IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 8TH DAY OF FEBRUARY, 2019 BEFORE THE HON’BLE MR.JUSTICE ALOK ARADHE C.M.P.No.243/2017 BETWEEN:
M/s. T.J.Naik & Co., A Proprietary Concern, Having their registered office at Surya Terraces, Plot No.5, Flat No.1, Pune-Satara Road, Padmavathi, Pune – 411 403. … PETITIONER (By Sri Prashant Kumar, Adv. for Sri Sunil.P.P., Adv.) AND:
M/s. L & W Constructions Private Limited, Pentaford Tower, 2nd & 3rd Floor, No.8/3-1, Langford Road, Bengaluru – 560 025, Represented by its Director or Chief Operating Officer (COO) … RESPONDENT This civil miscellaneous petition is filed under Section 11(5) of the Arbitration and Conciliation Act, 1996, praying to appoint a retired Judge of District Court as the sole arbitrator.
This petition coming on for admission, this day, the Court made the following:
ORDER Mr. Prashant Kumar, learned Counsel for the petitioner.
Respondent though served, has remained unrepresented.
2. The petition is admitted for hearing and the same is heard finally.
3. By means of this petition under Section 11 of the Arbitration & Conciliation Act, 1996 (hereinafter referred as ‘the Act’, for short), the petitioner inter alia seeks appointment of a sole arbitrator to adjudicate the dispute that has arisen between the petitioner and the respondent.
4. Admittedly, the parties had entered into an agreement on 27.07.2013. Clause 8.2 of the agreement contains the arbitral clause, which reads as under:
“8.2 If the parties fail to reach an amicable settlement within the aforesaid stipulated period, any party may approach the CHIEF OPERATING OFFICER (COO) of the Contractor for appointment of an Arbitrator. The COO shall, within 15 days of the receipt of the aforesaid request, intimate three names of likely Arbitrators with address and qualifications to the party with a copy to the other party. The party, who approached the COO, shall choose one out of the three names, and inform the COO of the selected name, within 15 days of the receipt of three names from the COO.
On receipt of the name selected, the COO shall appoint the Arbitrator so selected by the party out of the names sent to the party.”
5. The petitioner in pursuance of the aforesaid clause has sent a notice on 02.02.2017 to the Chief Operating Officer of the Contractor for appointment of an arbitrator. However, the Chief Operating Officer of the Contractor failed to respond to the aforesaid notice.
6. A three Judge bench of the Supreme Court in the case of ‘M/S. DEEP TRADING COMPANY VS M/S. INDIAN OIL CORPORATION & ORS., AIR 2013 SC 1479’, while taking into account the requirement of Section 11(6) of the Act, in paragraph 20 has held as under:
“20. If we apply the legal position exposited by this Court in Datar Switchgears to the admitted facts, it will be seen that the Corporation has forfeited its right to appoint the arbitrator. It is so for the reason that on 09.08.2004, the dealer called upon the Corporation to appoint the arbitrator in accordance with terms of Section 29 of the agreement but that was not done till the dealer had made application under Section 11(6) to the Chief Justice of the Allahabad High Court for appointment of the arbitrator. The appointment was made by the Corporation only during the pendency of the proceedings under Section 11(6). Such appointment by the Corporation after forfeiture of its right is of no consequence and has not disentitled the dealer to seek appointment of the arbitrator by the Chief Justice under Section 11(6). We answer the above questions accordingly.”
7. Thus, in view of the aforesaid enunciation of law, the respondent has forfeited the right to appoint an arbitrator. Accordingly, in view of the law laid down in M/s. Deep Trading Company stated supra and with a view to ensure appointment of an independent and impartial arbitrator as laid in Section 11(8) of the Act, I deem it appropriate to appoint Sri H.V.Ramachandra Rao, Retired District Judge, as the sole arbitrator, to adjudicate the dispute between the parties. Office is directed to transmit the copy of this order to Sri H.V.Ramachandra Rao. Accordingly, petition is disposed of.
Sd/- JUDGE KK AAJ: CMP.No.243/2017 11.03.2019 ORDERS ON “BEING SPOKEN TO”
A memo is filed seeking modification of the order dated 08.02.2019.
Learned counsel for the petitioner submits that the proceedings be directed to be governed by the Rules of the Karnataka Arbitration Centre, Bengaluru.
In view of the aforesaid submission, the sentence beginning from ‘Office is directed to transmit the copy of this order to Sri H.V.Ramachandra Rao. Accordingly, petition is disposed of’ is deleted and it is directed to be incorporated as follows:
“Office is directed to transmit the copy of this order to Sri H.V.Ramachandra Rao. A copy of this order be dispatched to the Arbitration Centre, Khanija Bhavan, Bengaluru for necessary action in that regard. Learned counsel for the petitioner to also approach the Arbitration Centre with the relevant papers to be filed therein. The learned Arbitrator appointed herein shall thereupon enter reference and proceed with the matter in accordance with law and the Rules governing the Arbitration Centre.
Accordingly, petition is disposed of.”
This order shall be read in conjunction with the order dated 08.02.2019.
Sd/- JUDGE dn/-