IN THE HIGH COURT OF KERALA AT ERNAKULAM
AR.No. 10 of 2008()
1. C.ALEX, S/O.CHACKO, AGED 52,
... Petitioner
Vs
1. THE GENERAL MANAGER, SOUTHERN RAILWAY,
... Respondent
2. THE CHIEF ENGINEER (CONSTRUCTION),
For Petitioner :SRI.V.J.JOSEPH
For Respondent :SRI.N.B.SUNIL NATH,SC, RAILWAYS
The Hon'ble MR. Justice THOTTATHIL B.RADHAKRISHNAN
Dated :25/06/2009
O R D E R
THOTTATHIL B.RADHAKRISHNAN, J.
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A.R.No.10 OF 2008
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Dated this the 25th day of June, 2009
O R D E R
1.This is a request made under Section 11(6) of the Arbitration
Conciliation Act, 1996. The request is filed and registered
with this Court on 7.3.2008.
2.There is no dispute between the parties that there is an
arbitration agreement between them as defined in Section 2(1)
(b) of the Act. The arbitration clause classifies the contracts
on the basis of the value of the claims in relation to which
arbitration is sought for. If the claims are above Rs.10 lakhs,
the agreement provides for an Arbitral Tribunal consisting of
a panel of three Gazetted Railway Officers, not below JA grade
or two Gazetted Railway Officials not below JA grade and a
Railway Officer retired not below the rank of SAG officer as
the arbitrators. For that purpose, the Railways have to send a
panel of more than three names of Gazetted Railway Officers
of one or more departments of the Railways, which may also
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include the name(s) of retired Railway Officer(s) empaneled to
work as Railway Arbitrator to the Contractor within 60 days
from the date when a written and valid demand for arbitration
is received by the General Manager. The Contractor will be
asked to suggest to the General Manager up to two names out
of the panel for appointment as Contractor’s nominees within
30 days from the date of dispatch of the request by the
Railways. The General Manager has to appoint at least one
out of them as the Contractor’s nominee and will also
simultaneously appoint the balance number of arbitrators
either from the panel or from the Presiding Arbitrator from
amongst the three arbitrators so appointed. The General
Manager shall complete this exercise of appointing the
Arbitral Tribunal within 30 days from the receipt of the names
of the Contractor’s nominees.
3.On 21.5.2007, the petitioner placed his claims before the
General Manager. Though the opening clause in the
arbitration agreement provides for the Railways to give its
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reply to it and the entitlement of the Contractor to claim for
appointments of arbitrator and for recourse to arbitration,
either on being dissatisfied by the reply of the Railways or on
the failure of the Railways to answer, what was done following
the raising of claims on 7.12.2007 was that the list of names of
four officers of the Railways was forwarded to the Contractor
for him to select two of them. Following that, on 31.12.2007,
the Contractor notified the names of Sri.A.K.Sinha and
Sri.V.G.Suresh Kumar, two among those who were included in
the list given by the Railways on 7.12.2007. Thereafter,
nothing happened till the institution of this arbitration request
on 7.3.2008. After this request was registered with this Court
on 7.3.2008, the Railways appointed a three member Arbitral
Tribunal on 2.4.2008.
4.With the aforesaid facts, the petitioner stands to say that
following the judgment of the Apex Court in Datar Switch
Gears Ltd. v. TATA Finance Ltd. [(2000) 8 SCC 151] and the
Division Bench of this Court in Divisional Railway Manger v.
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West Cost Agencies [2005(2) KLT 734], the Railways did not
have the right to make any appointment of arbitrator on
2.4.2008 after the registration of this arbitration request on
7.3.2008 and any right to make appointment had ceased by the
institution of this arbitration request. In West Cost
Agencies(supra), this Court specifically dealt with the
provisions in the General Conditions of contract of the
Railways, particularly clause 64, which is the arbitration
agreement in the case in hand also. Following the enunciation
of law in paragraphs 11 and 12 of that judgment and the ratio
of Datar Switch Gears Ltd (supra), quoted and relied on by
this Court in West Cost Agencies, the submission of the
petitioner stands. Under such circumstances, the appointment
purported to have been made by the Railways on 2.4.2008 is
no appointment and that exercise is one without authority in as
much as the appointment was made after the power to do so
has ceased in terms of the law laid in Datar Switch Gears
Ltd .
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5.With the aforesaid, the appointment procedure agreed upon by
the parties has failed and necessary measure in terms of
Section 11(6) of the Act needs to be taken as the guideline for
the choice of the arbitrator being that provided in Sub section
8 of Section 11. The appointment procedure in clause 64 of
the General Conditions of contract of the Railways does not
insist appointment of any person with any specified specilised
qualification or expertise in the filed of Engineering,
Accounting etc. It only insists on the appointment of a
Gazetted Railway Officer of a particular rank. That is
sufficient guideline to hold that no expertise of any peculiar
nature is required for the appointment. The subject matter of
the contract is the work of doubling of railway line between
Kollam and Trivandrum. I do not find any ground as to why a
former Judge of this Court is not to be appointed as an
arbitrator.
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6. For the aforesaid reasons, this arbitration request is allowed
appointing Mr.Justice T.V.Ramakrishnan, former Judge of this
Court as the arbitrator.
Sd/-
THOTTATHIL B.RADHAKRISHNAN,
Judge.
kkb.30/6.