Heard Ms. Arohi Bhalla, learned counsel for the petitioner and Sri Kshitij Mishra, learned counsel for the respondent.
This is an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of Arbitrator.
This Court had passed the following order on 25.02.2020:-
"Heard Shri Arohi Bhalla, learned counsel for the petitioner and Shri Sanjay Bhasin, learned Senior Advocate assisted by Shri Kshitij Mishra, learned counsel for the respondent.
The instant petition has been preferred under Section 11(6) of the Arbitration and Conciliation Act, 1996.
It has been submitted that the petitioner had entered in a contract for the supply and installation of instrument for DNA Unit for the Forensic Science Lab (FSL), Varanasi, U.P., by means of the agreement dated 10.04.2018. The aforesaid agreement in Clause 6.21(b)(i) contains an arbitration clause, which reads as under:-
"Any dispute or difference whatsoever arising between the parties to the Agreement out of or relating to the constructions, meaning, scope, operation or effect of the Agreement or validity of the breach thereof, which cannot be resolved through negotiation process, shall be referred to a sole Arbitrator to be mutually agreed by both the parties. In the event of disagreement between the parties the sole Arbitrator shall be appointed by Headquarter, UP Police Technical Services, Uttar Pradesh, Lucknow. The Provision of Arbitration and Conciliation Act, 1996 shall apply. The Arbitrator shall be held in Lucknow, India and the language shall be English only."
It has been submitted that on account of certain disputes which occurred in between the parties, the petitioner by means of his letter dated 10.12.2019 had invoked the arbitration clause and also requested that a Retd., High Court Judge may be appointed as an arbitrator. The aforesaid notice was duly served on the respondent, who by means of its reply dated 24.12.2019 raised an objection that since the petitioner had approached the Micro, Small and Medium Enterprises Tribunal in terms of U.P. Micro, Small and Medium Enterprises Development Act, 2006, hence, until and unless the same is pending, the respondent is not in a position to make any reference through arbitration.
It is at this stage that the petitioner instituted the above petition and while doing so in Paragraph-18, the petitioner had given his undertaking that once the arbitrator is appointed, the petitioner shall withdraw his above noted claim before the U.P. Micro and Small Enterprises Facilitation Council, Kanpur. It is in this backdrop that the instant petition has been filed.
Shri Sanjay Bhasin, learned Senior Advocate has raised an objection that the petition is premature inasmuch as the arbitration clause contained in Para-6.21 of the agreement envisages the procedure and unless the same is adhered, the petition would not be maintainable at the behest of the petitioner. Elaborating his submission, it has been submitted that since the petitioner had already approached Micro, Small and Medium Enterprises Tribunal and the matter was pending even despite having raised the demand for arbitrator by means of his letter dated 10.12.2019 yet the petitioner had not complied with the reply inasmuch as the respondent had already indicated that till such time the reference was pending before the Micro, Small and Medium Enterprises Tribunal and the same was not withdrawn, hence, the arbitration reference is not possible. It is in this backdrop it has been submitted that even today though an application for withdrawal has been submitted and is engaging the attention of Micro, Small and Medium Enterprises Tribunal, however, the claim has not yet been withdrawn.
Shri Arohi Bhalla responding to the aforesaid has submitted that from a bare perusal of the arbitration clause, it would indicate that all that is required to be seen is whether the petitioner has invoked the same in accordance with the procedure agreed in between the parties. It has been submitted that the petitioner had sent a letter invoking the arbitration clause and raising his demand for appointment of an arbitrator. The said notice was duly received by the respondent and if at all they had any suggestion, they could have referred or responded asking the petitioner for his suggestion regarding appointment, but in the instant case, the respondent point-black refused on the pretext that the reference is pending before the Micro, Small and Medium Enterprises Tribunal, which is in itself amounts to breakdown of the procedure contemplated in between the parties inasmuch as there was no mutuality regarding the appointment of the arbitral Tribunal, hence, the conditions under Section 11(6) of the Act of 1996 has been attracted and the petition is mature to be considered on merits.
The Court has considered the rival submissions of the learned counsel for the parties and from the perusal of the record, it is not disputed that the parties had entered in an agreement which contains an arbitration clause. It is also not disputed that the petitioner by means of his letter dated 10.12.2019 had invoked the arbitration clause. The fact whether the reference is pending before the Micro, Small and Medium Enterprises Tribunal is a different question altogether and even pendency of the aforesaid is not going to hamper the rights of the petitioner to invoke the arbitration clause. If at all the respondent had any objection or had to suggest then they were equally free to refer or suggest any name for the appointment of a sole arbitrator. The stand taken by the respondent that till such time the petition filed by the petitioner before Micro, Small and Medium Enterprises Tribunal is pending, the respondent would not be able to refer the matter for arbitration actually amounts to refusal.
In the aforesaid circumstances, this Court is of the view that the arbitration clause subsists in between the parties. The disputes have occurred which requires to be adjudicated in light of the arbitration clause No.6.21 and since the agreed procedure has failed, hence, now it is for this Court to appoint an arbitrator.
Accordingly, this Court proposes the name of Hon'ble Mr. Justice U.K. Dhaon (Retd.) Judge of this Court, R/o Prem Kuti-4, Gokhale Marg, Lucknow, Mobile No.9839096902 for being appointed as an Arbitrator.
Learned counsel for the petitioner shall supply a complete set of the paper-book within a period of one week from today and the same shall be forwarded to the proposed arbitrator for seeking his consent in terms of Section 12(1) of the Act of 1996.
List this matter in week commencing 23.03.2020.
In pursuance of the aforesaid order Shri U.K. Dhaon (Retd.) Judge of this Court has furnished the disclosure and accorded his consent to be an Arbitrator vide letter dated 17.03.2020.
In view of above Shri U.K. Dhaon (Retd.) Judge of this Court, R/o Prem Kuti-4, Gokhale Marg, Lucknow, Mobile No.9839096902 is appointed as an Arbitrator to arbitrate with regard to the dispute between the parties herein.
The application is disposed of accordingly.
Office is directed to communicate a copy of this order to Shri U.K. Dhaon (Retd.) Judge of this Court, forthwith..
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Order Date :- 12.1.2021 Akanksha