- (1.) The two questions of law that arise for consideration in this appeal are if the refusal of an arbitrator to resign while not accepting the joint request of the parties to extend time for arbitration and leave it to them to decide their future course of action amounts to refusal to act by the arbitrator within the meaning of S. 8(l)(b) of the Arbitration Act (in brief 'the Act') and if it be so whether the power to appoint next arbitrator vests in the Court or it has once again to be in accordance with the procedure provided in the Agreement.
(2.) Dispute about settlement of claim in respect of construction of 250 bed hospital at Basudevpura having arisen between the respondent (contractor) and the appellant (Public Works Department of the State of West Bengal) the Chief Engineer nominated a Superintending Engineer as arbitrator in accordance with clause 25 of the agreement, relevant part of which runs as under :- "Except where otherwise provided in the contract all questions and disputes shall be referred to the sole arbitration of the Chief Engineer of the department. Should the Chief Engineer be for any reason unwilling or unable to act as such arbitrator, such questions and disputes shall be referred to an arbitrator to be appointed by the Chief Engineer". When despite 59 sittings the proceedings did not come to an end and the arbitrator entertained certain applications of the appellant at a belated stage the respondent sought his resignation for legal misconduct. The application was decided by the arbitrator by a detailed order with following observations:- "I have given my opinion that there has been no misconduct on any of the grounds before me by the learned claimant yet I am of the opinion justice delayed is justice denied and hence in this case there has been delay and the process in which the learned advocate of both the parties are leading and pleading the case delay is inevitable. If the claimant suffers from loss of confidence and apprehends miscarriage of justice from the arbitrator whose award is vital to him I shall not intend to interfere in his way of pursuit for justice. I, therefore, direct that further extension of time on consent of both the parties will not be allowed by me and the extended date of arbitration is being allowed to expire. As regards claimants humble prayer to me that I would be pleased to resign from the office. I am restraining myself in issuing any order as it concerns interest of both the parties and I leave it to both the parties to decide." With this order the respondent approached the Chief Engineer and sought for appointment of a retired Additional Chief Engineer named in the application as the sole arbitrator. The request was not accepted as according to the Chief Engineer the arbitrator appointed was still continuing. The respondent was however permitted to approach the Court for extension of time, the respondent, instead of filing application for extension of time, approached the Court of Asstt. District Judge under Section 12(2) of the Act for revoking authority of the sole arbitrator and filling the vacancy by appointing another arbitrator. The application was allowed as in the opinion of the Court the arbitrator in the circumstances of the case had refused to act. The order was challenged by way of application under Art. 227 of the Constitution. The application was dismissed as the inference drawn by the trial Court that the arbitrator refused to act was a plausible one. It is against this order that this appeal has been filed. It is not clear if during pendency of the application under Art. 227 in the High Court the appellant had applied for any interim order for stay of further proceedings before the arbitrator. However even if it was prayed for then it presumably was not granted as, admittedly, during pendency of the application the arbitrator appointed by the Asstt. Distt. Judge started the proceedings in which the Executive Engineer appeared but expressed his inability to participate in absence of any instruction from the department and also because the department had decided to challenge the order of the trial court before the High Court. In any case it is not disputed that the arbitrator, since, has given the award which has not been challenged by the department. May be the department might have been advised, that the finality of the award could be subject to decision of this appeal as if the appointment of the next arbitrator is held to be invalid the proceedings consequent to it shall fall automatically.
(3.) To decide if the court was justified in assuming jurisdiction to appoint another arbitrator as the arbitrator appointed by the Chief Engineer under clause 25 refused to act it is necessary to examine scope of Section 8(1)(b) of the Arbitration Act which reads as under :- Section 8(1) :In any of the following cases: (a) ......................... (b) If any appointed arbitrator or umpire neglects or refuses to act, or is incapable of acting, or dies, and the arbitration agreement does not show that it was intended that the vacancy should not be supplied and the parties or the arbitrators, as the case may be, do not supply the vacancy any party may serve the other parties or the arbitrators, as the case may be, with a written notice to concur in the appointment or appointments or in supplying the vacancy. This provision vests the Court with supervisory jurisdiction to interfere with relationship between the parties and the arbitrator if any of the situations as provided in this subsection comes into being. What was claimed by the respondent, which has been accepted by the Courts below is that the sole arbitrator appointed by the Chief Engineer refused to act. The question, therefore, is what does this expression mean Refusal to act in legal sense means denial to do something which one is obliged to do under law. Black's Law Dictionary explains it thus, 'the act of one who has, by law, a right and power of having or doing something of advantage, and declines it'. In private law, of which arbitration is a part which court's power to supervise and intervene in arbitral proceedings within statutory framework, an arbitrator who is appointed, with common consent of parties may not proceed with arbitration for various reasons. The refusal to act may be express or implied. If an arbitrator resigns or informs the parties his inability to act it would be express refusal. And even the courts cannot force him to arbitrate. In Shivcharan v. Rati Ram, (1884) ILR 7 Allahabad 20, when despite his refusal the Subordinate Judge directed the records to be sent back to the arbitrators to submit the award within ten days who, thereafter, made the same it was set aside by the High Court and it was held: "Expression has recently been given by this Court to the view that one of the most essential principles of the law of arbitration is that the adjudication of disputes by arbitration should be the result of the free consent of the arbitrator to undertake the duties of arbitrating between the contending parties who have agreed to respose confidence in his judgment. Indeed, the finality of such award is based entirely upon the principle that the arbitrators are judges chosen by the parties themselves, and that such judges are willing to settle the disputes referred to them. This essential characteristic of the effect of such adjudications is necessarily vitiated if compulsion is employed by the Court".;