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2016 (7) TMI 1056 - SUPREME COURT

2016 (7) TMI 1056 - SUPREME COURT - TMI - Application under Section 11 of the Arbitration and Conciliation Act, 1996 - HC appointed a former Judge of that Court as the Arbitrator after holding that the appellants had forfeited their right to appoint railway officers as arbitrators in terms of clause 64(3)(a)(ii) of the agreement - Held that:- It did not lie in the mouth of the respondent contractor that the appellants had committed a default and had forfeited their right to appoint arbitrators a .....

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provided, will be material for deciding when the right of a party to appoint the arbitrator will suffer forfeiture and when the other party would be entitled to give notice and on failure, move application under Section 11(6) of the Act. Such terms deserve respect of the parties and attention of the Court. - In view of aforesaid discussions we find no option but to set aside the impugned order under appeal. We order accordingly. In case the respondent contractor is still desirous of pursuin .....

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be at liberty to pursue its further remedies as per provisions of the Act and law. Appeal allowed - Civil Appeal No.6179 of 2016 (Arising out of SLP (C) No. 28851 of 2014) - Dated:- 25-7-2016 - Shiva Kirti Singh And R. Banumathi, JJ. JUDGMENT Shiva Kirti Singh, J. 1. The appellants have assailed the legality and correctness of final order dated 25.02.2014 passed in Arbitration Petition No.14 of 2013 by an Hon ble Judge of Gauhati High Court designated by the Chief Justice of that Court to decid .....

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appellants the impugned order suffers from apparent error of fact on account of misreading or non-reading of the relevant clause of the Agreement, i.e., clause 64(3)(a)(ii) which requires the contractor/respondent to make a written demand for arbitration and permits 60 days time to the Railways from the date of receipt of the demand, to send a panel of more than three names of eligible gazetted railway officers so that the contractor may suggest to General Manager at least two names out of that .....

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demand letter from the petitioner. But since there was no reaction from the railways side within the permissible 30 days and since in the meantime the contractor has approached the High Court under Section 11(6) of the Arbitration Act, having regard to the decision in Datar Switchgears Ltd. (supra) it is apparent that the respondents have forfeited their right to appoint a railway officer as the arbitrator. 3. It has been further contended on behalf of the appellants that the law laid down in t .....

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n arbitrator without any time limit, such power will stand forfeited only after the party making the demand has moved the Court under Section 11 and not on mere expiry of the notice period of 30 days. It is appellants stand that in view of stipulations in the relevant clause providing for arbitration, the respondent-contractor admittedly sent a notice demanding arbitration on 12.06.2013 which was served on the appellants on 14.06.2013 and hence it had to wait for 60 days for receipt of a panel o .....

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the finding should have been that the application under Section 11(6) of the Act was premature. 4. On behalf of appellants reliance has been placed upon judgment of this Court by a three Judges Bench in the case of Northern Railway Administration, Ministry of Railway v. Patel Engineering Company Limited (2008) 10 SCC 240 in support of the proposition that in the appointment of arbitrator by court under Section 11(6), the Chief Justice or the designated person shall have due regard to the two co .....

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ed to read the relevant clause of the agreement which allows 60 days time to the Railways to respond to the demand of the contractor by sending a panel containing more than three names out of which the contractor has to suggest at least two names to the Railways which has to appoint one out of them as the contractor s nominee. The relevant dates are also not in dispute. Since the notice for appointment of arbitrators dated 12.06.2013 was served on the railways on 14.06.2013, the contractor had t .....

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