defendant in an arbitration claim had first raised the counter-claim

without there being any reference. The arbitrator held a belief that the same

would not be maintainable. The remedy for the defendant would be to raise

independent arbitration and both arbitration proceedings can be heard

together. This view of the arbitrator was approved by the Supreme Court.

Counsel also relied on a decision in case of Booz Allen and

Hamilton INC. Vs. SBI Home Finance Limited and Ors. reported in (2011)

5 SCC 532 in which the Supreme Court in the context of the term

„arbitrability‟ observed that an element whether the parties have referred the

disputes to arbitration is also touching the question of the arbitrability. It was

observed that whether the disputes fall under the scope of submission to

arbitral tribunal or whether they do not arise out of statement of claim and

counter-claim filed before the arbitral tribunal would make them non-

arbitrable. This judgment again does not support the submission of the Page - 4 of 6

counsel for the petitioner that in a petition filed by the contractor for

appointment of an arbitrator, the counter-claim of the opponent must be

barred.

On the other hand, we may refer to two decisions of the Supreme

Court which, in my opinion, throw some light on the controversy raised by

the counsel for the petitioner.

In case of Selvi and Ors. Vs. State of Karnataka & Anr.., reported

in (2010) 2 SCC 581, the Court considered two different situations. Situation

(a) there "all disputes" are referred to the arbitrator and a situation (b) there

"specific disputes enumerated only" are referred to arbitration. It was held

that in situation (a), prior notice is not required when all disputes are referred

to arbitrator or are contemplated by the arbitration clause and the arbitrator is

empowered to decide all disputes raised in the proceedings i.e both the claims

and counter-claims, if all disputes are referred. It was observed that the

assumption that the arbitrator can decide only disputes raised by the applicant

under Section 11 application and not the counter-claims of the respondents, is

without basis.

In case of Voltas Ltd. Vs. Rolta India Ltd., reported in (2014) 4 SCC

516 the Supreme Court referring to and relying upon the decision in case of

Praveen Enterprises(supra) observed that general rule is that the date on Page - 5 of 6

which counter-claim is made by the respondent before the arbitrator will be

the date of its institution. However, this general rule would have an exception

where the respondent against whom a claim is made and had also made a

claim against the claimant and sought arbitration by serving a notice to the

claimant but subsequently raised such a claim as a counter-claim in the

arbitration proceedings which initiated by the claimant instead of filing

separate application under Section 11, then the limitation for such counter-

claim should be computed with reference to the date of service of notice of

such claim on the claimant and not with the reference to the date of filing of

the counter-claim before the arbitrator.

There is no statutory bar on allowing entertainment of a counter-

claim of the respondent by the arbitrator who is appointed in a petition under

Section 11(6) of the Act. The legal position emerging from the above two

decisions is that when an arbitrator is appointed under Section 11(6) of the

Act who is requested to decide all disputes, the arbitrator would be authorized

to decide the claim of the petitioner as well as the counter-claim of the

respondent, if so raised.

The contention of the senior counsel for the petitioner that the

arbitrator who is appointed under Section 11(6) of the Act on a petition filed

by the contractor is debarred from entertaining the counter-claim is thus not Page - 6 of 6

valid. There is neither any fetter on powers of the Court while making

appointment under Section 11(6) of the Act to require the arbitrator to decide

both the claims and the counter-claims. Nor, in facts, senior counsel for the

petitioner has made out any case for issuing any direction to the contrary.

While disposing of this petition, it is thus clarified that the arbitrator will be

authorized to entertain the petitioner‟s claim as well as the counter-claim of

the respondents raised, subject of course to all legal questions and opposition

by the petitioner.

Arbitration petition is disposed of accordingly. Pending

application(s), if any, also stands disposed of.

( AKIL KURESHI ), CJ

Sukhendu