Himachal Pradesh High Court
ARB.C/153/2022 on 30 December 2022
IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA
Arb. Case No. 153 of 2022.
Date of decision: 30.12.2022
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Narain Dass Naik …Petitioner
Versus
State of H.P. & another
…Respondents
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Coram:
The Hon’ble Mr. Justice A.A. Sayed, Chief Justice Whether approved for reporting?1
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For the petitioner :
Mr. Suneet Goel, Advocate.
For the respondents:
Mr. Yudhvir Singh Thakur, Deputy
Advocate General.
A.A. Sayed, Chief Justice (Oral)
This Application is filed by the petitioner invoking Sections 14 and 15 of the Arbitration and Conciliation Act, 1996
(for short, "the Act") seeking termination of the mandate of the Arbitrator (i.e. Superintending Engineer, Arbitration Circle, HPPWD, Solan) and appointment of a substitute Arbitrator.
2.
The petitioner had invoked Clause-24 of the Agreement executed between the parties seeking appointment of an arbitrator and the Superintending Engineer, Arbitration Circle, HPPWD, Solan, came to be appointed as sole Arbitrator, who 1 Whether the reporters of Local Papers may be allowed to see the judgment?
entered upon a reference on 11.01.2012. The statement of claim was filed by the petitioner in the 4th hearing held on 05.10.2013. It is averred in the Application that as many as nineteen hearings have taken place, however, the arbitration proceedings have not been concluded. On 30.11.2016, the Arbitrator directed the parties to amicably resolve the disputes and a meeting was convened in the office of the Superintending Engineer, 1st Circle, HPPWD, Mandi.
The petitioner then approached the said Authority, but there was no outcome.
3.
It is pointed out that neither the Authority to whom the matter was delegated for amicable settlement by the Arbitrator had taken the matter further nor the Arbitrator had decided the reference despite lapse of more than ten years. It is further pointed out that there was no regular incumbent on the post of Superintending Engineer, Arbitration Circle, HPPWD, Solan, for the last one year.
4.
There is no reply-affidavit filed by the respondents, opposing the Application.
5.
The learned counsel for the petitioner has invited attention of the Court to Section 14 of the Act (as it stood at the relevant time), which reads as under:
“14. Failure or impossibility to act.
(1) The mandate of an arbitrator shall terminate
and
he
shall
be
substituted
by
another
arbitrator, if—
(a) he becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay;
and
(b) he withdraws from his office or the
parties agree to the termination of his
mandate.
(2) If a controversy remains concerning any of the grounds referred to in clause (a) of sub-section
(1), a party may, unless otherwise agreed by the parties, apply to the Court to decide on the termination of the mandate.
(3) If, under this section or sub-section (3) of section 13, an arbitrator withdraws from his office or a party agrees to the termination of the mandate of an arbitrator, it shall not imply acceptance of the validity of any ground referred to in this section or sub-section (3) of section 12.”
6.
In the present case, the arbitral proceedings are pending since the year 2012, and despite passage of more than
ten years, the Arbitrator has not held any effective hearing and the closure of the arbitral proceedings is nowhere in sight.
7.
Having regard to the facts and circumstances of the case, I have no hesitation in holding that the Arbitrator has become de jure or de facto unable to perform his functions and has failed to act without undue delay and a case is made out by the petitioner for this Court to exercise powers under Section 14(1)(a) of the Act. Hence, the following order:
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O R D E R
(i) Mr. N.K. Sood, Senior Advocate, is appointed as substitute Arbitrator to adjudicate the disputes and differences between the parties under the Agreement, in place of the Superintending Engineer, Arbitration Circle, HPPWD, Solan, whose mandate shall stand terminated;
(ii) The learned Arbitrator, before entering the arbitration reference, shall forward a statement of disclosure as per the requirement of Section 11(8) read with Section 12(1) of the Arbitration and Conciliation Act, 1996, to the Registrar (Judicial) of this Court (to be placed on record of this application) and a copy thereof be forwarded to the parties;
(iii) The parties shall appear before the Arbitrator on a date which may be fixed by the learned Arbitrator, not later than four weeks from the date of receipt of copy of this order by him;
(iv) The fees payable to the Arbitral Tribunal shall be as prescribed in the Fourth Schedule appended to the Arbitration and Conciliation Act, 1996;
(v) Office to forward a copy of this order to the learned Arbitrator on the following address: “Mr. N.K. Sood, Senior Advocate, 4, Pandit Padem Dev Complex, Phase-1, The Ridge, Shimla, H.P.”
8. The Application is allowed in the above terms.
( A.A.Sayed )
Chief Justice
December 30, 2022 (hemlata)