UB ENGINEERING LIMITED Vs. ELECTROSTEEL STEEL LIMITED
LAWS(JHAR)-2017-5-94
HIGH COURT OF JHARKHAND
Decided on May 05,2017

UB Engineering Limited Appellant
VERSUS
Electrosteel Steel Limited Respondents

JUDGEMENT

D. N. Patel, J. - (1.) These two arbitration applications have been preferred under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter to be referred to as the "Act of 1996") for appointment of arbitrator.
(2.) Factual Matrix • The respondent company wanted to establish steel plant, for which a power plant as well as oxygen plant was to be constructed for captive consumption. • Two separate agreements dated 28th July, 2010 and 27th December, 2010 have been entered into between the parties to these arbitration applications for the captive power plant and the oxygen plant respectively. These two agreements are at Annexure-1 series to the memo of Arbitration Application No. 14 of 2015, which contain arbitration clause. • Separate work orders have also been issued by the respondent to the applicant for captive power plant. These three are numbered as under : (a) 430000883 (b) 4300001145 (c) 4300003617 The aforesaid three work orders were for Rs. 6179800/-, Rs. 29863725/- and Rs. 60446753.02 paise and it is alleged by this applicant that with respect to the aforesaid three work orders there is a dispute of Rs. 2,9476074.25/- for which a Notice dated 17th June, 2015 under Section 21 of the Act of 1996 was given by this applicant to the respondent (Annexure-8 to the memo of Arbitration Application No. 14 of 2015). All the annexures mentioned in this judgment pertains to Arbitration Application No. 14 of 2015. • It also appears that the nature of work for the first work contract was "Wrapping Coating Jobs for Pipelines" as per annexure A-2 series to the counter-affidavit filed by the respondent. • Similarly, for another work contract the nature of the work was "Fabrication of Ms. Pipe Bends Reducers" and so far as third work contract is concerned, the nature of the work offered by the respondents to the applicant was "Fabrication and Erection of CPP". • It appears from the facts of the cases that some work was readily executed by this applicant in the said three work orders. Arbitration Clauses in the work oders are slightly different from the arbitration clause in the agreements. • In the agreements, which are dated 28th July, 2016 and 27th December, 2010, both the parties were empowered to appoint their own arbitrators and thereafter, these two arbitrators were to appoint the third arbitrator, whereas, as per the work orders the sole arbitrator was to be appointed by the respondent. • There are several letters written by this applicant raising demand of money as they have executed the work as per aforesaid three work orders, right from 12th December, 2013 to 27th March, 2015 and thereafter, Notice was given on 17th June, 2015 (Annexure 8) for appointment of arbitrator. On 4th July, 2015, reply was given by the respondent and sole arbitrator was appointed by the respondent on 16th October, 2015 as per the arbitration clause contained in the aforesaid three work orders. The said arbitrator is retired Hon'ble Mr. Justice Pranab Kr. Chattopadhyay, who is a reitred Judge of the Hon'ble Calcutta High Court. On 5th December, 2015 objection was raised by this applicant before the learned arbitrator. Objection was raised about the appointment of learned arbitrator and his jurisdiction. The learned arbitrator has given a date of hearing on 14th November, 2015, which was not attended by this applicant. Further, date was given on 28th November, 2015. On this date also the applicant did not remain present before the learned arbitrator and ultimately, on 15th December, 2015 further objection was raised by this applicant about appointment of the arbitrator and his jurisdiction. The learned arbitrator has decided the application which was more in the form of objection under Section 16 of the Act of 1996. This order can be challenged under Section 34 of the Act of 1996. No such application has been preferred by this applicant and present arbitration applications have been preferred for appointment of the learned arbitrator under Section 11(6) of the Act of 1996.
(3.) Arguments canvassed by counsel for the applicant : Counsel appearing for the applicant submitted that agreements have been entered into between this applicant and the respondent on 28th July, 2010 and 27th December, 2010 for construction, installation, erection and fabrication etc. work for captive power plant as well as for oxygen plant. These two agreements are at Annexure-1 series to the memo of the Arbitration Application No. 14 of 2015. As per these two agreements, both the parties are at liberty to appoint their own arbitrator and thereafter, two arbitrators so nominated shall jointly nominate the third presiding arbitrator. As the respondent has appointed its own arbitrator as a sole arbitrator, present application has been preferred for appointment of the arbitrator as per the agreement. It is submitted by the counsel for the applicant that work orders issued by the respondent are in continuity with the aforesaid two agreements. There is no separate existence of work orders in absence of original of aforesaid two agreements and hence, as per the arbitration clause in the agreements both the parties can nominate their own arbitrator and the nominated arbitrators will jointly appoint the third presiding arbitrator. Counsel appearing for the applicant has relied upon decisions rendered by Hon'ble the Supreme Court in following cases : (a) Walter Bau Ag. Legal Successor, of the Original Contractor, Dyckerhoff v. Municipal Corporation of Greater Mumbai, 2015 3 SCC 800 para 10. (b) Ashpura Mine-Chem Limited. On the basis of the aforesaid judgments, it is submitted that even if the arbitrator has been appointed unilaterally by the respondent, this Court has all power, authority and jurisdiction to appoint an arbitrator under Section 11(6) of the Act of 1996. It is submitted by counsel appearing for the applicant that despite the Notice given by this applicant dated 17th June, 2015, respondent has not nominated its arbitrator and now after this applicant has preferred this application, the right of nomination of the arbitrator by the respondent no more remains in existence and hence also this Court has all power, jurisdiction and authority to appoint learned arbitrator under the Act of 1996.;


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