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TMI Blog2018 (3) TMI 1694X X X X Extracts X X X X X X X X Extracts X X X X ..... - - Dated:- 1-3-2018 - Ms. Ritu Bahri, J. Mr. P.S. Rana, Advocate, for the petitioner. Mr. A.K. Chopra, Senior Advocate, with Ms. Rupa Pathania, Mr. Sumeet Goel, Advocate, and Mr. Atul Goel, Advocate, for respondent. Ritu Bahri, Challenge in this petition is to the order dated 27.01.2017 passed by the Additional District Judge, Chandigarh, dismissing an application filed by the petitioner under Section 14 of the Arbitration and Conciliation Act, 1996 (for short 'the Act') for declaration to the effect that the constitution of the Arbitral Tribunal is illegal, arbitrary, unwarranted and against the principles of natural justice. Government of Haryana, Public Works (B R) Department through Engineer-in-Chief, Haryana, PWD B R Branch issued letter of acceptance dated 12.12.2008 in favour of M/s GF Toll Road Private Limited (respondent) for execution of work of Design, Engineering, Finance, Construction, Operation and Maintenance of Gurgaon-Faridabad and Ballabhgarh-Sohna Roads in Faridabad and Gurgaon Districts on Built, Operate and Transfer (BOT) basis. Concession agreement was signed on 31.01.2009 with construction period of 24 months having conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g with the counter claim because without deposit of the said amount, further proceedings could not be carried out. The ICA vide letter dated 24.09.2015 again reasserted that the nomination of Mr. M.K. Aggarwal was against the norms and code of conduct. Thereafter, respondent No.1 sent a letter dated 25.09.2015 in response to email dated 21.05.2015 sent by the ICA, conveyed its objection for the first time to the appointment of Mr. M.K. Aggarwal as an Arbitrator merely because he had worked in the organization of petitioner-State of Haryana, which gave rise to justifiable doubts about his independence and impartiality to act as an arbitrator. Vide letter dated 12.10.2015, ICA asked the petitioner to forward a fresh name to be appointed as arbitrator. It was further stated that if, the State of Haryana still insisted to nominate Mr. M.K. Aggarwal, the Council would have to refer the matter to its Arbitration Committee for appointment of petitioner's nominee arbitrator. Further, the latter dated 30.10.2015 also stated that the petitioner had never ever responded positively to opportunities give by the Council for change and substitution of its nominee arbitrator, as such, it (Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Haryana-petitioner, the Arbitral Tribunal was rightly constituted. Respondent No.2-Indian Council of Arbitration filed a separate reply and reiterated the stand taken by respondent No.1 to the effect that despite numerous opportunities given, neither the present petitioner-State of Haryana sent any substituted name for its nominee arbitrator nor any attempt was made to deposit the amount towards arbitration proceedings. Vide letter dated 30.10.2015, respondent No.2 had communicated to the petitioner that the nomination of Mr. M.K. Aggarwal was illegal and he was to be substituted by another arbitrator. After giving ample opportunities to petitioner-State of Haryana, the Arbitration Committee appointed Dr. P.C. Markanda-respondent No.5 as the nominee arbitrator on behalf of petitioner and this decision was communicated by respondent Nos.2 to 5 vide letter dated 18.11.2015. It was further submitted that the Arbitral Tribunal has been constituted under Rule 24 of the ICA Rules and the same was communicated by respondent No.2 to all the concerned parties. First meeting of the constituted Tribunal was held on 20.02.2016 and in that hearing, both the claimant and respondent had a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ICA Rules, to reconsider his name. But, the department had not sent any name by 27.10.2015. Thereafter, vide letter dated 23.11.2015, Council had informed the petitioner-department that they had already appointed a nominee arbitrator and were awaiting the consent letter from him. Finally, vide letter dated 05.12.2015, the ICA notified under Rule 24 of the ICA Rules of Arbitration about the constitution of Arbitral Tribunal. Respondent No.1-M/s G.F. Tolls filed statement of claim before the Arbitral Tribunal. Even, the present petitioner-State of Haryana filed objections before the constituted Tribunal, which were rejected being not in the form of a valid application. The petitioner has also filed counter claim before the Arbitral Tribunal. This fact shows that impliedly, the jurisdiction of the Tribunal has been accepted by the petitioner. In such circumstances, the aggrieved party can make an application with regard to constitution of the Tribunal, before the Tribunal itself. With these observations, the Additional District Judge, Chandigarh has dismissed the application filed by the petitioner. Learned counsel for the petitioner, in support of his contentions, has referr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent case, initially as per clause 39.1 (b) of Concession Agreement, dispute could be resolved amicably by referring the matter to an independent consultant. If the dispute is not resolved within 45 days, then the parties could make a claim in writing under clause 39.2 for Arbitration. Relevant Rules 39.2.1 and 39.2.2, in this regard are reproduced as under:- 39.2.1. Any dispute, which is not resolved amicably as provided in clause 39.1, shall be finally decided by reference to arbitration by a Board of Arbitrators, appointed pursuant to Clause 39.2.2 sub clause (b) below. Such arbitration shall be held in accordance with the Rules of Arbitration of the Indian Council of Arbitration and shall be subject to the provisions of the Arbitration Act. 39.2.2. There shall be a Board of three arbitrators of whom each party shall select one and the third arbitrator shall be appointed in accordance with the Rules of Arbitration of the Indian Council of Arbitration. A perusal of the above two rules shows that there should be a Board of three Arbitrators of whom, each party shall select one and the third arbitrator shall be appointed in accordance with the Rules of Arbitration of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itious resolution of disputes. Therefore, where a party raises a plea that the arbitral tribunal has not been properly constituted or has no jurisdiction, it must do so at the threshold before the arbitral tribunal so that remedial measures may be immediately taken and time and expense involved in hearing of the matter before the arbitral tribunal which may ultimately be found to be either not properly constituted or lacking in jurisdiction, in proceedings for setting aside the award, may be avoided. The commentary on Model Law clearly illustrates the aforesaid legal position. 19. Where a party has received notice and he does not raise a plea of lack of jurisdiction before the arbitral tribunal, he must make out a strong case whey he did not do so if, he choses to move a petition for setting aside the award under Section 34 (2) (v) of the Act on the ground that the composition of the arbitral tribunal was not in accordance with the agreement of the parties. If, plea of jurisdiction is not taken before the arbitrator as provided in Section 16 of the Act, such a plea cannot be permitted to be raised in proceedings under Section 34 of the Act for setting aside the award, unless goo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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