Allahabad High Court Judgement

Allahabad High Court Judgement

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JUDGEMENT HEADLINE : Invocation Of Arbitration Clause Is Sine Qua Non For Maintaining An Application U/S 11 Of The Arbitration And Conciliation Act, 1996.
JUDGEMENT TITLE : Abdul Rashid Vs. National Building Construction Corp. Ltd., New Delhi. On 19/04/2012 By Allahabad High Court
CASE NO : ARBITRATION AND CONCILI. APPL.U/S11(4) NO. 56 OF 2001
CORAM : Hon'ble Pankaj Mithal,J.

HIGH COURT OF JUDICATURE AT ALLAHABAD

?A.F.R.
Court No. - 10

Case :- ARBITRATION AND CONCILI. APPL.U/S11(4) No. - 56 Of 2001

Petitioner :- Abdul Rashid
Respondent :- National Building Construction Corp. Ltd., New Delhi
Petitioner Counsel :- S.N.Sharma,C.K.Jha
Respondent Counsel :- K.M.Mishra

Hon'ble Pankaj Mithal,J.
Heard Sri C.K.Jha, Learned Counsel For The Petitioner And Sri Shambhu Chopra Representing National Buildings Construction Corporation Ltd.
The Petitioner Has Filed This Petition For Appointment Of An Arbitrator In Respect Of Certain Dispute Alleged To Be Arising Out Of A Contract Dated 7.1.1993. The Petition Was Filed On 12.12.2003 And It Remained Pending Without Any Orders. It Was Dismissed In Default On 15.5.2009 And Was Restored On 8.4.2011.
The Aforesaid Contract Contains An Arbitration Clause As Clause 20, Which Is Reproduced Below:
"In The Event Of Any Dispute Arising Out Of Any Of The Conditions Of This Contract The Matter Shall Be Referred To The Sole Arbitrator Of An Engineer Of The Corporation (Not Below The Rank Of Resident Engineer), Whose Decision Shall Be Final And Binding On Both The Parties."
Despite The Aforesaid Arbitration Clause, Petitioner Never Invoked The Same. At Least, There Are No Pleadings That Any Notice Seeking Appointment Of Arbitrator Or For Referring The Dispute/claim To The Arbitrator Had Been Given. No Notice Has Been Brought On Record.
Section 11 Of The Arbitration And Conciliation Act, 1996 (hereinafter Referred To As "the Act") Envisages Appointment Of An Arbitrator By The Chief Justice Or Any Person Or Institution Designated By Him Where Under The Appointment Procedure, A Party Fails To Act As Required Or Fails To Perform Any Function Entrusted To Him Or Fails To Appoint An Arbitrator Within 30 Days From The Receipt Of The Request For Such Appointment By The Other Party Or Even If The Parties Fail To Agree On The Arbitrator Within The Above Period.
A Plain Reading Of The Above Provision Clearly Reflects That The Appointment Of An Arbitrator By The Chief Justice Or The Person Designated By Him Can Only Be Resorted To When One Of The Parties Fail To Appoint An Arbitrator On The Demand Being Made By The Other Party Or When They Do Not Agree For The Arbitrator. Thus, Demand For Appointment Of An Arbitrator Or Invocation Of Arbitration Clause Is A Sine Qua Non For Making An Application For Appointment Of The Arbitrator Under Section 11 To The Chief Justice Or The Person Designated By Him. In The Absence Of Invocation Of Arbitration Clause It Is Not Within The Domain Of The Chief Justice Or The Person Designate To Refer The Dispute To An Arbitrator Or To Appoint An Arbitrator. In Such A Situation The Petition Seeking Appointment Of An Arbitrator To The Chief Justice/person Designate Would Not Be Maintainable.
In The Instant Case, As Referred Above, There Is No Material On Record To Establish That The Petitioner Ever Invoked The Arbitration Clause. The Petitioner Has Directly Approached The Chief Justice/person Designated For Appointment Of An Arbitrator Under Section 11 Of The Act. Therefore, The Petition Is Not Maintainable.
Sri Shambhu Chopra, Counsel For Respondent Has Filed An Affidavit Stating That Sri N.P.Aggarwal, An Engineer Holding The Post Of Senior General Manager With The National Buildings Construction Corporation Ltd. Has Already Been Appointed As Arbitrator Vide Order Dated 16.12.2011 Issued By The Chairman And Managing Director Of The National Buildings Construction Corporation Ltd. And The Order Has Been Brought On Record As An Enclosure To The Aforesaid Affidavit. The Appointment Has Duly Been Communicated To The Petitioner. The Said Appointment Of The Arbitrator Is Not Being Disputed.
In View Of The Aforesaid Appointment, When The Arbitrator Has Been Appointed As Per The Procedure Before The Invocation Of Arbitration Clause By The Petitioner, There Is No Occasion Justifying The Appointment Of Arbitrator In Exercise Of Power Under Section 11 Of The Act.
The Petitioner Is Free To Appear Before The Arbitrator And Take Objections, If Any, With Regard To His Appointment In View Of Section 16 Of The Act.
The Petition Is Dismissed With The Above Observations.

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