Tripura High Court
Arb. P. No.9/202 vs The State Of Tripura And Ors on 22 December, 2021
Page - 1 of 6
HIGH COURT OF TRIPURA
AGARTALA
Arb. P. No.9/2021,
Arb. P. No.10/2021,
Arb. P. No.11/2021,
Arb. P. No.12/2021.
Sri Gathan Datta.
.............. Petitioner(s).
Vs.
The State of Tripura and Ors.
............... Respondent(s).
For Petitioner(s) : Mr. Somik Deb, Sr. Advocate,
Ms. Riya Chakraborty, Advocate.
For Respondent(s) : Mr. K De, Addl. Govt. Advocate.
HON'BLE THE CHIEF JUSTICE MR. INDRAJIT MAHANTY
_O_R_D_E_ R_
22/12/2021
Heard learned counsel for the parties.
The application has been filed before this Court under Section
11(6) of the Arbitration and Conciliation Act, 1996 seeking appointment of
an Arbitrator in terms of the arbitration clause contained in Clause 22 of the
agreement dated 22nd March 2019. The said clause is quoted hereunder :
"22. Settlement of disputes:
22.1 If any dispute or difference of any kind whatsoever
arises between the department and the Bidder in connection with,
Page - 2 of 6
or arising out of the Contract at stage, whether during the
progress of the works or after their completion and whether
before or after the termination, abandonment or breach of the
contract, it shall in the first place, be referred to and settled by
the Engineer-in-charge who shall, within a period of twenty days
after being requested by the Bidder to do so, give written notice
of his decision to the Bidder. Upon receipt of the written notice
of the decision of the Engineer-in-charge the Bidder shall
promptly proceed without delay to comply with such notice of
decision.
22.2 If the Engineer-in-charge fails to give notice of his
decision in writing within a period of twenty days after being
requested or if the Bidder is dissatisfied with the notice of the
decision of the Engineer-in-charge, the Bidder may within fifteen
days after receiving the notice of decision appeal to the
concerned Superintending Engineer of Department who shall
after affording opportunity of being heard shall give notice of his
decision within a period of thirty days. After Superintending
Engineer has given written notice of his decision to the Bidder
and no claim to arbitration, has been communicated to him by
the Bidder within a period of fifteen days from receipt of such
notice the said decision shall remain final and binding on both
side. If the superintending engineer fails to give notice of his
decision, as aforesaid within a period of thirty days after being
requested as aforesaid, or if the Bidder be dissatisfied with any
such decision, then and in any such case the Bidder within thirty
days after the expiration of the first named period of thirty days
as the case may be, require that the matter or matters in dispute
be referred to arbitration as detailed below :-
Page - 3 of 6
SETTLEMENT OF CLAIMS:
All disputes or difference arising of or relating to the
Contract shall be referred for the adjudication as follows:
a) Claims up to a value of Rupees 50,000/-
- Superintending Engineer of another circle in the
same department.
b) Claims above Rs.50,000/-
- Another Chief Engineer or Arbitrator appointed by
the Chief Engineer of the same department.
The arbitration shall be conducted in accordance with the
provisions of Indian Arbitration and Conciliation Act 1996 or
any statutory modification thereof.
The arbitrator shall state his reasons in passing the award.
A reference for adjudication under this clauses shall be
made by the Bidder within 180 (one hundred eighty) days from
the date of intimating the Bidder of the preparation of final bill
or his having accepted payment whichever is earlier. Only
contracts executed in Tripura shall have jurisdiction for any suit
arising out of this contract. More particularly no suit shall be
instituted or entertained in any court outside the state arising out
of contract."
Objections have come to be filed by the respondents. However, this
Court takes note of the fact that the Hon'ble Supreme Court in case of N. N.
Global Mercantile Private Ltd. Vs. Indo Unique Flame Ltd. and Ors.
reported in (2021) 4 SCC 379 in paragraph 5.2 had quoted from the 2015
Page - 4 of 6
amendments inserting sub-section 6-A in Section 11 and thereafter
concluded as follows :
"10. In view of the legislative mandate contained in Section
11(6-A), the Court is now required only to examine the existence
of the arbitration agreement. All other preliminary or threshold
issues are left to be decided by the arbitrator under Section 16,
which enshrines the kompetenz-kompetenz principle."
It is also relevant herein to take into consideration the fact that
Hon'ble the Supreme Court in the case of Perkins Eastman Architects DPC
and Ors. Vs. HSCC(India) Ltd. reported in AIR 2020 SC 59 has held as
follows :
"16. But, in our view that has to be the logical deduction from
TRF Limited MANU/SC/0755/2017: (2017) 8 SCC 377.
Paragraph 50 of the decision shows that this Court was
concerned with the issue, "whether the Managing Director, after
becoming ineligible by operation of law, is he still eligible to
nominate an Arbitrator" The ineligibility referred to therein, was
as a result of operation of law, in that a person having an interest
in the dispute or in the outcome or decision thereof, must not
only be ineligible to act as an arbitrator but must also not be
eligible to appoint anyone else as an arbitrator and that such
person cannot and should not have any role in charting out any
course to the dispute resolution by having the power to appoint
an arbitrator. The next sentences in the paragraph, further show
that cases where both the parties could nominate respective
arbitrators of their choice were found to be completely a
Page - 5 of 6
different situation. The reason is clear that whatever advantage a
party may derive by nominating an arbitrator of its choice would
get counter balanced by equal power with the other party. But, in
a case where only one party has a right to appoint a sole
arbitrator, its choice will always have an element of exclusivity
in determining or charting the course for dispute resolution.
Naturally, the person who has an interest in the outcome or
decision of the dispute must not have the power to appoint a sole
arbitrator. That has to be taken as the essence of the amendments
brought in by the Arbitration and Conciliation (Amendment)
Act, 2015 (Act 3 of 2016) and recognised by the decision of this
Court in TRF Limited."
In view of the aforesaid judgments cited hereinabove although the
appointing authority under the Clause of the agreement is vested with the
Chief Engineer, the said authority being obviously interested party cannot go
ahead and appoint an arbitrator.
Consequently, this Court hereby appoints Sri Subhas Sikdar,
retired District Judge, to act as a sole Arbitrator to resolve the disputes
between the parties. Parties are at liberty to raise all such contentions/claims
before the learned Arbitrator, as they may be advised. Nothing stated in this
order shall prejudice either side in raising their claims and/or counter-claims
before the Hon'ble Arbitrator.
Within a period of 2(two) weeks from today, the parties shall
obtain a declaration from him in terms of Section 12(1)(b) of the Arbitration
Page - 6 of 6
and Conciliation Act, 1996 and file it before the Registry of this High
Court.
Learned counsel for the petitioner is permitted to take back the
original agreement subject to condition that he will replace the same with a
Xerox copy duly authenticated by him.
Arbitration petition is disposed of accordingly. Pending
application(s), if any, also stands disposed of.
( INDRAJIT MAHANTY, CJ )
Sukhendu
