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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION NO. 482 OF 2009
M/s. Tirath Engineers,
34, Punit Nagar,
New Sama Road,
Baroda-390 008. ...Petitioner.
Vs.
1 Union of India, acting through
Dy. Chief Engineer (S & C),
Western Railway,
Near R. E. Office,
Pratapnagar, Vadodara-4.
2 Shri Anirudh Jain,
Ld. Umpire,
Divisional Railway Manager,
Central Railway,
Bhusaval. ...Respondents.
Ms. Shilpa Kapil for the Petitioner.
Mr. Suresh Kumar for the Respondent.
AND
ARBITRATION PETITION (LODGING) NO. 345 OF 2009
ALONG WITH
NOTICE OF MOTION NO. 1574 OF 2009
IN
ARBITRATION PETITION (LODGING) NO. 345 OF 2009
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Union of India, represented by
Dy. Chief Engineer (C),
Western Railway,
Pratapnagar,
Vadodara-390 004. ... Petitioner
Vs.
M/s. Tirath Engineers,
34, Punit Nagar,
New Sama Road,
Baroda-390 008. ...Respondent.
Mr. Suresh Kumar for the Petitioner.
Ms. Shilpa Kapil for the Respondent.
CORAM :- ANOOP V. MOHTA, J.
DATE OF RESERVING THE JUDGMENT :- 26TH NOVEMBER, 2009.
DATE OF PRONOUNCING THE JUDGMENT :- 21st JANUARY, 2010.
JUDGMENT-
1 Both the parties have challenged the impugned award dated 23rd
December, 2008 by invoking Section 34 of the Arbitration and Conciliation
Act, 1996 (for short, “The Arbitration Act”), though the Arbitration
proceedings based upon the agreement between the parties dated 1st
December, 1987 commenced on 24th January 1996, under the old
Arbitration Act of 1940. But, ultimately the award published on
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23rd December, 2008 by the umpire/ arbitrator.
3 The basic events are-
4 On 27/08/1987, the Respondent had invited tenders for the work of
construction of various structures in connection with providing facilities for
ROH repairs to tank wagon with roller bearing in sick lines at Karachiya
yard. The contract for said work was awarded to the Petitioner vide
Acceptance letter bearing No. Dy.CE/S & C/92 dated 27/08/1987. The
cost of the work was Rs.19,71,888.45/- with completion period of 12
months i.e. 26/08/1988 from the date of letter of Acceptance.
5 On 01/12/1987, accordingly, Contract Agreement No. Dy.CE/CA/57
dated 01/12/1987, was entered into by and between the parties.
6 On 15/09/1987, accordingly, the Petitioner has mobilized adequate
resources at site to commence the work. Since the Respondent has not
issued all drawings to take up the work immediately the Petitioner had
addressed a letter dated 15/09/1987, to the Respondents requesting the
Respondents to issue all the drawings.
7 On 21/09/1987, the Petitioner again reminded the Respondents vide
their letter dated 21/09/1987 to issue the drawings which have not been
finalized by the Respondents till that date.
8 On 05/10/1987, the Petitioner started the work and had completed
the excavation of building foundation by 05/10/1987. The Petitioner also
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requested the Respondents in letter dated 05/10/1987, for getting the line
layout for the main column foundations to enable the Petitioner to take up
the excavation of main columns foundation. The Petitioner also requested
to the Respondents to get the lines also blocked to take up the further work
of foundation on main columns.
9 On 06/10/2008, the Respondent had furnished some of the drawings
pertaining to the work with their letter dated 06/10/2008 and again issued
the revised drawing showing the foundation details of main column with
their letter dated 19/10/1987. Thereafter, also the Respondents had issued
the drawings to the Petitioner. 05/10/1987, the Respondent has
abnormally delayed the issuing of the working drawings.
10 On 31/01/1990, since the original contract period expired on
26/08/1988, the Petitioner applied for extension of time subject the to
Respondents approving revised rates due to delay and various breaches of
contract committed by them. The contract was extended up to
31/01/1990. Ultimately, the contract was wrongfully taken away by the
Respondent from the Petitioner on 02/01/1990. The Petitioner has carried
out the work value of Rs. 16,34,044/- (almost 85%).
The various differences had arisen between the parties due to various
issues like non issuance of contracted drawings which resulted in the work
being prolonged, delay in removing High Tension lines from the work site
which had given rise to dispute and differences between the parties, which
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has further given rise to invocation of Arbitration Clause by the Petitioner.
11 On 05/10/1991, the Petitioner has addressed a letter dated
05/010/1991 to the General Manager of Respondent requesting him to
appoint the Arbitrator as contemplated in clause 64 of the General
Conditions of Contract. Since the General Manager of the Respondent
failed to appoint the Arbitrators in the matter the Petitioner filed a
Arbitration Suit No. 1911 of 1992 in this Hon’ble High Court. The Hon’ble
Court directed the Respondents to appoint the Arbitrators in the matter.
12
On 28/08/1996, accordingly, the General Manager appointed Shri
M.S. Ekbote, the then Chief Track Engineer (HQ), Churchgate and Shri S.B.
Kulkarni as Joint Arbitrators vide General Manager’s letter dated
28/08/1996. Thereafter, the Respondent had changed the Arbitrators
many times and ultimately Smt. Rashmi Kapoor and Shri. J.C. Parihar were
appointed and they nominated Shri Anirudh Jain as Umpire.
13 On 29/10/2004, thereafter, the Joint Arbitrators held various
meetings in the matter but they had not published the Award and the
Umpire declined to proceed in the matter, ultimately the Petitioner again
approached this Hon’ble High Court, vide Application No. 52 of 2004 for
removal of the Umpire and appointment of new Umpire. The Hon’ble
Court disposed of the Application on 29/10/2004, directing the parties to
appear before the Umpire and at the same time it directs the Joint
Arbitrators to publish the Award within three months.
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14 On 26/02/2005, the Joint Arbitrators published their Award on
26/02/2005.
15 On 21/11/2005, the Petitioner filed an Arbitration Petition No. 324
of 2005 in this Hon’ble Court for setting aside the Award passed by the
Joint Arbitrators Smt. Rashmi Kapoor and Shri J.C. Parihar. The Hon’ble
Court vide its order dated 21/11/2005 disposed of the aforesaid
Arbitration Petition by setting aside the said Award and directing Shri
Anirudh Jain, the Umpire to take over the Arbitration Proceedings and
make the Award as expeditiously as possible, in accordance with law.
16 On 23/12/2008, the Umpire has held various meetings and
published the Award. Being aggrieved by the Award dated 23rd December,
2008, the Petitioner seeks to challenge the Award.
17 Hence this Petition.
18 The Respondent, Union of India has also filed the Petition under
Section 34 of the Arbitration Act, along with Notice of Motion for
condonation of delay by relying on the following paragraph.
19 The Award is challenged under Section 34 of the Arbitration Act, in
view of the fact that the Respondents themselves have challenged the
award dated 26/02/2005, passed in the Contract No. CE/CA/57 dated
01/12/1987 in Arbitration Petition No. 324 of 2005, wherein in Paragraph
No. 9 of the said Petition, the Respondent made the following averments
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as:
“The petitioners submit that the Arbitral Tribunal was
constituted under the provisions of Arbitration Act, 1940 and
the proceedings were conducted as per the provisions of the
Arbitration Act, 1940. The petitioners submit that as per the
clause 64 of the General Conditions of Contract, the
modification/ enactments of the Arbitration Act, 1940 are
applicable and as such the impugned award is challenged
under the provisions of Arbitration and Conciliation Act,
1996.”
20 The said petition was disposed of by this Hon’ble High Court vide
order dated 21/11/2005. In view of pendency of above Petition, under
Section 34 of the Arbitration Act, on the fact that the award dated
23/12/2008 was received on 30/12/2008, therefore, the Petition is filed
along with the Notice of Motion on 8th April, 2009.
21 The Petition under Section 34 of the Arbitration Act is not
maintainable against the impugned award which was basically passed by
the Arbitrator empowered under the Old Act of 1940, as the parties
throughout participated before the Arbitrator and the Arbitrator also
proceeded as per the old Act. Admittedly, the Arbitration Proceeding
commenced on 24th January, 1996.
22 This is in view of the clear provision of Section 85 of the Arbitration
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Act, 1996 which is reproduced as under-
“S. 85. Repeal and saving.- (1) The Arbitration (Protocol and
Convention) Act, 1937 (6 of 1937), the Arbitration Act, 1940
(10 of 1940) and the Foreign Awards (Recognition andEnforcement) Act, 1961 (45 of 1961) are hereby repealed.
(2) Notwithstanding such repeal,-
(a) the provisions of the said enactments shall apply in
relation to arbitral proceedings which commenced before this
Act came into force unless otherwise agreed by the parties but
this Act shall apply in relation to arbitral proceedings whichcommenced on or after this Act comes into force.”
23
Section 85(2) (a) corresponds to Section 48 of the Arbitration Act of
1940 and Section 84(1) of the English Arbitration Act, 1996.
24 It is clear from the above provisions that the Arbitration Act, 1940
shall continue to apply to the Arbitration Proceedings which commenced
after invocation of the Arbitration agreement between the parties prior to
24th January, 1996. In the present case, there is nothing to show that the
parties have agreed to be governed by the Arbitration Act, 1996 at any
point of time. (State of Goa Vs. Chinna Nachimuthu Constructions,
2008(3), Arb. L.R. 220 (Bom) DB. (2) Radhey Shyam Assoc. Vs. State of
Maharashtra, 2008 (3) Arb. LR 216 (Bom). (3) Gammon India Ltd. Vs.
Sheth Estate Development Pvt. Ltd., 2006 (2) Arb. L.R. 194 (Guj.) (D.B.)
(4) DDA V. S. Kumar, 2008 (3) Arb. L.R. 290 (Del) (DB).
25 The Apex Court in Thyssen Stahlunion GMBH Vs. Steel Authority
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of India Ltd., (1999) 9 S.C.C. 334, referring to the earlier Judgment of
Shetty’s Constructions Co. (P) Ltd. Vs. Konkan Rly. Construction, (1998)
5 S.C.C. 599, reiterated that when the Arbitration Proceeding commenced
before the Arbitration and Conciliation Act, 1996, which came into force on
25th January, 1996, would be enforced under the provisions of the
Arbitration Act, 1940. As at the time of commencement of Arbitration
proceedings, in the present case, the old Act was enforced. Even after the
commencement of the new Act, the parties never agreed to be governed by
the new Act. On the contrary, the parties and the Arbitrators proceeded on
the basis of old Act.
26 Section 14 of the Old Act provides for the award to be signed and
filed. Both the Acts are comparatively different on this aspects. The
challenge to the award and/or the enforcement of the award would be
governed by the old Act, only.
27 The orders, even if any, passed by the Court in the present
proceedings as referred above, it cannot be read to mean that after 1996, in
an Arbitration proceedings which commenced on the basis of old Act, is
now required to be proceeded with or governed by the new Act, specially
when the provisions of the old Act, in the present facts and circumstances
and in view of Section 85 of the Arbitration Act, 1996 itself, is governed by
the old Act, (Niraj Munjal Vs. Atul Grover, (2005) 5 S.C.C. 404.)
28 In view of above, in my view, the Arbitration Petitions as filed by
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invoking Section 34 of the Arbitration Act, 1996 challenging the award
dated 23rd December, 2008, in the present facts and circumstances are not
maintainable. The remedy is elsewhere.
29 Resultantly, the Arbitration Petition No. 482 of 2009, as well as,
Arbitration Petition (L) No. 345 of 2009 and the Notice of Motion No. 1574
of 2009 filed by the Union of India, against the same award dated 23 rd
December, 2008, is also not maintainable, therefore, dismissed. No order as
to costs.
ig (ANOOP V. MOHTA, J.)
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