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Bawana Infra Development Private Limited V/S Delhi State Industrial Infrastructure Development Corporation Limited

Company & Directors' Information:- P. S. INDUSTRIAL INFRASTRUCTURE LIMITED [Active] CIN = U70100WB2007PLC115796

Company & Directors' Information:- IN-STATE INFRASTRUCTURE PRIVATE LIMITED [Strike Off] CIN = U45201OR2011PTC014355

Company & Directors' Information:- P D INFRASTRUCTURE DEVELOPMENT CO LTD [Strike Off] CIN = U45206AS1995PLC004491

Company & Directors' Information:- J S INFRASTRUCTURE DEVELOPMENT (INDIA) PRIVATE LIMITED [Active] CIN = U70102MH2007PTC171627

Company & Directors' Information:- K G INFRA DEVELOPMENT PRIVATE LIMITED [Strike Off] CIN = U45204HR2010PTC041732

    Arb. P. 420/2016

    Decided On, 24 August 2016

    At, High Court of Delhi


    For Petitioner: Amit George and Swaroop George, Advocates And For Respondents: Kunal Kohli, Advocate.

Judgment Text

1. The Petitioner has filed the present petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereafter 'the Act') for appointment of an arbitrator.

2. The learned counsel for the Petitioner states that in terms of the 'Concession Agreement for Redevelopment and Management of Bawana Industrial Area in Delhi' (hereafter 'the Agreement') dated 20.07.2011, it is agreed that any disputes between the DSIIDC and the Concessionaire (i.e. the Petitioner) are to be resolved through arbitration in terms of the clause 19.3 of the Agreement. The said clause is reproduced as under:-

"Section 19.3 Arbitration

(a) Arbitrators

In the event the dispute or difference or claim, as the case may be, is not resolved, as evidenced by the signing of the written terms of settlement by the Parties within 30 (thirty) days of reference for amicable settlement and/or settlement with the assistance of Expert, as the case may be, the same shall be finally settled by binding arbitration under the Arbitration and Conciliation Act, 1996. The arbitration shall be by a sole arbitrator, appointed in accordance the following:

(i) DSIIDC shall provide to the Concessionaire a list of five arbitrators to be the sole arbitrator under this Agreement (the "Sole Arbitrator").

(ii) The Concessionaire shall select three arbitrators from the list provided by DSIIDC, and inform DSIIDC of its selection.

(iii) DSIIDC shall choose one arbitrator from amongst them, who will appointed as the Sole Arbitrator."

3. The petitioner states that certain disputes have arisen between the Petitioner and the Respondent in respect of the aforesaid agreement and, accordingly, same are to be resolved by arbitration. The learned counsel for the Respondent does not controvert the above; however, states that pursuant to the request made by the Petitioner, the Respondent has already appointed Shri S.B. Jhamb, Former Additional DG (Spl), CPWD as the Sole Arbitrator.

4. The learned counsel for the Petitioner points out that the request for appointment arbitrator was made on 16.05.2016. The Petitioner followed the said request by reminders and the final reminder was sent on 13.06.2016. Since the Respondent had failed and neglected to appoint an arbitrator, the Petitioner was constrained to file the present petition on 18.07.2016.

5. It is stated that after the present petition was filed, the respondent has appointed a sole arbitrator. The learned counsel for Petitioner has handed over the copy of the Respondent's letter dated 19.07.2016 appointing a sole Arbitrator. He submits that since the respondent did not appoint an arbitrator prior to filing of present petition, it has forfeited its right to do so.

6. The learned counsel for the Respondent has fairly not countered this position. The question whether the party will have the right to appoint the arbitrator after the expiry of a period of 30 days was considered by the Supreme Court in Datar Switchgear Ltd. v. Tata Finance Ltd : (2000) 8 SCC 151 wherein the Court held as under:-

"19. So far as cases falling Under Section 11(6) are concerned, such as the one before us, no time limit has been prescribed under the Act, whereas a period of 30 days has been prescribed Under Section 11(4) and Section 11(5) of the Act. In our view, therefore, so far as Section 11(6) is concerned, if one party demands the opposite party to appoint an arbitrator and the opposite party does not make an appointment within 30 days of the demand, the right to appointment does not get automatically forfeited after expiry of 30 days. If the opposite party makes an appointment even after 30 days of the demand, but before the first party has moved the Court under Section 11 that would be sufficient. In other words, in cases arising Under Section 11(6), if the opposite party has not made an appointment within 30 days of demand, the right to make appointment is not forfeited but continues, but an appointment has to be made before the former files application Under Section 11 seeking appointment of an arbitrator. Only then the right of the opposite party ceases. We do not, therefore, agree with the observation in the above judgments that if the appointment is not made within 30 days of demand, the right to appoint an arbitrator Under Section 11(6) is forfeited.

20. In the present case the respondent made the appointment before the appellant filed the application Under Section 11(6) though it was beyond 30 days from the date of demand. In our view, the appointment of the arbitrator by the respondent is valid and it cannot be said that the right was forfeited after expiry of 30 days from the date of demand.

21. We need not decide whether for purposes of Sub-clauses (4) and (5) of Section 11, which expressly prescribe 30 days, the period of 30 days is mandatory or not."

7. The aforesaid decision was also followed by the Supreme Court in a later decision in Punj Lloyd v. Petronet MHB Ltd. : (2006) 2 SCC 151.

8. In view of aforesaid settled law, it is clear that the Respondent had forfeited the right to appoint the arbitrator on the present petition being filed in the Court.

9. In the circumstances, J

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ustice R.C. Jain (Retd.), a former Judge of this Court, is appointed as a Sole Arbitrator to adjudicate the disputes between the parties arising out of the said agreement. The fees of the Arbitrator shall be fixed in accordance with Schedule IV of the Act. 10. The Registry is directed to send a copy of this order to Justice R.C. Jain (Retd.). 11. The parties may approach the Arbitrator for a preliminary hearing. 12. The petition is disposed of. 13. Copy of this order be given dasti to the parties under signature of the Court Master.