Uttarakhand High Court

ARBAP/42/2021 on 28 April, 2023

        IN THE HIGH COURT OF UTTARAKHAND
                   AT NAINITAL
             HON'BLE THE CHIEF JUSTICE SRI VIPIN SANGHI

                                28TH APRIL, 2023

        ARBITRATION APPLICATION No. 42 OF 2021

Between:

M/s Shring Construction Company
(Private) Limited.                                                     ...Applicant

and

State of Uttarakhand and another.
                                                                  ...Respondents

Counsel for the applicant.           :   Mr. Alok Mahra, the learned counsel.

Counsel for respondent no. 1.        :   Mr. J.C. Pande, learned Standing Counsel for
                                         the State of Uttarakhand.

Counsel for respondent no. 2.        :   Mr. Vinay Kumar, learned counsel.


JUDGMENT :

The applicant has preferred the present Arbitration

Application, under Section 11(6) of the Arbitration and

Conciliation Act, 1996 (the Act), to seek appointment of a

sole arbitrator to adjudicate the disputes and differences,

which have arisen between the parties. This case has a

checkered history.

2. The parties entered into an agreement in relation

to Maneri Bhali Hydro - Electric Project Stage-II on

23.01.1984. Under the said agreement, the petitioner was

acting as the contractor, and the respondent was the

employer. This agreement contained an arbitration clause, which provided that "Every dispute, difference or question

which may at any time arise between the parties hereto or

any person claiming under them, touching or arising out or in

respect of this contract or the subject matter thereof shall be

referred for arbitration to two arbitrators one to be nominated

by the contractor and the other by the Government who shall

select an umpire by mutual agreement and the decision of

the arbitrators or umpire, as the case may be shall be final

and binding on the contracting parties".

3. A supplementary agreement was also entered into

between the parties on 03.07.2002. This supplementary

agreement was also covered by an arbitration agreement in

Clause 3.01, which provided that every dispute, difference or

question, which may, at any time, arise between the parties

hereto, or any person claiming under them, touching or

arising out, or in respect of this agreement, or the subject

matter thereof, shall be resolved as per the procedure laid

down, which provided for conciliation; arbitration in respect of

new disputes, and consideration by the Dispute Resolution

Board in respect of old disputes.

4. It appears that the Dispute Resolution Board gave

its opinion in favour of the applicant, which led to a challenge

before the District Judge. The challenge to the decision of

the Dispute Resolution Board having failed, First Appeal No.

13/2007 was preferred by respondent no. 2. The applicant

sought to execute the decision of the Dispute Resolution

Board, which was assailed by the respondent in Civil Revision

No. 22/2008. Both these proceedings came up before the

Division Bench of this Court headed by the then Chief Justice.

On 06.06.2008, the Court passed the following order :-

"As the arguments were in progress the parties through their learned counsel came to terms and submitted and stated before us that with respect to all the pending disputes between the parties relating to or arising out of the original agreement No.1/SE/83-84 executed on 23.01.1984, the supplementary agreement No.1(S)/SE/83-84 executed on 03.07.2002, the Tripartite Agreement dated 27.02.2004 and for adjudication of all the claims/counter-claims of the parties with reference to the aforesaid Agreements, by and after setting aside and quashing all the proceedings, decisions, orders, judgments and actions of the past, whether taken or passed by the courts, the DRB, or other institutions/fora, including the judgment dated 28.09.2006 impugned in this Civil Revision and First Appeal No.13/2007, the parties would like to, forgetting the past and erasing the past memories, go in for arbitration by taking recourse to the remedy and mechanism of adjudication of all the disputes and claims/counter-claims through the aegis of a Multi-Member Arbitral Tribunal, now to be appointed by this Court. Actually, the parties went so far as to suggest and agree as well as submit to us that the Multi-Member Arbitral Tribunal should comprise of three- Members, as far as two out of three are concerned, one each to be appointed / nominated by the parties and the third, Presiding Arbitrator who should be a retired Judge, to be appointed by the Court. The parties also agree that the claims / counter claims to be submitted before the proposed arbitral Tribunal shall be treated as being within time and shall not be treated or considered as time-barred in view of the fact that several proceedings for adjudication have been pending in various fora in the past.

Learned counsel for the parties seek one week's adjournment to evolve the broad modalities leading to the appointment of the aforesaid Multi-Member Arbitral Tribunal as well to submit the particulars of the nominee arbitrators of the parties. The parties also agree that the arbitral proceedings by the aforesaid Multi-Member Tribunal shall be conducted in accordance with the provisions of the Arbitration and Conciliation Act, 1996. The parties also agree that the entire record which was before the DRB and which is presently in the possession of the

petitioners/revisionists shall be handed over by the revisionists to the newly constituted Arbitral Tribunal.

List the case on 17th June 2008 as item No.1."

5. The case was adjourned to 17.06.2008, on which

date, the following order was passed :-

"This order is being passed in Civil Revision No. 22 of 2008 as well as First Appeal No. 13 of 2007.

As a sequel to the order dated 6th June, 2008 passed in Civil Revision No. 22 of 2008, the petitioners in the said Civil Revision, who are appellants in First Appeal No. 13 of 2007, have proposed, through the learned Advocate General the name of Lt. Gen. (Retd.) M.S. Gusain, P.V.S.M., A.V.S.M., V.S.M. as their nominee member in the Multi- Member Arbitral Tribunal. Through the medium of an affidavit filed in First Appeal No. 13 of 2007 by Sri P.M. Singh on behalf of the respondent Shring Construction Company (affidavit affirmed on 17th June, 2008), Sri T.S. Sethurathnam, Retired Chairman, Madhya Pradesh State Electricity Board, R/o C-139, Sarvodaya Enclave, New Delhi, has been nominated as the other member in the Arbitral Tribunal. Along with the said affidavit of Sri P.M. Singh, the respondents have also enclosed a copy of their communication No. SCC/DDN/DPH/2008/3083 dated 10th June, 2008, whereby the fact about the nomination of Sri T.S. Sethurathnam, Retired Chairman, Madhya Pradesh State Electricity Board, was conveyed to The Superintending Engineer, Maneri Bhali Stage-II, Circle Joshiyara, Uttarkashi.

List on 1st July, 2008 for final disposal."

6. The case was finally disposed of on 24.07.2008, on

which date, the following order was passed :-

"As a sequel to the mandate contained in the Court order dated 06th June, 2008 readwith the subsequent Court order dated 17.6.2008, we hereby appoint Shri Justice N.C. Jain (Retired), Former Chief Justice, Guwahati High Court, (presently residing at Chandigarh) as the third, presiding Member of the three member Arbitral Tribunal.

The Three-member Arbitral Tribunal accordingly shall now be constituted as under:

(i) Shri Justice N.C. Jain (Retired), Former Chief Justice of Guwahati High Court - Presiding Arbitrator.

(ii) Lt. Gen. (Retired) M.S. Gusain - Member.

(iii) Shri T.S. Sethurathnam (Retired Chairman, Madhya Pradesh State Electricity Board) - Member.

The newly constituted Arbitral Tribunal is hereby requested by us to enter upon the reference immediately and without any delay and to ensure that the arbitral proceedings start and are completed very very expeditiously, of course subject to the convenience of the members of the Tribunal. We also request the Tribunal to ensure that the arbitral award is passed without any delay, again subject to the convenience of the members, but not ignoring the fact that the disputes between the parties have been pending indeed for a very very long time (almost three decades).

The parties agree before us that the venue of the arbitral proceedings should be either at Chandigarh or Dehradun, as would be fixed by the arbitral tribunal from time to time in consultation with the parties.

As far as the members of the Arbitral Tribunal are concerned, such parties whose nominees they are, shall pay to them their fees and their traveling, lodging and boarding expenses in connection with the conduct of arbitral proceedings. As far as the Presiding Member of the Tribunal is concerned, he shall fix and determine his own fee. In addition to the fee that he shall be fixing, he would also be paid the actual traveling, lodging and boarding expenses to be incurred by him in connection with the conduct of the arbitral proceedings. If the arbitral procedings are conducted at Dehradun, in addition to the lump sum fee that the Presiding Member may fix, he shall be paid Rs. 20,000/- (Rupees twenty thousand only) per day for the days of his absence from Chandigarh for the conduct of the proceedings at Dehradun. The fees and all the expenses of the Presiding Member shall be paid to him in equal share by both the parties.

The revisionists in terms of order dated 06th June, 2008 shall hand over to the newly constituted Arbitral Tribunal the entire record of the case. It shall be upto the Arbitral Tribunal to decide, in consultation with and after hearing the parties whether any new, fresh evidence would be required to be adduced in the arbitral proceedings or the Arbitral Tribunal shall proceed to adjudicate upon the disputes on the basis of the evidence and/or material already on record.

The revision petition as well as the first appeal is disposed of. No order as to costs."

7. The three member Arbitral Tribunal, constituted in

terms of the aforesaid orders, rendered three opinions at

variance with each other. No two opinions could be

construed as a majority opinion, and no award could be culled

out from the three opinions. Consequently, the claims of the

applicant, and the disputes arising between the parties,

remained unresolved. It is in this light and background that

the applicant has preferred the present Arbitration

Application.

8. Upon issuance of notice, respondent no. 2 has filed

its counter affidavit. The stand taken by respondent no. 2 is

that there is no surviving arbitration agreement between the

parties. The stand taken by the respondents in paragraph

nos. 16 to 18 of their reply reads as follows :-

"16. That it is submitted that after the judgment dated 25th august 2021 passed by the Ld. Commercial Court, Dehradun for appointment of Sole Arbitrator under the principal Agreement or the supplementary agreement is not maintainable for the reason that the Clause S.3.01(D) provides for constitution of the Dispute Resolution Board for old dispute and the dispute for which the Applicant/contractor wants appointment of Arbitrator are old disputes arising from Principal Agreement, which stands substituted by the supplementary agreement.

17. That after constitution of the Dispute Resolution Board under the Supplementary Agreement for resolution of the old disputes between the parties, the mechanism of resolving the dispute through arbitration, no more survives and therefore the applicant cannot claim for appointment of arbitrator either under Principal Agreement or the Supplementary Agreement in respect of the old disputes arising from the agreement dated 23rd January 1984.

18. That the present application filed by the Applicant for appointment of Arbitrator by invoking the Section 11(6) of the Arbitration and Conciliation Act, 1996 is also not maintainable for the reason that the three member Arbitral Tribunal was constituted by the

consent of the parties, before the Division Bench of this Hon'ble Court as a onetime measure."

9. I have heard learned counsels, and considered their

submissions.

10. The orders passed by the Division Bench, extracted

hereinabove, in my view, clearly constitute an arbitration

agreement between the parties to refer all the disputes and

differences arising out of their original agreement dated

23.01.1984, supplementary agreement dated 03.07.2002,

and the tripartite agreement dated 22.07.2004, to

arbitration.

11. The scope of the arbitration was all encompassing,

as is evident from the recording of the agreement of the

parties made on 06.06.2008 by the Court. Arbitration

Agreement, as is provided for in Section 7 of the Arbitration

and Conciliation Act, 1996, means an agreement by the

parties to submit to arbitration all, or certain disputes, which

have arisen, or which may arise between them in respect of a

defined legal relationship, whether contractual or not. In the

present case, the parties agreed to submit all their disputes,

which arose out of their aforesaid agreements - which are

contractual, to arbitration. An arbitration agreement may be

in the form of an arbitration clause in a contract or, in the

form of a separate agreement. It is an agreement, which

should be in writing, if it is contained either in a document

signed by the parties, or in an exchange of letters, telex,

telegrams or other means of telecommunication, including

communication through electronic means, which provide a

record of the agreement, or an exchange of statements of

claim and defence in which the existence of the agreement is

alleged by one party, and not denied by the other.

12. In the present case, the agreement stands duly

recorded by the Court in its order, after hearing the counsels,

and in their presence, on 06.06.2008. That arbitration

agreement was further acted upon by the parties, by

nominating two arbitrators, namely, Lt. Gen. (Retired) M.S.

Gusain and Shri T.S. Sethurathnam (Retired Chairman,

Madhya Pradesh State Electricity Board), as the two members

of the Arbitral Tribunal, and the third, namely, Shri Justice

N.C. Jain (Retired), Former Chief Justice of Guwahati High

Court, was nominated by the Court as the Presiding

Arbitrator, in terms of the agreement between the parties. It

is not claimed by the respondent, that before the Tribunal,

any objection was raised by it, to the constitution of the

Arbitral Tribunal, or to the assumption of jurisdiction by the

Tribunal.

13. The stand taken by the respondents, that it was a

one-time agreement, has no basis. It was not so recorded on

06.06.2008 that, in case the three member Arbitral Tribunal -

constituted in terms of the agreement of the parties, fails to

render the award, the arbitration agreement itself would

perish. There is nothing to suggest that it was only a one-

time measure. The parties having agreed to refer all their

disputes arising out of the aforesaid agreement to arbitration,

the distinction sought to be drawn by respondent no. 2, at

this stage, between old and new disputes - to say that the

new disputes only could be referred to arbitration, and the old

decisions have to be decided by the Dispute Resolution

Board, has no basis or merit.

14. I, therefore, reject the objections raised by

respondent no. 2, and I am of the view that the present

application deserves to be allowed.

15. The next issue, which falls for my consideration is,

whether it is necessary that a three member Arbitral Tribunal

alone should be constituted, or whether I can proceed to

appoint a sole arbitrator to adjudicate their disputes?

16. The fundamental agreement that the parties

entered into, and which was recorded on 06.06.2008, was to

resolve all the disputes arising out of the three agreements

referred to in the order dated 06.06.2008, through

arbitration. The number of Arbitrators that may be appointed

to resolve the disputes, is not intrinsically linked to the

fundamental agreement of the parties, to resolve their

disputes through arbitration. The purpose of an agreement

to resolve disputes through arbitration, is to have an

independent third party, other than a Judge - who adornes a

conventional Court, to decide the factual and legal disputes

between the parties, by applying the principles of equal

treatment, fairness, impartiality, and by applying the well

settled principles of law. That objective can be achieved with

the constitution of even a sole member Arbitral Tribunal, and

it is not necessary that the Court should appoint a three

member Arbitral Tribunal, when a three member Arbitral

Tribunal, earlier constituted, has failed to render an

executable award. The three member Tribunal is bound to be

more expensive and burdensome on the pockets of the

parties. They have already incurred the expenditure of

funding the Arbitral proceedings conducted by the three

member Tribunal. In such circumstances, the Court would be

justified in constituting a single member Arbitral Tribunal.

17. The aforesaid aspect has been considered by me,

while sitting as a Judge of the Delhi High Court in Ariba

India Private Ltd. v. M/s Ispat Industries Ltd, O.M.P.

358/2010. In the said case as well, a three member

Arbitral Tribunal had been constituted under the agreement

of the parties. The petitioner was aggrieved by the manner

in which the proceedings were being undertaken by the

Tribunal. The issue, whether the Court could appoint a sole

Arbitrator, when the agreement between the parties provided

for constitution of a three member Arbitral Tribunal, which

had been so constituted, and had failed to conduct the

proceedings expeditiously, was decided in that case. The

relevant extract from the said decision reads as follows :-

"106. This Court in M/s. Singh Builders Syndicate v. Union of India, ILR (2006) I Delhi 501, held that the mandate of the arbitral tribunal constituted in terms of clause 64 of the General Terms and Conditions stood terminated on account of the failure of the tribunal to act without undue delay. The arbitral tribunal consisted of three arbitrators. The arbitrators were railway employees. The proceedings did not proceed for several years on account of the frequent transfers of the successively appointed arbitrators. The Court proceeded to consider the plea of the petitioner that an independent arbitrator be appointed, as the respondent had lost its right to suggest names of arbitrators. The plea of the petitioner was that under certain circumstances, notwithstanding the procedure contained in the arbitration agreement, the Court had the power to appoint an arbitrator.

107. The learned Single Judge proceeded to take note of a few decisions, including BWL Limited v. MTNL, 2000 (2) ALR 190 (Del). In this decision, the Court, inter alia, observed "it has now become common place for persons who have retained this power of appointment of an Arbitrator, not to act at all or to act with such obduracy as to render an Arbitration Clause totally meaningless." It was held in this decision that even after notice of appointment of arbitrator, if the appointing authority had allowed thirty days time to lapse without taking action, the aggrieved party could approach the Court for appointment of an arbitrator and the persona designata forfeits its right to appoint the arbitrator. The Court, in such circumstances, can step in and take charge of the proceedings and appoint the arbitrator.

108. The learned Single Judge then took note of the decision in Datar Switchgears Ltd. v. Tata Finance Ltd. & Anr., 2000 (3) Arb.LR 447 (SC), wherein the aforesaid dicta was approved with the modification that merely on expiry of thirty days time, the right of appointment which vested in the persona designata did not forfeit. The appointment could be made even after the expiry of thirty days period, but before the application for appointment of an arbitrator is filed before the Court.

109. The Court then took note of the decision in Interstate Constructions (supra), wherein a learned Single Judge of this Court while terminating the mandate of the arbitrator on the ground of bias, held: "It is this type of conduct and dealing which sometimes compels a Court to override clauses in an agreement which waive objection as to impartiality of the Arbitration on the grounds that he is an officer of one of the parties to the dispute." I may, once again, note that the overruling of Interstate Constructions (supra) does not impinge on the aforesaid aspect of the matter.

110. The learned Single Judge also took note of the decision in Sushil Kumar Raut v. Hotel Marina & Ors., 2005 (81) DRJ 533, decided by a Division Bench of this Court, wherein the Division Bench proceeded to appoint an arbitrator in the peculiar circumstances of the case, which is not covered by the provisions of the Act. The Division Bench held as follows: "We are conscious of the position that arbitration admits of least judicial intervention and the manner in which an arbitrator is to be appointed. But we are faced with an impasse which is neither covered by the provisions of the Arbitration Act, nor any precedent. This, if left unattended would have the natural consequence of leaving the disputes between the parties unresolved which would be contrary to the spirit and intent of the Arbitration Act. It would, Therefore, require to be broken which can be only done by the appointment of an impartial arbitrator. This may not be technically or strictly in tune with the provisions of the Act which do not provide for such like eventualities but it is surely dictated by the interests of justice. Therefore to promote and secure the interests of justice, it would be appropriate to set aside the impugned order and appoint an independent arbitrator."

111. Deriving strength from the aforesaid three decisions, the learned Single Judge in Singh Builders Syndicate (supra) expressed his opinion that "in the present case also time is ripe for constituting an independent arbitral tribunal by this Court." The Court, after discussing the facts of that particular case, held:

".... ... ... Because of dilly dally practice adopted by the respondent at every stage and repeatedly, the arbitration proceedings are stuck up at the initial stage though seven years have passed since the dispute arose. Therefore, it would be a fit case to

appoint a sole arbitrator by this court superseding the procedure prescribed in the arbitration clause. That is the only choice left in view of the aforesaid conduct of the respondent."

112. This decision was challenged before the Supreme Court, which is reported as Union of India v. Singh Builders Syndicate, (2009) 4 SCC 523. The Supreme Court, in para 3 of its decision, observed as follows:

"3. It is true that the Arbitral Tribunal should be constituted in the manner laid down in the Arbitration agreement. Provisions for arbitration in contracts entered by governments, statutory authorities, and government companies, invariably require that the Arbitrators should be their own serving officers. Such a provision has to be given effect, subject to requirements of independence and impartiality. But there can be exceptions and this case which has a chequered history, falls under such exceptions." (emphasis supplied)

113. The Supreme Court posed the question which arose before it, i.e. "Whether the appointment of a retired Judge of the High Court as the sole arbitrator should be set aside and the arbitral tribunal should again be constituted in the manner provided in terms of clause 64 ?" The Supreme Court rejected the reliance placed by Union of India on Union of India v. M.P. Gupta, (2004) 10 SCC 504, (a decision under the Arbitration Act, 1940) wherein it had been held that the appointment of a retired Judge as the sole arbitrator contrary to clause 64 (which requires serving gazetted railway officers to be appointed) was impermissible, on the ground that the position under the new Act is different. The Supreme Court placed reliance on Northern Railway Administration (supra), wherein it had been held "that the appointment of arbitrator(s) named in the arbitration agreement is not mandatory or a must, but the emphasis should be on the terms of the arbitration agreement being adhered to and/or given effect as closely as possible." Para 14 of this decision read as follows:

"It was further held in Northern Railway case that the Chief Justice or his designate should first ensure that the remedies provided under the arbitration agreement are exhausted, but at the same time also ensure that the twin requirements of Sub-section (8) of Section 11 of the Act are kept in view. This would mean that invariably the court should first appoint the Arbitrators in the manner provided for in the arbitration agreement. But where the independence and impartiality of the Arbitrator/s appointed/nominated in terms of the arbitration agreement is in doubt, or where the Arbitral Tribunal appointed in the manner provided in the arbitration

agreement has not functioned and it becomes necessary to make fresh appointment, the Chief Justice or his designate is not powerless to make appropriate alternative arrangements to give effect to the provision for arbitration." (emphasis supplied)

The ratio of the decision in Union of India v. Singh Builders Syndicate (supra), in my view, squarely applies in the facts of the present case.

114. No doubt, on facts, the position before the Supreme Court in the case of Singh Builders Syndicate (supra) was different, inasmuch, as, the tribunal in that case had been constituted on more than one occasion by adhering to clause 64 of the General Terms and Conditions of the Contract, whereas in the present case, the tribunal has been constituted only once, in terms of the arbitration agreement between the parties. However, that to my mind, does not make much difference. What has to be seen is the conduct of the concerned party in appointing an arbitrator; the conduct of the arbitrator so appointed; and the resultant situation which has arisen in the case. I have already discussed all these aspects herein above. The result of the respondent making the appointment of one of the arbitrators has been that the proceedings have got stretched over a period of 4 ½ years with hardly any progress, and the costs incurred by each of the party in the conduct of the proceedings, till date, is to the tune of Rs.12.75 lacs. This situation is wholly unacceptable and makes a mockery of the institution of arbitration.

115. Pertinently, under clause 64 of the General Terms and Conditions of the Contract, the arbitrators had necessarily to be serving railway officers. In para 2 of its decision, the Supreme Court paraphrased the requirement of clause 64 as follows:

"2. The appellant contends the appointment of arbitrators should be only in accordance with Clause 64 of the general terms and conditions contract which requires two serving Gazetted Railway officers of equal status being appointed as Arbitrators, one by the contractor from a panel made available by the General Manager of Northern Railways and the other by the Northern Railways, and the two arbitrators so appointed, in turn appointing an Umpire."

116. Despite that being the position, the Supreme Court upheld the order of this Court directing appointment of a sole independent arbitrator, i.e. a retired Judge of this Court. In the present case, as per the arbitration agreement, no specific qualification has been laid down that the arbitrator need possess.

117. In Indian Oil Corporation Ltd. & Others v. Raja Transport Pvt. Ltd., (2009) 8 SCC 520, in para 45, the Supreme Court observed that if the arbitration agreement provides for arbitration by a named arbitrator, the Court should normally give effect to the provisions of the arbitration agreement. By placing reliance upon Northern Railway Administration (supra), it was held that:

"45. ... ... ... where there is material to create a reasonable apprehension that the person mentioned in the arbitration agreement as the arbitrator is not likely to act independently or impartially, or if the named person is not available, then the Chief Justice or his designate may, after recording reasons for not following the agreed procedure of referring the dispute to the named arbitrator, appoint an independent arbitrator in accordance with Section 11(8) of the Act. In other words, referring the disputes to the named arbitrator shall be the rule. The Chief Justice or his designate will have to merely reiterate the arbitration agreement by referring the parties to the named arbitrator or named Arbitral Tribunal. Ignoring the named arbitrator/Arbitral Tribunal and nominating an independent arbitrator shall be the exception to the rule, to be resorted for valid reasons." (emphasis supplied)

118. In my view, the present is an exceptional situation which calls for departure from the manner of constitution of the arbitral tribunal, for the reasons already indicated herein above.

...

124. I am, therefore, of the view that in the peculiar facts of this case, with a view to advance the cause of justice and to achieve expeditious and cost effective disposal of the arbitral reference, this Court is justified in not resorting to the manner of constitution of the arbitral tribunal as agreed between the parties in clause 9.10 of their agreement and instead, this is a fit case where the Court should appoint an independent and impartial sole arbitrator to adjudicate the arbitral reference." (emphasis supplied)

18. Counsel for the applicant has also placed before me

the judgment passed by the Andhra Pradesh High Court in K.

Venkateswarlu v. State Of A.P. And Anr., 2003 (4) ALD

651. In this case as well, the Court took the view that the

agreement between the parties, for appointment of a panel of

three arbitrators, had ceased to be in operation, and the

Court could appoint an Arbitrator. It need not necessarily be

again a panel of three arbitrators. Paragraph no. 25 of the

said judgment reads as follows :-

"25. Having regard to the fact that the agreement between the parties for appointment of a panel of three arbitrators ceases to be in operation, the Court can appoint an arbitrator. It need not necessarily be again a panel of three arbitrators either by designation as mentioned in the agreement or different arbitrators. As can be seen from Sub-section (8) of Section 11 of the New Act the Chief Justice or his designate while appointing an arbitrator shall have due regard to the qualifications required of the arbitrator by the agreement of the parties and other considerations as are likely to secure the appointment of an independent and impartial arbitrator. Wide discretion has, therefore, been conferred upon the Chief Justice or his designate by the New Act to appoint a suitable arbitrator. In that view of the matter, there is no need to appoint again a panel of arbitrators. The problem can also be viewed in a different angle. If it is only to fill up the gap left by the party where the applicant has already nominated his arbitrator and the respondent refused to nominate his arbitrator where the agreement between the parties inter se envisages the resolution of the dispute by three arbitrators, the Court can appoint at the request of the party one arbitrator and the two arbitrators shall have to appoint third arbitrator. In the event again both the arbitrators failed to agree upon the third arbitrator, the parties have to approach the Court again to nominate the third arbitrator. Under the scheme as can be seen from Section 11 of the New Act, the Chief Justice or his designate shall appoint an arbitrator at the request of the party where the other party fails to appoint an arbitrator within thirty days from the date of the request to do so; or where the two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their appointment. Therefore, it is obvious that the scheme has not envisaged the appointment of a panel of three arbitrators. Once the agreement in that regard ceases when the party fails to agree upon the same, the Chief Justice or his designate is free to appoint a sole arbitrator even in respect of the matters where the party agreed upon to have the dispute resolved by a panel of three arbitrators. Therefore, the parties need not approach the Court twice. For the foregoing reasons, I am of the considered view that it is not required of under the New Act to appoint a panel of three arbitrators again having due regard to the fact that the parties agreed upon to have the dispute resolved by a panel of three arbitrators."

19. The Court proceeded to appoint a sole arbitrator to

resolve the disputes between the parties in that case. In the

present case, the applicant has given its consent to

appointment of a sole Arbitrator. Though, the respondents

have not given their express consent to this Court appointing

a sole arbitrator yet, they have not insisted on Constitution of

a three member Tribunal. Pertinently, till date, the

respondents have not named a nominee arbitrator.

20. The facts of the present case, in my view cry for

appointment of a sole arbitrator. The parties have spent long

years, firstly in court, and thereafter before the three

member Arbitral Tribunal, with no resolution of their disputes.