Full Text
HIGH COURT OF DELHI
Date of Decision: 17.03.2025
RAHUL VERMA SOLE PROPRIETOR OF M/S JAI SHREE NATHJI LOGISTICS (INDIA) .....Petitioner
Through: Mr. Hari Kishan, Adv.
Through: Mr. SC Rajpal, Mr. Varun Rajpal, Advs.
JUDGMENT
1. This is a petition filed under section 11(5) and (6) of the Arbitration and Conciliation Act, 1996 seeking appointment of an Arbitrator to adjudicate the disputes between the parties arising out of the Contract Agreement bearing No. CON/DD/2012/B.A/32 dated 14.05.2012 (“agreement”).
2. The arbitration clause is contained as clause 6.12 of the said agreement and the same reads as under: “6.12 ARBITRATION: 6.12.[1] Any dispute between the Business Associate and CONCOR will be resolved amicably by mutual consultations or through the good offices of the Director Domestic/CONCOR. However, if such resolution is not possible, then, the unresolved disputes or differences shall be referred to an arbitrator, to be nominated by the Director Domestic/CONCOR. The Arbitration and Conciliation Act 1996 shall be applicable to the arbitration under this clause. The award of arbitrator shall be binding upon both parties to the dispute. 6.12.[2] The services under this agreement shall be continued during the Conciliation/arbitration proceedings, unless it is proved that the services cannot possibly be continued during the arbitration proceedings”
3. The facts are that the petitioner is engaged in the business of domestic cargo logistic works for various Government Departments. The petitioner entered into the agreement with the respondent for promotion of domestic cargo logistics etc, whereby, the petitioner was to perform the function of booking and transportation of cargo from major centers of production and consumption for and on behalf of the respondent. The agreement was thereafter, extended from time to time.
4. Since, the respondent failed to adhere to the terms of the agreement, the petitioner invoked arbitration in terms of clause 6.12 vide legal notice dated 30.12.2017.
5. The said legal notice was responded by the respondent vide letter dated 06.02.2018 which is reproduced below: -
6. Thereafter, the petitioner replied to the aforesaid letter vide letter dated 12.02.2018 which reads as under: -
7. Pursuant thereto, the respondent appointed a sole arbitrator, who passed the arbitral award dated 28.08.2019 disallowing all the claims of the petitioner. The petitioner challenged the said arbitral award by filing a petition under Section 34 of the Arbitration and Conciliation Act, 1996, which was dismissed by the learned District Judge (Commercial Court-03), South-East District, Saket Courts, New Delhi on merits as well as on the grounds of delay.
8. Mr. Kishan, learned counsel for the petitioner states that unilateral appointment of the arbitrator is hit by virtue of Section 12(5) of the Arbitration and Conciliation Act and in this regard, relies upon the judgment passed by a coordinate bench of this court in O.M.P.(T)(COMM.) 16/2021, dated 12.11.202, titled Delhi Integrated Multi Modal Transit Systems Ltd. vs. Delhi Jal Board and more particularly paragraphs 27 and 34 which read as under:-
This Court is of the view that the appointment of the learned Arbitrator was made unilaterally by the respondent without reference to the petitioner.......
34. This Court is of the view that the decision in Bharat Broadband Network Limited v. United Telecoms Limited (supra) is applicable in the facts of this case. Although the petitioner had participated in the arbitral proceedings before the learned Arbitrator, the same cannot be construed as the petitioner waiving its right under Section 12(5) of the A&C Act. Once it is held that the appointment of the learned Arbitrator has been made unilaterally by the CEO of the respondent, it would follow that the said appointment is void ab initio.”
9. I have heard learned counsel for the parties.
10. It is an admitted fact that the petitioner, on 12.02.2018, gave a no objection to the appointment of an arbitrator by the respondent. Thereafter, an Arbitral Award came to be passed on 28.08.2019, disallowing all the claims of the petitioner. Aggrieved, the petitioner filed a petition under section 34 of the Arbitration and Conciliation Act, 1996 challenging the said award. The petitioner in the present petition, has primarily contended that the appointment of the arbitrator by the respondent is hit by section 12 (5) of the Arbitration and Conciliation Act, 1996 and therefore, a new arbitrator should be appointed.
11. I am unable to accept the submissions made by the petitioner.
12. In the petition filed under Section 34 of the Arbitration and Conciliation Act, 1996, the petitioner categorically agitated the issue of unilateral appointment by the respondent.
13. The learned District Judge, while dismissing the section 34 petition filed by the petitioner categorically adjudicated the issue regarding the appointment of the arbitrator by the respondent being violative of section 12(5) of the Arbitration and Conciliation Act. In this regard, paragraph 10 of the judgment reads as under:-
14. Once the learned Sessions Court has categorically recorded a finding that the petitioner had given an unconditional consent/NOC for the appointment of the arbitrator, the only remedy available to the petitioner, if aggrieved by such a finding, is to challenge the said order by filing an appeal under Section 37 of the Arbitration and Conciliation Act, 1996, assailing the order passed by the learned District Judge.
15. If the present petition is to be entertained and allowed by this Court, it would effectively amount to setting aside of the order passed by the learned District Judge under Section 34 of the Arbitration and Conciliation Act, 1996 by assuming the role of an Appellate Court under Section 37 of the Arbitration and Conciliation Act, 1996 which to my mind, cannot be so done. While exercising his rights under the Arbitration and Conciliation Act, 1996, the petitioner has invoked the jurisdiction of this Court under Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996, but the present case does not fall within any of the parameters of Section 11.
16. For the said reasons, I am not inclined to entertain the present petition and hence, the same is dismissed.