JUDGMENT
S.K. Agarwal, J.
1.
By this petition under Section 11(5) of the
Arbitration and Conciliation Act, 1996 (for short “the
Act”), petitioners have prayed for appointment of an
independent Arbitrator to adjudicate disputes between the
parties.
2. It is pleaded that applicant-M/s. Survi Projects
entered into a contract with the respondent-M/s. Veda
Research Lab Pvt. Ltd. on 31.1.1998 at Delhi for the
construction of a factory building at Plot No. D-97-98,
105-106, Greater Noida for the respondent; the stipulated
period for completion of the contract was seven months;
however, due to various alleged breaches committed by the
respondent in the contract, the work could not be
completed within the original stipulated time of
completion of the contract. The respondent took
possession of the building in October, 1999 and using the
same since then. It is pleaded that even though the
possession of the building was taken by the respondent as
early on October, 1999, but the final payment as well as
various other claims of the petitioner were not settled.
By letter dated 26.4.2001, petitioner called upon the
respondent to settle and pay various amounts due to the
petitioner, and the respondent failed to pay the claims.
Under Clause 37, it was agreed that all dispute arising
out of the contract are to be settled by arbitration. In
accordance with the arbitration agreement, the petitioner
first referred the disputes to the architect for his
decision with copy of the respondent. On these pleadings
the petitioner has prayed for appointment of the
arbitrator. The respondent has filed the reply, opposing
the application, inter alia pleading that the application
for appointment of the arbitrator is not maintainable in
as much as the applicant has not followed the procedure
prescribed under Clause 37 of the Agreement. In terms of
Clause 37 of the Agreement, in the event of respondent not
agreeing or consenting in the appointment of the
arbitrator suggested by the applicant, a panel of three
arbitrators is required to be appointed to adjudicate upon
the disputes between the parties to the agreement. The
applicant ought to have taken recourse to the said
procedure. The application as such is liable to be
dismissed.
3. Law with regard to appointment of the arbitrator
under Section 11 of the Act by the Chief Justice or his
designate is well settled. Section does not contemplate a
decision by the Chief Justice or his designate, on any
controversy between the parties. The decision to nominate
is not adjudicatory but is administrative. This Section
does not contemplated even a response from other party.
The only function of the Chief Justice or his designate
under Section 11(6) is to fill the gap left by a party to
the arbitration agreement. This is to enable the Arbitral
Tribunal to be expeditiously constituted and the
arbitration proceedings to commence. Reference in this
regard may be made to the Apex Court’s in Konkan Railways
Corporation Ltd. v. Rani Construction Pvt. Ltd., 2002
(1) Scale 465 and Konkan Railway Construction Corporation
Ltd. v. Mehul Construction Co., .
4. Learned counsel for parties after arguing the
matter for some time agreed that since the matter required
to be adjudicated is of technical nature, and as parties
have failed upon to refer the disputes to a single
arbitrator for arbitration, parties may be permitted to
nominate one arbitrator each who should be fellow of the
Indian Institute of Architect and some third independent
arbitrator be appointed by the court for expeditious
disposal of the claims or counter claims.
5. Accordingly, parties are directed to nominate their
respective Arbitrator within two weeks. Mr. K.P. Verma,
former District & Sessions Judge, Delhi, Flat No. 29,
“UTTARANCHAL”, Plot No. 5, Patparganj, Delhi-110092 is
hereby appointed as the third Arbitrator for the purpose
of adjudicating upon the claims and counter-claims of the
parties, along with two arbitrators one each nominated by
the parties. The Arbitrator shall fix his own fee.
With above direction, petition stands disposed
of. Copy of order be sent to the parties as well as to
the Arbitrator.