TMI Blog2015 (2) TMI 484X X X X Extracts X X X X X X X X Extracts X X X X ..... that they did so is contrary to their own documents placed on record. Their letter dated 31.07.2014 clearly shows that till 31.07.2014, they had not nominated any Arbitrator. The letter dated 13.08.2014 of the petitioner clearly shows that a letter for appointment of the Arbitrator dated 02.08.2014 was signed by their Director only on 07.08.2014. Vide letter dated 02.08.2014 the petitioner had informed the respondent that they had appointed Justice K.S. Gupta (Retd.) as the nominee Arbitrator. Since the letter dated 02.08.2014, appointing the Arbitrator by the petitioner, was executed only on 07.08.2014, it cannot be said that the petitioner had nominated his Arbitrator before 07.08.2014. Even if we presume that the respondent by remaining silent on the letter of the petitioner for seeking time till 01.08.2014 to appoint an Arbitrator amounts to consent or acquiescing to the request, still the petitioners were bound to nominate their Arbitrator atleast by 01.08.2014. It is also apparent from the letter of the respondent dated 06.08.2014 that they turned down the request of the petitioner in its letter dated 31.07.2014 for grant of further time for nomination of the Arbitrator a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13-11-2014 - MS. DEEPA SHARMA, J. For the Appellant : Mr Jayant K. Mehta and Mr Shovan Mishra, Advs. For the Respondent : Mr K.K. Rai, Senior Advocate with Mr P.K. Mishra, Advocate JUDGMENT 1. The present petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 for the relief that the appointment of Justice K.S. Gupta (Retd.), the retired nominee Arbitrator, appointed by the petitioner, be upheld. The other request, which has been made by the petitioner in the present petition, is that since the respondent has already nominated his Arbitrator, pursuant to the arbitration clause and the petitioner has also appointed his nominee Arbitrator and since both the nominated arbitrators have failed to reach the consensus to appoint a Presiding Arbitrator, the Court should appoint a Presiding Arbitrator. A request has also been made to quash the notice dated 04.09.2014 of the respondent, whereby the respondent had appointed his nominated Arbitrator as a sole Arbitrator. 2. The brief facts of this case are that the petitioner and the respondent had entered into a contract which was subsequently terminated by the respondent and the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... written communication fixed the date of hearing before him. 4. It is also pleaded by the petitioner that the notice of the respondent dated 14.05.2014 was actually received by them only on 20.05.2014 and, therefore, 60 days for appointment of an Arbitrator be counted from that date and those 60 days thus expired only on 20.07.2014. It is further pleaded that the petitioner understood by the silence of the respondent on their letter seeking extension of time till 01.08.2014 that the respondent had conceded to their request for extension of time till 01.08.2014. It is also contended that the respondents have now lost their right to object the nomination of the Arbitrator by the petitioner. Since the Arbitrator has been validly appointed by the petitioner and since both the nominated Arbitrators in the meeting for appointment of a principal Arbitrator had failed to reach a consensus, it is prayed that the Court should appoint a third Arbitrator declaring that the petitioner had legally nominated their Arbitrator and also quash the appointment of the nominated Arbitrator as a sole Arbitrator. 5. It is further argued by the learned counsel for the petitioner that the right of a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Indian Arbitration Act. If either of the parties fails to appoint its arbitrator within sixty (60) days after receipt of a notice from the other party invoking the Arbitration clause, the arbitrator appointed by the party invoking the arbitration clause shall become the sole arbitrator to conduct the arbitration. 10. This arbitration clause has two parts. One part lays down the procedure for appointment of the Arbitrator. It requires that the arbitration shall be conducted by three Arbitrators. Both the parties, contractor and the employer has to first nominate their Arbitrator and thereafter both the Arbitrators, so appointed, has to appoint a third Arbitrator. The clause also requires that both the parties shall nominate their Arbitrator within 60 days after receipt of a notice from the party invoking the arbitration clause. The second part of this arbitration clause prescribes the procedure to be followed by the parties in case either of the parties fail to appoint an Arbitrator within 60 days. The clause prescribes that in such eventuality, the Arbitrator appointed by the party invoking the arbitration clause shall become the sole Arbitrator to conduct the arbitration. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner appointed its arbitrator. From these facts, it is apparent that while the respondent had acted as per the procedure prescribed under the arbitration clause binding the parties, it was the petitioner, who had failed to comply the procedure under the arbitration clause. This clearly shows that the petitioner is a defaulting party. 12. The petitioner has also raised a contention that in view of the findings in Bharat Sanchar Nigam Limited (supra), he could appoint an Arbitrator at any time before the filing of the present case and since he has done so, his appointment of the Arbitrator is valid and the Court should appoint the third Arbitrator. It is argued on behalf of the respondent that the facts in this case and the facts in Bharat Sanchar Nigam Limited (supra) are entirely different and the findings of that case is not applicable on the facts of this case, especially when the petitioner himself is a defaulting party. On this point, I have given careful consideration to the rival contention and has also gone through the case law relied upon by the petitioner. From the facts of the case supra, it is apparent that it was the respondent Dhanurdhar Champatiray who ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etter dated 31.07.2014, they nominated their Arbitrator and informed the respondent vide letter dated 02.08.2014. These arguments of petitioner are contrary to record. Firstly, because when the petitioner did not appoint the Arbitrator by 01.08.2014 and again wrote a letter dated 31.07.2014, the respondent vide their letter dated 06.08.2014 did not agree to any further extension of time and in terms of arbitration clause appointed their nominated Arbitrator as a sole Arbitrator. It is pertinent to mention here that the sole Arbitrator was appointed by the respondent vide their letter dated 06.08.2014, before even the petitioner had informed respondent about nomination of their Arbitrator. Although the petitioner has contended that vide their letter dated 02.08.2014 they informed the respondent of appointment of their nominated Arbitrator, but, in their own letter dated 13.08.2014, they have clearly stated that the said letter dated 02.08.2014 was sent by them on 07.08.2014 as their Director was out of station and could not sign the letter earlier. 14. The relevant portion of the said letter is reproduced as under:- The said letter dated 02.08.2014 was sent by us o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of Arbitrator and thus is a defaulting party. Since the petitioner had failed to appoint its nominee Arbitrator in terms of Arbitration agreement, it cannot be said that the appointment of nominee Arbitrator by him is as per the agreed procedure. 19. The another contention of the petitioner is that since the nominated Arbitrators had already met on 22.08.2014 for appointment of a principal arbitrator, but could not reach to any consensus, therefore, this Court should appoint a third Arbitrator so that the Arbitral Tribunal be completed. This argument of the petitioner, as discussed above, has no merit in it and their meeting on 22.08.2014 when they were unaware that pursuant to arbitration clause, Justice S.N. Aggarwal (Retd.) had been appointed as a sole Arbitrator, is of no consequence. 20. Part II of Clause 39(2) clearly stipulates that if either of the parties fails to appoint their Arbitrator, the nominated Arbitrator appointed by one party shall act as a sole Arbitrator. In the present case since the respondent had invoked the arbitration clause, and petitioner had failed to nominate his Arbitrator in terms of agreement, the respondent has rightly vide letter dated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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