{"id":61464,"date":"2007-08-21T00:00:00","date_gmt":"2007-08-20T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/you-one-maharia-a-jv-thr-you-one-vs-national-highways-authority-of-on-21-august-2007"},"modified":"2017-10-06T23:42:52","modified_gmt":"2017-10-06T18:12:52","slug":"you-one-maharia-a-jv-thr-you-one-vs-national-highways-authority-of-on-21-august-2007","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/you-one-maharia-a-jv-thr-you-one-vs-national-highways-authority-of-on-21-august-2007","title":{"rendered":"You One Maharia \u00c3\u00bb Jv Thr.You One … vs National Highways Authority Of … on 21 August, 2007"},"content":{"rendered":"
Supreme Court of India<\/div>\n
You One Maharia \u00c3\u00bb Jv Thr.You One … vs National Highways Authority Of … on 21 August, 2007<\/div>\n
Author: C Thakker<\/div>\n
Bench: C.K. Thakker<\/div>\n
           CASE NO.:\nArbitration Petition  12 of 2007\n\nPETITIONER:\nYOU ONE MAHARIA  JV THR.YOU ONE ENG.& CONSTRUCTION CO.LTD. & ANR\n\nRESPONDENT:\nNATIONAL HIGHWAYS AUTHORITY OF INDIA\n\nDATE OF JUDGMENT: 21\/08\/2007\n\nBENCH:\nC.K. THAKKER\n\nJUDGMENT:\n<\/pre>\n
J U D G M E N T<\/p>\n
C.K. THAKKER, J.\n<\/p>\n
\tThis petition is filed by the petitioners under Section
\n11(6) and Section 11(12) of the Arbitration and
\nConciliation Act, 1996 (hereinafter referred to as the Act)
\nread with paragraph 2 of the Appointment of Arbitrators
\nby the Chief Justice of India Scheme, 1996 for
\nappointment of Third\/Presiding Arbitrator in accordance
\nwith the Agreement\/Contract Package No. NS-23\/AP
\ndated May 31, 2001 entered into between the petitioners
\nand the respondent.\n<\/p>\n
\tThe petitioners are a Joint Venture who came
\ntogether by virtue of Joint Venture Agreement dated May
\n10, 2001 for execution of certain contracts for National
\nHighways Authority of India (NHAI for short). Petitioner
\nNo.1 is a Company registered under the Laws of the
\nRepublic of Korea having its registered office at 75-95,
\nSeosomoon Dong, Chung Ku, Seoul, Korea 100 110.
\nOriginally it was known as YOU ONE Engineering and
\nConstruction Co. Ltd. at the time of Joint Venture
\nAgreement and also at the time of contract dated May 31,
\n2001 with NHAI. The Company has since merged with
\nand known as Ultra Construction and Engineering Co.
\nLtd., Seoul, Korea; i.e. in a country other than India
\nwithin the meaning of Section 2(f)(ii) of the Act. Petitioner
\nNo.2 is a Private Limited Company incorporated and
\nregistered under the Companies Act, 1956 having its
\nregistered office at A-10, Panchvati, Azadpur, Delhi 110\n<\/p>\n
033.
\n\tAccording to the petitioners, they entered into an
\nAgreement on May 31, 2001 with the respondent for
\nexecution of Contract Package No. NS-23\/AP being a
\nproject for 4-Laning of KM. 464.000 to KM. 474.000 of
\nNagpur-Hyderabad section and KM. 9.400 and KM.
\n22.300 of Hyderabad-Bangalore section of National
\nHighway 7 in the State of Andhra Pradesh at a contract
\nprice of Rs.74,88,79,544.69. The Agreement contains an
\narbitration clause which I will refer to at an appropriate
\nstage.\n<\/p>\n
\tAccording to the petitioners, in September, 2004,
\ni.e. after more than three years of Contract-Agreement, it
\nwas alleged by the respondent that the petitioners had
\nfurnished forged Bank Guarantees for availing
\nmobilization and other advances under the Contract
\nAgreement. The respondent, in view of the Arbitration
\nClause, filed OMP No. 342 of 2004 in the High Court of
\nDelhi against the petitioners under Section 9 of the Act
\nfor interim relief. The High Court passed interim
\ndirections restraining the petitioners from removing
\nand\/or transferring machinery and stock placed by them
\nat the site for execution of work. On December 13, 2004,
\nthe respondent invoked Clause 59 of the Agreement and
\nterminated the contract. There was exchange of letters
\nand notices between the parties. Ultimately, by a
\ncommunication dated April 7, 2005, the petitioners
\nintimated the respondent that in accordance with the
\nArbitration Clause, they had appointed Honble Mr.
\nJustice A.K. Srivastava, a retired Judge of the High Court
\nof Delhi as their nominee Arbitrator. According to the
\npetitioners, in the second half of June, the respondent
\naddressed a letter to Mr. C.S. Balaramamurthi,
\npurported to have been written on April 7, 2005
\nappointing him as the nominee Arbitrator of NHAI. From
\nthe record, it appears that the two Arbitrators could not
\nagree to an appointment of Third Arbitrator. The
\nrespondent intended to appoint a technical man as the
\nThird Arbitrator as the matter was of a highly technical
\nnature, but the arbitrator appointed by the petitioners
\ninsisted that the Presiding Arbitrator should be a retired
\nChief Justice or a Judge of a High Court, who should be
\nsenior to him (Justice Srivastava). It is also on record
\nthat the respondent appointed Mr. K.P. Mohanty as the
\nPresiding Arbitrator. Subsequently, however, his
\nappointment was not continued. In February, 2006,
\nJustice Srivastava had shown his unwillingness to
\ncontinue as Arbitrator and the petitioners nominated
\nHonble Mr. Justice V.A. Mohta, retired Chief Justice of
\nHigh Court of Orissa as their nominee Arbitrator in place
\nof Justice Srivastava. Since the parties could not agree as
\nto appointment of Third\/Presiding Arbitrator, the
\npetitioners have filed the present petition praying therein
\nthat the Chief Justice of India may be pleased to appoint
\na retired Judge of the Supreme Court of India or a retired
\nChief Justice of a High Court as Presiding Arbitrator. The
\nHonble Chief Justice of India designated me to deal with
\nthe matter and to pass an appropriate order on the
\napplication. Accordingly the petition was placed before
\nme.\n<\/p>\n
\tOn January 24, 2007 notice was issued. Affidavits
\nand further affidavits had been filed by the parties.
\n\tI have heard learned counsel on both the sides.
\n\tThe learned counsel for the petitioners submitted
\nthat the respondent-NHAI ought to have agreed to
\nappoint a retired Judge of the Supreme Court or a retired
\nChief Justice of a High Court as Presiding\/Third
\nArbitrator. It was submitted that when the petitioners
\nhave nominated a retired Chief Justice of a High Court as
\ntheir Arbitrator, the respondent ought to have considered
\nthe said fact and ought to have agreed to nominate a
\nJudge, senior in rank to the Arbitrator appointed by the
\npetitioners. It was also submitted that the dispute relates
\nto interpretation of terms and conditions of the contract
\nand there is no technical element which requires
\nappointment of a technical man. It was also stated that
\nin similar circumstances, between the same parties, a
\ndispute had arisen earlier, arbitration petitions were filed
\nbefore the Chief Justice of High Court of Delhi and the
\nnominee of the Chief Justice had appointed Honble Mr.
\nJustice Arun Kumar, retired Judge of this Court as the
\nPresiding Arbitrator. In the instant case also, such a
\ncourse ought to have been adopted by the respondent.
\nSince it was not done, the petitioners are constrained to
\napproach this Court.\n<\/p>\n
\tThe learned counsel for the respondent, on the
\nother hand, submitted that the relevant clause empowers
\nthe Council of Indian Road Congress (IRC for short) to
\nappoint Presiding Arbitrator in case of failure of the two
\nArbitrators to appoint Third Arbitrator. Since two
\nArbitrators appointed by the parties (the petitioners on
\nthe one hand and the respondent on the other hand)
\ncould not arrive at a consensus, it is the power of IRC to
\nappoint a Third Arbitrator and the petition is liable to be
\ndismissed. It was also submitted that a similar question
\ncame up for consideration before this Court between the
\nsame parties in YOU ONE Engineering & Construction Co.
\nLtd. & Anr. v. National Highways Authority of India,<\/a>
\n(2006) 4 SCC 372 and this Court has held that it is the
\nright of IRC to appoint Third Arbitrator and the
\npetitioners could not insist for a particular Arbitrator.
\nRegarding the order passed by the Nominee of the Chief
\nJustice of High Court of Delhi, it was submitted that it
\nwas an agreed order and the respondent had consented
\nto in appointing Honble Mr. Justice Arun Kumar, retired
\nJudge of this Court as the Third Arbitrator. The said
\ndecision, therefore, does not help the petitioner. It was
\nalso urged that the question is of highly technical nature
\nand hence IRC is insisting to appoint a technical man as
\nthe Third\/Presiding Arbitrator. It was, therefore, prayed
\nthat the petition be dismissed.\n<\/p>\n
\tHaving considered rival contentions of the parties
\nand having gone through the Agreement and Arbitration
\nClause, I am of the view that the prayer of the petitioners
\ncannot be granted. It is not in dispute that the
\nAgreement, dated May 31, 2001 contains an Arbitration
\nClause (Clause 3). The relevant part of the said Clause
\nreads thus:\n<\/p>\n
In case of dispute or difference arising
\nbetween the employer and a domestic
\ncontractor relating to any matter arising out
\nof or connected with this Agreement, such
\ndispute or difference shall be settled in
\naccordance with the Arbitration and
\nConciliation Act, 1996. The Arbitral
\nTribunal shall consist of 3 Arbitrators, one
\neach to be appointed by the employer and
\nthe contractor. The third arbitrator shall be
\nchosen by the two arbitrators so appointed
\nby the parties and shall act as Presiding
\nArbitrator. In case of the failure of the
\ntwo arbitrators appointed by the parties
\nto reach upon a consensus within a
\nperiod of 30 days from the appointment
\nof the arbitrator appointed
\nsubsequently, the Presiding Arbitrator
\nshall be appointed by the Council of
\nIndian Road Congress.\n<\/p>\n
\t\t\t\t      (emphasis supplied)<\/p>\n
     A bare reading of the above clause leaves no room
\nfor doubt that in case of failure of the two Arbitrators
\nappointed by the parties to reach upon a consensus, the
\nPresiding Arbitrator shall be appointed by the Council of
\nIRC.\n<\/p>\n
     It may be stated at this stage that when the matter
\nwas placed before me on April 24, 2007, the parties
\ninvited my attention to the aforesaid clause and it was
\nsubmitted that no consensus could be arrived at by the
\nparties. Considering the fact situation and the
\nAgreement, I thought it proper that the parties should
\nundertake fresh exercise in the direction. I accordingly
\npassed an order to make one more attempt.
\nUnfortunately, however, the effort could not succeed and
\nboth the counsel stated that the matter will have to be
\ndecided on merits. Accordingly, the matter was heard.\n<\/p>\n
     In my opinion, the learned counsel for the
\nrespondent is right that apart from clear language of
\nArbitration Clause, the point is also covered by YOU ONE
\nEngineering. Almost in identical circumstances, this
\nCourt was called upon to consider the provisions of the
\nAct and the right of the respondent to appoint Presiding
\nArbitrator under the Agreement. The Court held that it is
\nthe right of IRC to appoint Presiding Arbitrator in case
\nthe parties are not ad idem in appointment of
\nThird\/Presiding Arbitrator.\n<\/p>\n
     This Court stated:\n<\/p>\n
The arbitration agreement clearly envisages
\nthe appointment of the presiding arbitrator by
\nIRC. There is no qualification that the
\narbitrator has to be a different person
\ndepending on the nature of the dispute. If the
\nparties have entered into such an
\nagreement with open eyes, it is not open to
\nignore it and invoke exercise of powers in
\nSection 11(6).\n<\/p>\n
\t\t\t\t\t (emphasis supplied)<\/p>\n
     It is, no doubt, true that the High Court of Delhi has
\nappointed Honble Mr. Justice Arun Kumar, retired
\nJudge of this Court as Presiding Arbitrator in OMP No.
\n342 of 2004 vide its order dated May 22, 2006. The said
\norder is on record of this case. Three paragraphs of the
\nsaid order are important and they read as under:
\n3.\tLearned counsel for the parties jointly
\nstate that whole issue can be sorted
\nout by having a panel of three arbitrators, with
\none arbitrator as nominated by
\neach of the parties and the presiding arbitrator
\nto be appointed by this Court
\nwith the joint consent of the learned counsel
\nfor the parties. It may be
\nnoticed that as on date the petitioner has
\nnominated Mr.L.R.Gupta, Director
\nGeneral Works, CPWD (Retd.) while
\nrespondent has nominated Justice S.B.Wad
\n(Retd.). Justice S.B.Wad was nominated in
\nplace of Justice A.K.Srivastava
\n(Retd.), who expressed his inability to act as an
\narbitrator.\n<\/p>\n
4.\tLearned counsel for the parties
\npropose that Justice Arun Kumar (Retd.
\nJudge of the Supreme Court), 10, Krishna
\nMenon Marg, New Delhi – 110 001 (Phone :
\n2301-2175) be appointed as the presiding
\narbitrator and arbitral tribunal be
\nconstituted accordingly.\n<\/p>\n
5.\tThe constitution of the presiding
\narbitrator and arbitral tribunal as
\nproposed by learned counsel for the parties
\nis accepted by this Court and the said
\ntribunal shall proceed to enter upon reference
\nand determine the dispute between
\nthe parties. Ordered accordingly. The
\nconstitution of the tribunal be Justice
\nArun Kumar (Retd.) as the presiding arbitrator,
\nMr.L.R. Gupta and Justice S.B. Wad
\n(Retd.) as the two other members of the
\narbitral tribunal. The fee shall be
\nfixed by the tribunal itself.\n<\/p>\n
\t\t\t\t         (emphasis supplied)<\/p>\n
     The learned counsel for the respondent was right
\nwhen he submitted that the order was based on consent
\nof the parties. As in the present case, there is no such
\nconsent, the Court has to consider the matter by
\ninterpreting an Arbitration Clause. Clause 3, as observed
\nearlier, is explicitly clear and there is no ambiguity.
\nAgain, the controversy is decided by this Court in YOU
\nONE Engineering. In my view, therefore, the petitioners
\ncannot compel the respondent to agree for a retired
\nJudge of this Court or retired Chief Justice of a High
\nCourt, senior to Honble Mr. Justice Mohta as Presiding
\nArbitrator.\n<\/p>\n
     It was finally submitted that even if this Court is of
\nthe view that no such direction can be issued or order
\ncan be passed, it may be appreciated that the petitioners
\nhave chosen a retired Chief Justice of a High Court as
\ntheir Arbitrator and appropriate observations may be
\nmade so that IRC may appoint retired Judge of this Court
\nor a retired Chief Justice of a High Court to be the
\nPresiding Arbitrator. That would enable the petitioners to
\navail services of an Arbitrator appointed by them.\n<\/p>\n
     I appreciate the anxiety of the petitioners. In my
\nview, however, when the Arbitration Clause is clear and
\nthe point is concluded by a decision of this Court, it
\nwould not be proper on my part to make any such
\nobservation. It is, however, open to the respondent to
\ntake an appropriate decision in the matter keeping in
\nview the facts in their entirety. I may only state that this
\ndecision will not inhibit the respondent in taking any
\ndecision as it thinks fit.\n<\/p>\n
     In view of the above legal position, I express no
\nopinion on the contention of the parties as to whether the
\ncontroversy raised is or is not of a technical nature.
\nSince it is not necessary for me to enter into that
\nquestion, I leave the matter there.\n<\/p>\n
     For the foregoing reasons, the application deserves
\nto be dismissed and is accordingly dismissed, however,
\nleaving the parties to bear their own costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India You One Maharia \u00c3\u00bb Jv Thr.You One … vs National Highways Authority Of … on 21 August, 2007 Author: C Thakker Bench: C.K. Thakker CASE NO.: Arbitration Petition 12 of 2007 PETITIONER: YOU ONE MAHARIA JV THR.YOU ONE ENG.& CONSTRUCTION CO.LTD. & ANR RESPONDENT: NATIONAL HIGHWAYS AUTHORITY OF INDIA DATE OF […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-61464","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nYou One Maharia \u00c3\u00bb Jv Thr.You One ... vs National Highways Authority Of ... on 21 August, 2007 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/you-one-maharia-a-jv-thr-you-one-vs-national-highways-authority-of-on-21-august-2007\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"You One Maharia \u00c3\u00bb Jv Thr.You One ... vs National Highways Authority Of ... on 21 August, 2007 - 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