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TMI Blog2007 (4) TMI 626X X X X Extracts X X X X X X X X Extracts X X X X ..... n No.181 of 2005. The arbitrator has already been appointed. He should proceed in the matter and decide the dispute expeditiously. Consequently, the appeal is dismissed with no order as to costs. - Appeal (civil) 1783 of 2007 - - - Dated:- 4-4-2007 - MATHUR, A.K. AND CHATTERJEE, TARUN, JJ. JUDGMENT A.K.MATHUR, J. Leave granted. This appeal is directed against the order dated 18.1.2006 passed by learned Single Judge of the High Court of Delhi in Arbitration Petition No.181 of 2005 whereby learned Single Judge dismissed the application for appointment of Arbitrator. Hence, the present appeal against the aforesaid order. Brief facts which are necessary for disposal of this appeal are that an application styled under Section 11(5) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') was moved by the Ace Pipeline Contracts Private Limited, the appellant herein, for appointing a retired Judge of the Supreme Court of India to adjudicate the claims and disputes between the parties arising out of the contract between the parties dated 10.06.2002. The said contract pertained to the laying down of a pipeline and associated facilities for Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the terms of the agreement to the end and intent that the original Arbitrator shall be entitled to continue the arbitration proceedings notwithstanding his transfer or vacation of office as an Officer of the Corporation if the Director (Marketing) does not designate another person to act as arbitrator on such transfer, vacation of office or inability of original arbitrator. Such persons shall be entitled to proceed with the reference from the point at which it was left by his predecessor. It is also a term of this contract that no person other than the Director (Marketing) or a person nominated by such Director (Marketing) of the Corporation as aforesaid shall act as an Arbitrator hereunder. The award of the Arbitrator so appointed shall be final conclusive and binding on all parties to the agreement subject to the provisions of the Conciliation Arbitration Act, 1996 or any statutory modification or re-enactment thereof and the rules made thereunder for the time being in force shall apply to the arbitration proceedings under this clause." Clause 91 provides that any dispute arising between the parties shall be settled through arbitration and the appointing authority i.e. th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that any retired Judge of the Supreme Court may be appointed as Arbitrator. This was contested by the respondent by filing a reply. It was pointed out that the notice dated 21.7.2005 was received by the Director (Marketing) on 26.7.2005 and a request was made to the appellant to supply copy of the arbitration agreement and other corresponding documents as he was not aware of the procedure for appointment of the Arbitrator. The Director (Marketing) received reply to the communication dated 12.8.2005 on 16.8.2005 which was received in the Office on 17.8.2005. After receiving the communication and all the materials on 17.8.2005, the appointing authority appointed Shri P.S. Bhargava as Arbitrator on 22.8.2005 and a communication was sent to the appellant through courier which was received by him on 26.8.2005. It was also pointed out after receipt of the reply to the communication dated 12.8.2005 on 16.8.2005, 19th, 20th 21st August, 2005 Office remained closed on account of Rakshya Bandhan and weekly holidays. The Director (Marketing) sent reply on 22.8.2005 appointing Shri P.S.Bhargava as Arbitrator. It was also pointed out that the whole action was done with urgency and there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 11 of the Act. A person of any nationality may be appointed as Arbitrator, unless otherwise agreed between the parties. Sub-section (2) of Section 11 says that subject to sub-section (6), the parties are free to agree on a procedure for appointing the arbitrator or arbitrators. Sub-section (3) provides that failing any agreement referred to in sub-section (2), one arbitrator can be appointed by each party and the two arbitrators so appointed shall appoint the third arbitrator who shall act as the presiding arbitrator. Sub-section (4) says that in case a party fails to make appointment within thirty days from the date of receipt of the request to do so from the other party, or that the two appointed arbitrators fail to nominate the third arbitrator within thirty days from the date of their appointment, the appointment shall be made by the Chief Justice or by any person or institution designated by him. Sub-section (5) says failing any agreement referred to in sub-section (2), in an arbitration with a sole arbitrator, if the parties fail to agree on the arbitrator within thirty days from receipt of a request by one party from the other party to so agree the appointment shall b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 11(6), if the opposite party has not made an appointment within 30 days of demand, the right to make appointment is not forfeited but continues, but an appointment has to be made before the former files application under Section 11 seeking appointment of an arbitrator. Only then the right of the opposite party ceases. We do not, therefore, agree with the observation in the above judgments that if the appointment is not made within 30 days of demand, the right to appoint an arbitrator under Section 11(6) is forfeited. 20. In the present case the respondent made the appointment before the appellant filed the application under Section 11(6) though it was beyond 30 days from the date of demand. In our view, the appointment of the arbitrator by the respondent is valid and it cannot be said that the right was forfeited after expiry of 30 days from the date of demand. 21. We need not decide whether for purposes of sub- sections (4) and (5) of Section, which expressly prescribe 30 days, the period of 30 days is mandatory or not." The observations made by their Lordships are very clear and Their Lordships negatived the contention that 30 days should not be read in sub-section (6) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ays cannot be read in Section 11(6) of the Act. The relevant portion of Punj Lloyd's case (supra) reads as under:- "Having heard the learned counsel for the parties, we are satisfied that the appeal deserves to be allowed. The learned counsel for the appellant has placed reliance on the law laid down by this Court in the case of Datar Switchgears Ltd. v. Tata Finance Ltd. (SCC p.158, para 19) wherein this Court has held as under : "So far as Section 11(6) is concerned, if one party demands the opposite party to appoint an arbitrator and the opposite party does not make an appointment within 30 days of the demand, the right to appointment does not get automatically forfeited after expiry of 30 days. If the opposite party makes an appointment even after 30 days of the demand, but before the first party has moved the court under Section 11, that would be sufficient. In other words, in cases arising under Section 11(6), if the opposite party has not made an appointment within 30 days of demand, the right to make appointment is not forfeited but continues, but an appointment has to be made before the former files application under Section 11 seeking appointment of an arbitr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hold good. We again reemphasize that in paragraphs 19, 20 21 Their Lordships have clearly negatived the submission that period of 30 days cannot be read in sub-section (6) of Section 11 of the Act. Our attention was also invited to a decision of this Court in Shin Satellite Public Co.Ltd. v. Jain Studios Ltd. [(2006) 2 SCC 628]. This decision was given by Hon'ble C.K. Thakker, J. in chambers. There also, no such view has been taken by learned Judge that the period of 30 days should be read in sub-section (6) of Section 11 of the Act. Our attention was also invited to a decision of this Court in BSNL Ors. v. Subash Chandra Kanchan Anr. [(2006) 8 SCC 279]. There also, the question was whether the appellant was consenting party to appointment of arbitrator or not. Appointment of arbitrator was made by the High Court with the consent of parties which was subsequently sought to be revoked on the ground that no instruction in that behalf was given. But that contention was negatived by the Court and there also, the question of appointment of arbitrator within the period of 30 days was not decided. In this connection a reference may also be made to a decision of this Court in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... except in exceptional cases for reasons to be recorded or where both parties agree for common name. In the present case, in fact the appellant's demand was to get some retired Judge of the Supreme Court to be appointed as arbitrator on the ground that if any person nominated in the arbitration clause is appointed, then it may suffer from bias or the arbitrator may not be impartial or independent in taking decision. Once a party has entered into an agreement with eyes wide open it cannot wriggle out of the situation that if any person of the respondent-BPCL is appointed as arbitrator he will not be impartial or objective. However, if the appellant feels that the arbitrator has not acted independently or impartially, or he has suffered from any bias, it will always be open to the party to make an application under Section 34 of the Act to set aside the award on the ground that arbitrator acted with bias or malice in law or fact. In view of our above discussion, we find no reason to interfere with the order passed by the learned Single Judge of the High Court of Delhi in Arbitration Petition No.181 of 2005. The arbitrator has already been appointed. He should proceed in the matter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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