- (1.) This arbitration petition is for appointment of Arbitrator. Mr. Bose, learned senior advocate appears on behalf of petitioner and draws attention to arbitration agreement by clause 22 in the agreement between parties. Said clause is reproduced below: Clause 22: "All disputes and differences in any manner between the parties hereto relating to and/or connected with this agreement shall be referred to the Sole Arbitrator, Sri Jagdish Prasad Chachan, Advocate of no.1B, Old Post Street, Kolkata- 700001 whose decision shall be final and binding on the parties. The arbitration proceedings shall be governed by the Arbitration and Conciliation Act , 1996 with all statutory modifications for the time being in force. The venue of the arbitration shall always be at Kolkata. The Courts at Kolkata shall have exclusive jurisdiction to entertain, try and determine all actions and proceedings between the parties." Disputes having arisen, named sole arbitrator recused himself. Hence, this application for appointment of arbitrator since agreed procedure does not provide for means to secure the appointment. In the meantime, respondent has suggested three names, of which one person has addressed himself to his client as sole arbitrator.
(2.) On last occasion of hearing Mr. Tyagi, learned advocate appearing on behalf of respondent had relied upon judgement of Supreme Court in Shailesh Dhairyawan Vs. Mohan Balkrishna Lulla reported in (2016) 3 SCC 619, on paragraphs 16 and 17. Relevant extracts from said paragraphs are reproduced below: "16. In ACC Ltd. v. Global Cements Ltd. : (2012) 7 SCC 71, the arbitration clause with which this Court was confronted read as follows: 21. If any question or difference or dispute shall arise between the parties hereto or their representatives at any time in relation to or with respect to the meaning or effect of these presents or with respect to the rights and liabilities of the parties hereto then such question or dispute shall be referred either to Mr. N.A. Palkhivala or Mr. D.S. Seth, whose decision in the matter shall be final and binding on both the parties. [at para 2] 17. .... The question may also arise in a given case that the named arbitrators may refuse to arbitrate disputes; in such a situation also, it is possible for the parties to appoint a substitute arbitrator unless the clause provides to the contrary. Objection can be raised by the parties only if there is a clear prohibition or debarment in resolving the question or dispute or difference between the parties in case of death of the named arbitrator or their non-availability, by a substitute arbitrator. We are of the view that Clause 21 does not prohibit or debar the parties in appointing a substitute arbitrator in place of the named arbitrators and, in the absence of any prohibition or debarment, parties can persuade the court for appointment of an arbitrator Under Clause 21 of the agreement. [at paras 17, 18, 21, 28-30]." Mr. Bose submits, facts in Shailesh Dhairyawan (supra) were that Bombay High Court had appointed substitute arbitrator on named arbitrator having resigned. He draws attention to paragraph 4 of the judgement where Supreme Court said as follows: "4. Nothing much seems to have materialised in the arbitration, and despite several meetings held by the named arbitrator, the arbitration proceedings continued to drag on, until by a letter dated 22.01.2011, the Arbitrator resigned as arbitrator in the aforesaid matter." Bombay High Court appointed a retired judge of that Court as substitute arbitrator. Supreme Court, by the judgement, upheld the appointment in finding that when parties had agreed to refer disputes to a retired Supreme Court Judge, it meant the appointing authority could appoint a person belonging to the same pool of retired Judges.
(3.) Today Mr. Tyagi relies on judgement of a learned single Judge of High Court of Karnataka in Bangalore Housing Development and Investment Vs. IBC Knowledge Park Private Limited reported in AIR 2010 Kant 59, on paragraphs 1 and 7. He submits, facts in that case were, in the 17th sitting of arbitral tribunal, the arbitrator indicated he wanted to recuse himself from the case. In context of those facts his reliance on, inter alia, paragraph 7 in the judgement, which is reproduced below: "7. It is pertinent of mention that the Arbitration Clause in the agreement does not provide a procedure for filling up of the vacancy that arose after the Arbitral Tribunal is constituted. Admittedly, as per Section 11(4)(a) of the Act, the petitioner has not called upon the respondent to fill up the vacancy that arose due to withdrawal from the office of Arbitrator by Sri. R.N. Narasimha Murthy. The letter of withdrawal from the office of the arbitrator by Sri. R.N. Narasimha Murthy cannot be construed as a request to fill up the vacancy within the scope of Section 11 of the Act by the petitioner to the respondent. On the other hand, the respondent/claimant has taken appropriate steps to nominate his arbitrator and in that regard, a letter was addressed to the arbitrator seeking his consent and after he agreed to be arbitrator, a memo dated 22.09.2008 was filed filling the vacancy. Therefore, the petition filed by the petitioner without calling upon the respondent to fill up the vacancy of the office of the Arbitrator on behalf of the respondent as required under Section 11(4)(a) of the Act, is not maintainable. The decisions cited by the learned Counsel for the respondent are of avail to the case of the respondent. There is no merit in the petition as the respondent has already nominated his arbitrator and filled up the vacancy that arose due to withdrawal from the office of arbitrator by Sri. R.N. Narasimha Murthy." He submits, this petition is pre-mature and should be dismissed. When parties had negotiated agreement regarding named person to act as arbitrator, his client had done the correct thing by proposing three names, for the parties to agree on one for the reference to commence and be proceeded with. He reiterates his reliance on above extract from paragraph 17 in Shailesh Dhairyawan Vs. Mohan Balkrishna Lulla (supra). Mr. Tyagi submits further, pursuant to persons' names proposed by his client, one of them had consented to act as arbitrator. Mr. Bose submits, his client was and is entitled to disagree on the names proposed. On query from Court, as to whether Supreme Court in Shailesh Dhairyawan (supra) had declared entitlement of a party to an arbitration agreement having named arbitrator, to supply the vacancy on the named arbitrator refusing or failing to act, Mr. Tyagi submits, this was not done by the judgement. ;