Decided on July 06,2012

Naithani International Appellant


BARIN GHOSH, J. - (1.) IT appears that in respect of a works contract or in connection therewith a bank guarantee was furnished by the applicant in favour of the respondent. The respondent purported to take steps to invoke the said guarantee and that resulted in filing of an application under Section 9 of the Arbitration and Conciliation Act, 1996, whereon many orders have been passed. In the meantime, the bank guarantee was in fact invoked by the respondent, but the bank refused to pay the amount of the bank guarantee to the respondent. A writ petition was filed challenging the said action on the part of the bank, which writ petition having been dismissed, an appeal, against the order of dismissal of the writ petition, is pending in this Court. In the circumstances, it appears that the claim, if any, of the respondent has not crystallized and, as such, respondent, despite being called upon to nominate, has not nominated its Arbitrator in terms of the arbitration agreement though the applicant nominated its arbitrator as far back as on 24th September, 2011. The said action on the part of the respondent has compelled the applicant to approach this Court.
(2.) I , accordingly, dispose of this arbitration application by appointing Mr. V.K. Gupta, retired Chief Justice of this Court as Arbitrator to adjudicate upon the disputes raised by the applicant resulting in a claim of Rs. 26,09,56,608/ - plus interest thereon. The counter claim, if any, of the respondent is not specifically referred to the said Arbitrator at this stage.
(3.) FOR adjudicating the aforementioned claim of the applicant, the Arbitrator shall be entitled to a gross remuneration of Rs. 13 lacs to be paid half and half by the parties hereto. Fifty per cent thereof shall be paid at the commencement of the arbitration proceeding and the remaining fifty per cent at the close of the arbitration, i.e. immediately before the award is made. In the event for the fault on the part of the Arbitrator, arbitration proceedings can not be closed by making and publishing an award, Arbitrator shall be obliged to refund the advance remuneration to be paid to him. It shall be open to the respondent to place before the Arbitrator its counter claim. In the event such counter claim is placed, applicant shall not be entitled to raise any objection as regards adjudication thereof by the Arbitrator. 0.5 per cent of such claim shall be the additional remuneration of the Arbitrator to be paid in the same manner as indicated above.;

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