IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15TH DAY OF MARCH 2019 BEFORE THE HON’BLE MR.JUSTICE ALOK ARADHE CIVIL MISCELLANEOUS PETITION NO.90 OF 2018 BETWEEN:
M/S. VENKATARAMANA CONSTRUCTIONS 105, 9-13, LAKSHMIKRISHNA APARTMENT R.C. ROAD, BEML LAYOUT, 3RD STAGE RAJARAJESWARINAGAR BANGALORE-560 098 A PARTNERSHIP FIRM REPRESENTED BY ITS MANAGING PARTNER SRI D.V. SUBBA REDDY. …PETITIONER (BY SRI VASUDEA NAIDU S., ADV.) AND:
UNION OF INDIA REPRESENTED BY 1. THE GENERAL MANAGER SOUTH WESTERN RAILWAY GADAG ROAD, HUBLI-64.
2. THE DIVISIONAL RAILWAY MANAGER BANGALORE DIVISION SOUTH WESTERN RAILWAY BENGALURU-23.
3. THE SENIOR DIVISIONAL ENGINEER (CO-ORD) BANGALORE DIVISION SOUTH WESTERN RAILWAY BENGALURU-23. …RESPONDENTS (BY SRI C.BABU, ADV.) THIS CIVIL MISCELLANEOUS PETITION IS FILED UNDER SECTION 11(6) OF THE ARBITRATION AND CONCILIATION ACT 1996, PRAYING TO APPOINT A SOLE ARBITRATOR TO RESOLVE THE DISPUTES AND OUTSTANDING ISSUES BETWEEN THE PARTIES IN ACCORDANCE WITH THE PROVISIONS OF AGREEMENT BEARING NO.256/SBC/2015 DATED: 03.12.2015 AND IN CONSONANCE WITH ARBITRATION AND CONCILIATION ACT, 1996 (AMENDED ACT OF 2016) IN THE INTEREST OF JUSTICE.
THIS CIVIL MISCELLANEOUS PETITION COMING ON FOR ADMISSION, THIS DAY, THE COURT MADE THE FOLLOWING:
O R D E R Sri Vasudeva Naidu S., learned counsel for petitioner. Sri C. Babu, learned counsel for respondents No.1 to 3.
2. The petition is admitted for hearing. With the consent of the parties, the matter is heard finally.
3. In this petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, the petitioner inter alia seeks for appointment of a Sole Arbitrator to resolve the dispute between the parties.
4. The facts giving rise to filing the petition briefly stated are that the parties had entered into an agreement dated 03.12.2015. The contract was for a period of six months. The dispute arose between the parties in relation to the subject matter of the agreement. Thereupon, the petitioner served a notice on the respondents on 03.12.2016 invoking Clause-64 of the General Conditions of Contract. The respondents by communication dated 08.11.2017 constituted an arbitration Tribunal consisting of retired Officers of the Railways. The petitioner, thereupon raised an objection by communications dated 13.11.2017 and 17.11.2017 with regard to constitution of the Arbitration Tribunal on the ground that the Arbitrators so appointed are not eligible to be appointed, in view of mandate of Section 12(5) read with Schedule 7 of the Arbitration and Conciliation Act, 1996. Thereupon, by communication dated 31.07.2018, the petitioner was informed that there was no other option available with the Railways as per General Conditions of Contract to appoint either Serving/Retired Officer Arbitrator Tribunal as per the existing Railway Board Guidelines and the Railways have no jurisdiction directly to appoint outside/independent Arbitrator to adjudicate the dispute.
5. I have heard the learned counsel for the parties at length.
6. Admittedly, in the instant case, the arbitration proceeding has commenced after the amended Act came into force from 23.10.2015. Section 12(5) of the Arbitration and Conciliation Act, 1996 provides that, notwithstanding any prior agreement to the contrary, any person whose relationship, with the parties or counsel or the subject-matter of the dispute, falls under any of the categories specified in the Seventh Schedule shall be ineligible to be appointed as an arbitrator.
7. In view of the mandate contained in Section 12(5) read with Schedule 7 of the Arbitration and Conciliation Act, 1996, admittedly, the arbitrators appointed by the respondents are ineligible to act as Arbitrators. Bearing in mind the amendment contained in Section 12(5) as well as Schedule 7 of the Arbitration and Conciliation Act, 1996, I deem it appropriate to appoint Sri Ashok L. Pujar, retired District Judge as the Arbitrator to adjudicate the dispute between the parties.
8. 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.
Sd/- JUDGE ST