Full Judgment
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT THE HONOURABLE MR. JUSTICE T.R.RAVI THURSDAY, THE 29TH DAY OF FEBRUARY 2024 / 10TH PHALGUNA, 1945 PETITIONER: ESTEEM CONSTRUCTIONS, XIII/5 KOVILAKAM ROAD, KOTTAKKAL, KOTTAKKAL P.O, REPRESENTED BY ITS MANAGING PARTNER, RAJASANKARAN D, PIN - 676 501 BY ADV K.V.MANOJ KUMAR RESPONDENT: 1 THE SUPERINTENDING ENGINEER CENTRAL PUBLIC WORK DEPARTMENT M S BABURAJROAD,KALLAI, KOZHIKODE, PIN - 673 003 2 THE EXECUTIVE ENGINEER CENTRAL PUBLIC WORK DEPARTMENT M S BABURAJ ROAD, KALLAI, KOZHIKODE, PIN - 673 003 BY ADV M. JAYAKRISHNAN VAZHOOR THIS ARBITRATION REQUEST HAVING COME UP FOR ADMISSION ON 29.02.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: T.R.RAVI.J ------------------------------------------------------- AR.No.211 of 2023 -------------------------------------------------------- Dated this the 29th day of February, 2024
ORDER
The application has been filed praying for appointment of a sole arbitrator to decide on the disputes between the parties. Annexure A6 is an agreement regarding dispute resolution by arbitrator. According to the petitioner, Clause 25 in the said agreement says that disputes or differences shall be referred for adjudication through arbitration by a sole arbitrator appointed by the Chief Engineer, CPWD, in charge of the work or if there be no Chief Engineer, the Additional Director General of the concerned region of CPWD. The appointment of arbitrator by one of the parties to the contract is no longer possible and the clause can only be treated as an agreement regarding arbitration without the condition that the arbitrator shall be appointed by one of the parties to the dispute. The petitioner has invoked the arbitration clause and suggested the name of a Retired Judge as arbitrator.
2. The respondents have filed a counter affidavit
producing copy of the contract between the parties, in which it is contended that what has been produced by the petitioner is not the correct version and as per the amended version, the arbitration tribunal shall be a graduate engineer with experience in handling public works engineering contracts at a level not lower than Chief Engineer (Joint Secretary Level of Government of India). It is submitted that the above, is a mandatory qualification to be appointed as arbitrator. It is also contended that the petitioner had not approached the Additional Director.
3. Annexure 9 dated 03.10.2023 is a letter issued
by the respondent to the petitioner in reply to a letter dated 08.09.2023 sent by the petitioner. Annexure 9 specifically requests the petitioner to apply for appointment of arbitrator as per the proforma attached along with a letter for further necessary action. In view of the above said letter, it is not necessary to go into the contention whether the issue should be referred to an arbitrator. The arbitration clause is admitted. The only question that remains is whether the arbitrator to be appointed should be an Engineer or legally trained person. The contention raised by the petitioner is regarding the breach of contract which essentially comes within the realm of law. It is only technical aspects which may be required to gone into, that would require the help of an Engineer. The clause referred to by the respondents in support of the submission that only a graduate engineer should be appointed as arbitrator reads thus; “it is also a term of this contract that any member of the Arbitration Tribunal shall be a Graduate Engineer with experience in handling public works engineering contracts at a level not lower than Chief Engineer (Joint Secretary Level of Government of India). This shall be treated as a mandatory qualification to be appointed as arbitrator.’’ The agreement also says that if the tendered amount is Rs.100 crore or less, it shall be referred to arbitration through a sole arbitrator and wherever it is more, the tribunal shall consist of three arbitrators. The above clause is to be understood along with the requirement in the agreement that the arbitrator, either sole or a tribunal of three arbitrators, is to be appointed by the Chief Engineer/Additional Director/ Director General. What is contemplated is not a case where the arbitrator is appointed by the Court. Section 26 of the Arbitration and Conciliation Act, 1996, empowers the Arbitration Tribunal to take assistance of experts on specific issues which may have to be determined by the arbitrator. The purpose of an Engineering Graduate will be served by invoking Section 26, if it becomes necessary. I do not think that the said requirement should weigh with the Court while appointing an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996. The respondents also have a case that there is no arbitrable dispute since the procedure has not been followed by the petitioner prior to invoking the arbitration clause. In view of the
order dated 13.12.2023, by a Seven Judges Bench of the
Hon'ble Supreme Court, on a reference, in In Re: Interplay between Arbitration Agreements under the Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 1899 [2023 SCC OnLine SC 1666], this Court under Section 11 is only expected to go into the fact whether there is an arbitration clause which binds the parties. The above aspects are to be dealt with by the arbitrator appointed rather than Court under Section 11. In the above circumstances, following orders are issued;
(a) I nominate Mr.Justice N.K Balakrishnan (Former
Judge, High Court of Kerala) Punartham, Savitha Road, Near Kottankavu Temple, Vennala, Kochi - 682 028 as the sole Arbitrator to adjudicate and resolve the disputes and differences between the parties to this case.
(b) The Registry is directed to communicate a copy
of this order to the learned Arbitrator, within a period of two weeks from today and to obtain a Statement of Disclosure from him under Section 11(8) read with Section 12(1) of the Arbitration and Conciliation Act, 1996.
(c) Once the Disclosure Statement is obtained from
the learned Arbitrator, the Registry shall release the certified copy of this order, with a copy of the said statement appended to it, retaining the original of the same on the files of this case.
(d) The fees of the Arbitrator shall be governed by the Fourth schedule to the Arbitration and Conciliation Act, 1996.
(e) It open to the arbitrator to invoke Section 26
and seek assistance of a graduate engineer of the level contemplated in Clause 25 of the agreement between the parties, if it is found necessary or it is requested for by any of the parties.
(f) The Arbitrator may consider the question of
arbitrability and clause 25 as a preliminary issue if so requested for. Sd/- T.R.RAVI JUDGE sn APPENDIX OF AR 211/2023 PETITIONER’S ANNEXURES Annexure 1 A TRUE COPY OF AGREEMENT EXECUTED BETWEEN PETITIONER AND 1ST RESPONDENT. Annexure 2 THE SCHEDULE SHOWING HANDING OVER OF THE ACTUAL DATE WISE ALLOTMENT OF QUARTER IN RESPECT OF MS 1, 2, 3 & 4. Annexure 3 A TRUE COPY OF THE SHOWCASE NOTICE ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER DATED 20.07.2022 Annexure 4 TRUE COPY OF THE REPLY SENT BY THE PETITIONER TO THE 2ND RESPONDENT DATED 06.02.2023. Annexure 5 TRUE COPY OF THE NOTICE DATED 27.06.2023 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER. Annexure 6 TRUE COPY OF ARBITRATION CLAUSE IN ANNEXURE-1 CONTRACT
Annexure 7 TRUE COPY OF APPEAL DATED 15.07.2023 Annexure 8 TRUE COPY OF NOTICE DATED 08.09.2023 Annexure 9 TRUE COPY OF THE LETTER DATED 03.10.2023
ISSUED BY THE RESPONDENTS RESPONDENT ANNEXURES ANNEXURE R(A) A TRUE COPY OF THE AGREEMENT BETWEEN THE PETITIONER HEREIN AND THE RESPONDENTS