The Delhi HC in, M/S WORLD BUSINESS SOLUTIONS PRIVATE LIMITED v. M/S DELHI METRO RAIL CORPORATION LIMITED, relied on the findings of SC in Central Organization for Railway Electrification(CORE) v. ECI- SPIC-SMO-MCML and stated that the HC cannot appoint an arbitrator if a provision contrary to it exists in the agreement
Facts
There was a dispute between the petitioner and respondent and they had an arbitration agreement. The petitioner nominated an arbitrator. The stipulation in Article 8.1, whereby the DMRC was permitted to nominate the sole arbitrator was, it was contended, illegal, and unenforceable in view of the law.
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Contentions of Petitioner
It was contended that the DMRC could not be allowed to nominate arbitrators to arbitrate on the dispute between the petitioner and the respondent, in view of the law laid down in Perkins Eastman, as well as in TRF Limited v. Energo Engg. Projects Ltd.
Contentions of Respondent
The Counsel contended that the issue raised by the petitioner is no longer res Integra and stands concluded by the judgment of SC in Central Organization for Railway Electrification(CORE) v. ECI- SPIC-SMO-MCML.
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Judgment
In this judgment, disputes arose between two companies and the one approached the HC under Section 11(6)praying that a sole arbitrator be appointed by the High Court to arbitrate on the dispute. CORE contended, before the High Court, that the petition of the other company was not maintainable, as the arbitration clause required the arbitrator to be appointed out of the panel provided by CORE. However, an arbitrator was appointed by HC, but the same was challenged in SC. The Supreme Court adumbrated the issue arising for consideration, as “whether the High Court was right in appointing an independent arbitrator in contravention of the General Conditions of Contract”. The Supreme Court observed, that in its earlier decisions in Parmar Construction Co. and Pradeep Vinod Construction Co., the appointment of an independent arbitrator by the High Court, contrary to the provision for appointment of the arbitrator as contained in the arbitration agreement, was found not to be sustainable. The SC thus set aside the findings by HC.
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Findings of the Court
The Court observed that the petitioner relied on Voestalpine Schienen GMBH which appreciated the CORE judgement. The court stated, “In any event, on facts, those observations and suggestions have no application to the present case, as the persons included in the panel forwarded by the respondent to the petitioner, are, admittedly, retired Additional District Judges.”
The court also stated that the objections of the respondent are justified and his reliance on the judgment of the Supreme Court in Central Organisation for Railway Electrification is also well taken.
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The court while disposing the petition gave the petitioners the liberty to select, from the panel of three retired Additional District Judges, forwarded by the respondent to the petitioner, a sole arbitrator, to arbitrate on the disputes between the parties.
Case Details
O.M.P. (T) (COMM.) 71/2020
Counsel for Petitioners- Ms. Aditi Tomar and Ms. Ritika Gambhir Kohli, Advs.
Counsel for Respondents- Mr. Arjun Natarajan, Mr. Sasank Iyer and Mr. Mayank Sapra, Advs.
Coram- HON'BLE MR. JUSTICE C .HARI SHANKAR
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