“Unilateral appointment of arbitrator is unsustainable”
[Case Brief] Score Information Technologies Limited Vs. Gr Infra Projects Limited
Score Information Technologies Limited Vs. Gr Infra Projects Limited
O.M.P. (T) (COMM.) 59/2020
Delhi High Court
January 28, 2021
Section 12 of Arbitration and Conciliation Act, 1996
- BRIEF FACTS AND PROCEDURAL HISTORY:
- The petitioner filed the present petition under Sections 14 and 15 of the Arbitration and Conciliation Act, 1996 (hereinafter the ‘A&C Act’), inter alia, seeking that the mandate of the learned Sole Arbitrator unilaterally appointed by the respondent be terminated. According to the petitioner, the learned Arbitrator was de jure unable to act as an Arbitrator under the A&C Act.
- ISSUE BEFORE THE COURT:
- Whether the petitioner has waived the applicability of Section 12(5) of the A&C Act.
- RATIO OF THE COURT:
- The petitioner contended that the unilateral appointment of the arbitrator was contrary to various decisions including the judgment of the Supreme Court in Perkins Eastman Architects DPC and Anr. v. HSCC (India) Limited: Arbitration Application No 32 of 2019 decided on 26.11.2019.
- This court heavily relied upon Perkins Eastman judgement and held that in terms of the proviso to Sub-section 12(5) of the A&C Act, the parties may waive the applicability of Section 12(5) of the Act. However, the said waiver has to be (i) subsequent to the disputes having arisen; and (ii) made by way of “an express agreement in writing”. Concededly, in this case, there was no written agreement between the parties, whereby the petitioner has agreed to waive the applicability of Section 12(5) of the A&C Act.
- This Court was also unable to accept that the proceedings recorded by the Arbitrator would constitute such an express agreement in the facts of this case. The petitioner had pointed out that on that date, its representatives were not assisted by any counsel. It was also submitted by the petitioner that the proceedings of the day, which are not signed by the parties, incorrectly record that the petitioner had no objection for the appointment of the learned Arbitrator. The petitioner had immediately on receipt of the notice of appointment of the learned Arbitrator, had objected to such appointment.
- It was noted that the petitioner had in its letter dated 23.12.2019, clearly stated that it had not submitted to the jurisdiction of the learned Sole Arbitrator. Although the petitioner had not specifically referred to its objection to the respondent unilaterally appointing the learned Arbitrator, it nonetheless, had expressed its opposition to the appointment of learned Arbitrator. Thereafter, the petitioner had objected to the appointment of the learned Arbitrator and contended that the respondent had appointed the Arbitrator as a dilatory tactic to withhold the payments due to the petitioner.
- Thus, the court refused to accept that the petitioner had not objected to the appointment of the learned Arbitrator. Subsequently, by an email dated 10.09.2020, the petitioner had expressly stated that the unilateral appointment of the Tribunal is contrary to the decision of the Supreme Court in Perkins Eastman Architects DPC and Anr. v. HSCC (India) Limited (supra).
- DECISION HELD BY COURT:
- The petition was allowed.
- The mandate of learned Arbitrator unilaterally appointed by the respondent was terminated.
- Justice (Retired) R.C. Chopra, a former judge of this Court was appointed as the Sole Arbitrator to adjudicate the disputes that have arisen between the parties in connection with the Work Order dated 11.08.2015