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2006 (11) TMI 549 - SC - Companies LawAppointment of arbitrator - Held that - In case appointment is not made in time on the request made by the contracting party then in that case the power of the High Court to appoint arbitrator under Section 11 of the Act will not be denuded. We cannot allow administrative authorities to sleep over the matter and leave the citizens without any remedy. Authorities shall be vigilant and their failure shall certainly give rise to cause to the affected party. In case, the General Manager, Railway does not appoint the arbitral tribunal after expiry of the notice of 30 days or before the party approaches the High Court, in that case, the High Court will be fully justified in appointing arbitrator under section 11 of the Act. It is the discretion of the High Court that they can appoint any railway officer or they can appoint any High Court Judge according to the given situation. As a result of our above discussion, we allow these appeals, set aside the orders of the High Court. We direct the General Manager, Railway to appoint arbitral tribunal within a period of 30 days from the date of receipt of a certified copy of this order. The arbitral tribunal so appointed shall enter into the matter and dispose of the arbitration proceedings as expeditiously as possible. Consequently, the appointment of Justice Y.V.Narayana as arbitrator is set aside. There would be no order as to costs.
Issues:
1. Appointment of arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996. 2. Dispute arising between parties regarding a contract for supply and stacking of stone ballast. 3. Challenge of the High Court's order appointing an arbitrator by the Union of India. 4. Interpretation of Clauses 63 & 64 of the General Conditions of Contract for appointment of arbitrators. 5. Comparison of previous legal judgments regarding appointment of arbitrators. 6. High Court's power to appoint arbitrator under Section 11 of the Act in case of delay by administrative authorities. Issue 1: The judgment dealt with the appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996. The High Court had appointed an arbitrator in response to a dispute between the parties. However, the Supreme Court held that the appointment of the arbitrator by the General Manager, Railway as per the General Conditions of Contract should be respected, and the High Court should not interfere in such appointments. Issue 2: The dispute arose from a contract for the supply and stacking of stone ballast, where the contractor failed to meet the agreed-upon terms, leading to penalties imposed by the appellant, Union of India. The contractor sought arbitration, leading to a series of legal proceedings culminating in the appeal before the Supreme Court. Issue 3: The Union of India challenged the High Court's order appointing an arbitrator, arguing that the appointment made by the General Manager, Railway should be upheld as per the contract's clauses. The Supreme Court agreed with the Union of India's position and set aside the High Court's order, directing the General Manager, Railway to appoint an arbitral tribunal within 30 days. Issue 4: The judgment interpreted Clauses 63 & 64 of the General Conditions of Contract, emphasizing the importance of adhering to the contract's provisions for appointing arbitrators. Legal precedents were cited to support the position that the High Court should not interfere with such appointments made in accordance with the contract terms. Issue 5: The judgment compared and contrasted previous legal judgments on the appointment of arbitrators, highlighting the importance of following the specific provisions of the contract in appointing arbitrators. The Supreme Court reiterated that the General Manager, Railway should be given the latitude to make such appointments as per the contract terms. Issue 6: The judgment addressed the power of the High Court to appoint an arbitrator under Section 11 of the Act in cases where administrative authorities, like the General Manager, Railway, fail to appoint an arbitrator in a timely manner. The Supreme Court emphasized that the High Court could step in to appoint an arbitrator if necessary to ensure timely resolution of disputes, especially when administrative authorities delay the process.
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