TMI Blog2017 (4) TMI 1617X X X X Extracts X X X X X X X X Extracts X X X X ..... enced prior to the enactment of the said Act (i.e. the 1996 Act). In the present case, what is, however, significant is the explanation of the law and in particular the expression 'arbitral proceedings' occurring in Section 26 of the Amendment Act. In terms of Section 26 of the Amendment Act, the Act as amended would apply as long as parties otherwise agree that the Amendment Act shall apply in relation to arbitration proceedings commenced on or after the date of amendment of this Act. - The Court is unable to accept the submission on behalf of the Respondent that in terms of the wordings of Clause 56 of the GCC as amended the parties have to hereafter again agree that the Act as amended with effect from 23rd October 2015 would apply to them. The words any statutory modification or re-enactment thereof and the rules made thereunder and for the time being in force shall apply to the arbitration. satisfies the requirement of Section 26 of there being an agreement between the parties that the Act as amended with effect from 23rd October 2015 will apply. The net result is that Section 12(5) as amended with effect from 23 rd October 2015 would apply. Section 12 (5) c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The Petitioner was awarded the work of Site Levelling and Infrastructure Works Package for Meja Thermal Power Project (2 X 660 MW) by a letter of Award ('LoA') on 18th May 2010. A formal contract was entered into between the parties in respect of the aforesaid LoA on 21st September 2010. The contract has a mechanism for dispute resolution by way of arbitration. This is contained in Clause 56 of the General Conditions of Contract ('GCC') which reads as follows: 56. Except where otherwise provided for in the contract all questions and disputes relating to the meaning of the specifications designs drawings and instructions herein before mentioned and as of the quality of workmanship or materials used on the work or as to any other question, claim, right, matter or thing whatsoever in any way arising out of or relating the contract designs, drawing specifications, estimates, instructions orders or these conditions of otherwise concerning the work or the execution or failure to execute the same whether arising during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of the General Manager of NTPC Li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Case No. 1 of 2013. The contract subsequently stood terminated and the Respondent raised a claim in the sum of Rs. 207,56,42,531 as on 4th March 2014 for the losses and expenses suffered on account of termination of the contract, together with interest @ 18% per annum. This dispute was also referred to the same sole Arbitrator and was numbered as Arbitration Case No. 1 of 2014. 6. The arbitration proceedings were held at Allahabad in Uttar Pradesh. At the stage of examination of witnesses, the sole Arbitrator on 12th August 2016 informed both parties of the change of his address for correspondence as follows: Narsingh General Manager (PP M-CEG) NTPC Ltd. NTPC Bhawan, Scope Complex Core 5, 2nd Floor, 7, Institutional Area, Lodhi Road, New Delhi-110003. 7. On the following day i.e. 13th August 2016 the sole Arbitrator further clarified as under: In reference to change of correspondence address of Sole Arbitrator as communicated on 12.08.2016 M/s. RIPPL inquired whether he is Incharge of the Project on date. The Sole Arbitrator informed that he is not Incharge of Project since 01.06.2016. However office of the Sole Arbitrator is functional at its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Ms. Kiran Suri, learned Senior counsel appearing for the Petitioner first submitted that the Respondent was bound to appoint a fresh Arbitrator within 30 days from 1st June 2016 the date on which Mr. Narsingh ceased to be an Arbitrator. Since that was not done, the Respondent should be taken to have waived its right appoint an Arbitrator under Clause 56 of the GCC. Reliance is placed on the decision in Datar Switchgears Ltd. v. Tata Finance Ltd. (2000) 8 SCC 151. Secondly, it is submitted that the arbitration clause in question states that the Arbitration Act 1940 (substituted by the Act by an amendment) and all amendments subsequent thereto would apply. It is accordingly submitted that the Act as amended with effect from 23rd October 2015 would apply and in that event the appointment of a General Manager of the Respondent as sole Arbitrator cannot be legally sustained. 14. Mr. Maninder Singh, learned ASG appearing for the Respondent on the other hand submitted that there was in fact no need to appoint any Arbitrator in place of Mr. Narsingh because the question of appointing a new Arbitrator would arise only when the original Arbitrator would be unable to act by reason of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ections. It referred to the decision in Thyssen Stahlunion Gmbh v. Steel Authority of India Limited 1999 (9) SCC 334 where the expression in relation to was examined. There the Supreme Court was examining the applicability of the Arbitration Act, 1940 which had been repealed in relation to arbitration proceedings that had commenced prior to the enactment of the said Act (i.e. the 1996 Act). The conclusions of the Supreme Court in the above decision were as under: 22. For the reasons to follow, we hold: 1. The provisions of the old Act (Arbitration Act, 1940) shall apply in relation to arbitral proceedings which have commenced before the coming into force of the new Act (the Arbitration and Conciliation Act, 1996). 2. The phrase in relation to arbitral proceedings cannot be given a narrow meaning to mean only pendency of the arbitration proceedings before the arbitrator. It would cover not only proceedings pending before the arbitrator but would also cover the proceedings before the court and any proceedings which are required to be taken under the old Act for the award becoming a decree under Section 17 thereof and also appeal arising thereunder. 3. In cases where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r: 30. Now, if the argument of the respondents is to be accepted that the first limb of Section 26 applies only to arbitral proceedings in the sense of proceedings before arbitral tribunals and not to court proceedings, then, it is obvious that Section 26 is silent with regard to the second and third categories of cases to which we have already referred above. In other words, in respect of these categories, no contrary intention of retrospectivity is evinced upon a reading of Section 26 of the Amending Act. Therefore, even if we take the argument of the respondents to be correct, the result would still be the same and, that is, that in respect of all the arbitral proceedings commenced prior to 23.10.2015, the unamended provisions of the said Act would continue to operate till the enforcement of the award. 20. Ultimately the conclusions reached by the Division Bench were as under: 1) Section 26 of the Amending Act, if a narrow view of the expression to the arbitral proceedings is to be taken, is silent on those categories of cases where the arbitral proceedings commenced prior to 23.10.2015 and where even the award was made prior to 23.10.2015, but where either a petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er who happens to be a serving GM of the Respondent. Therefore it is to no avail that the Respondent has by its letter dated 21st August 2016 appointed Mr. Kher as an Arbitrator to adjudicate the Arbitration Case Nos. 1 of 2013 and 1 of 2014. His mandate stands terminated. 24. The arbitration clause does specify that the venue of the arbitration should be in Allahabad. It is plain that the Respondent themselves have no problem in arbitration taking place in Delhi. In fact Mr. Narsingh gave the new address of correspondence as the Delhi address and the Respondent has its office in Delhi and the witness examination has already concluded. For the mere completion of the arbitration from the stage where it was, the arbitration could well take place in Delhi particularly since there is no contrary intention appearing anywhere in the contract. The office of the Respondent is in fact located in Delhi. 25. For all the aforementioned reasons, the Court appoints Justice G.S. Singhvi, a former judge of the Supreme Court of India, as sole Arbitrator to adjudicate the disputes between the parties, including their claims and counterclaims. Justice Singhvi will fix his own terms and communic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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