M/S. NATIONAL PROJECTS CONSTRUCTION CORPORATION LTD. v. M/S. KONKAN RAILWAY CORPORATION LTD.

15. It is further asserted that the objection taken to the appointment of Shri Shahzad Shah as a Co-Arbitrator is also not been tenable since he is the nominee of the petitioner himself. Secondly, appointment of the same Arbitrator in another dispute is not a ground for disqualification under A & C Act, 1996. Section 12(1)(a) of A & C Act, 1996 mandates disclosure only if their exists direct or indirect, past or present relationship or interest in relation to the subject matter of the dispute which is likely to give rise to justifiable doubts as to is independence and impartiality. The objections to the independence of Shri Shahzad Shah is, therefore, not tenable.

16. Further, the respondent has asserted that the petitioner has no objection to the appointment of Shri Aditya Kumar Mittal, who is the Presiding Arbitrator. If the appointment of Shri Arvind Kumar Dwivedi and Shri Shahzad Shah as Co-Arbitrators is found to be ineligible in terms of Section 12 of A & C Act, 1996, the Co-Arbitrators may be appointed by this Court by adopting a procedure as mentioned in the Arbitration Agreement dated 30th August, 2006 by adhering to the qualifications of the Arbitrator which are as under: “(a) The Arbitral Tribunal shall consist of Gazetted Railway Officers not below Junior Administrative Grade (b) If one or more of Arbitrators is unable to function as Arbitrator, a substitute Arbitrator may be appointed in the same manner as outgoing Arbitrator.”

17. It is further submitted that both the petitioner and the respondent are PSUs. The amounts spent on arbitration come from the public funds. Clause 6 of the Arbitration Agreement provides a fee structure to which the parties had agreed. The petitioner on its own volition has participated in the constitution of the present Arbitral Tribunal and also taken part in the Arbitration proceedings held by the present Arbitral Tribunal and has submitted to its jurisdiction without any demur. When the Tribunal directed the petitioner to submit its Claims, the petitioner has failed to do so in its first meeting before the Tribunal on 10th June, 2021.

18. It is further asserted that the Arbitration Agreement was executed and signed by both the parties on 30th August, 2006, while A & C Act, 1996 has been amended w.e.f. 23rd October, 2015 and the new eligibility criteria has been introduced under Section 12 read with 5th and 7th Schedules of A & C Act, 1996. Long after the said amendment, the petitioner has participated in the formation of the Arbitral Tribunal in terms of agreed procedure as late as on 15th January, 2021 and till August, 2021. It is not permitted now to challenge the provisions of the Arbitration Agreement dated 30th August,

2006.

19. It is further submitted that even if the Court deems it appropriate to reject the objections of the respondent, the appointment of Presiding Arbitrator, Shri Aditya Kumar Mittal may not be disturbed, while two Co-Arbitrators, namely, Shri Amit Kumar Dwivedi and Shri Shahzad Shah, may be changed. It is also submitted by the respondent that the Northern Railway had prepared a large list of arbitrators for the USBRL Project which addresses the observations of the Hon’ble Apex Court in the case of VoestalpineSchienen GMPH v. Delhi Metro Rail Corporation Limited (2017) 4 SCC 665. The petitioner may be directed to choose its nominee from the said Panel with an option to the respondent to choose to nominate a retired Railway Officer, keeping in mind the necessity of financial and technical expertise of the Tribunal. Moreover, the fee structure of the Tribunal has to be commensurate with the fee structure of the Arbitrators of PSUs.

20. Learned counsel on behalf of the petitioner has argued that the Tribunal proceedings have been a non-starter since 2011. The mandate of the Arbitral Tribunal has been terminated ten times. Furthermore, Clause 2.6.[5] prescribed time limit for commencement of Award, which has been blatantly violated. The Principal Arbitrator, Shri Aditya Kumar Mittal has been the Member of Railway Board. The Railways have 51% interest in the respondent and thus, it cannot be said that Shri Aditya Kumar Mittal is not disqualified under Section 12 of A & C Act read with the observations of the Hon’ble Supreme Court in the case of Voestalpine Schienen GMPH vs. Delhi Metro Rail Corporation Limited (supra). Shri Aditya Kumar Mittal, while accepting the appointment, has not agreed to the fee structure as has been proposed in terms of the Arbitration Agreement. Shri Shahzad Shah, the Co-Arbitrator has furnished an incorrect declaration under Section 12 of A & C Act, 1996 by not disclosing the he was an Arbitrator in another matter in which the respondent was a party and where the Award has been announced on 23rd May, 2021. The declaration so furnished by Shri Shahzad Shah was not in consonance with Section 12 of A & C Act, 1996.

21. It is, therefore, argued that the mandate of the entire Tribunal needs to be terminated. A request is made that considering the Tribunal has not been able to function, a Sole Arbitrator may be appointed.

22. Learned counsel on behalf of the respondent has argued that admittedly the Arbitral Tribunal constituted since 2011 was unable to function but it cannot be overlooked that the appointment of the present Arbitral Tribunal was undertaken in 2020 and the petitioner had participated and nominated its own Arbitrator. The first meeting was held by the Tribunal on 10th June, 2021 in which the nominee of the petitioner had also participated. He even appeared before the Arbitral Tribunal and the subsequent objections taken to the Members of the Arbitral Tribunal are not tenable in terms of Sections 14 and 15 of A & C Act, 1996.

23. In the end, learned counsel on behalf of the respondent has submitted that there is no objection to the substitution of the Co-Arbitrator, Shri Arvind Kumar Dwivedi but it is insisted that the Tribunal may be constituted comprising of Railway Officers, considering the complexity of the issues to be considered by the Tribunal.

24. Submissions heard.

25. The present petition has been filed under Sections 14(1) and 15(2) of A & C Act, 1996 seeking termination of the mandate of the Arbitral Tribunal of three Arbitrators and for appointment of retired High Court Judge/Judges as Co-Arbitrators and the Presiding Arbitrator.

26. The first objection which has been taken is that that the arbitration proceedings were initiated in the year 2011 and till date the proceedings before the Arbitrator has been a non-starter. The Arbitral Tribunal has been reconstituted 10 times and even now objections have been raised in regard to the names of the Arbitrator.

27. To understand the scope of the petition, it would be significant to reproduce Section 14 of A & C Act, 1996 which reads as under: “Section 14: – Failure or impossibility to act.– (1) The mandate of an arbitrator shall terminated and he shall be substituted by another arbitrator, if– (a) he becomes de jure or de factor 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.”

28. Section 15 of A & C Act, 1996 further provides for termination of mandate and substitution of Arbitrator which reads as under: “Section 15: – Termination of mandate and substitution of arbitrator.– (1) In addition to the circumstances referred to in section 13 or section 14, the mandate of an arbitrator an arbitrator shall terminate– (a)where he withdraws from office for any reason; or (b)by or pursuant to agreement of the parties. (2) Where the mandate of an arbitrator terminates, a substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced. (3) Unless otherwise agreed by the parties, where an arbitrator is replaced under sub-section (2), any hearings previously held may be repeated at the discretion of the arbitral tribunal. (4) Unless otherwise agreed by the parties, an order or ruling of the arbitral tribunal made prior to the replacement of an arbitrator under this section shall not be invalid solely because there has been a change in the composition of the arbitral tribunal.”

29. From conjoint reading of Sections 14 and 15, it is evident that the mandate of an Arbitrator shall terminate, if he becomes de jure or de facto unable to perform his functions and he withdraws from his office or the parties agreed to the termination of his mandate.

30. In both the situations, it is only the mandate of the Arbitrator which comes to an end and, therefore, provision is made for the appointment of substitute Arbitrator who can continue from the stage where the earlier Tribunal left the proceedings. For this, a reference may be made to the decision in Chemical Sales Corporation vs. A & A Laxmi Sales and Service Private Limited (2011) SCC OnLine Del 3847, wherein the Co-ordinate Bench of this Court observed that the termination of arbitral proceedings is different from the termination of the mandate of Arbitrator. The mandate of the Arbitrator depending upon the facts and circumstances of the case may come to an end, but not the arbitral proceedings. For example, if the parties to the Arbitration Agreement had fixed a period of six months from the completion of arbitral proceedings and the Arbitral Tribunal fails to do so, the mandate of the Arbitral Tribunal shall come to an end, but not the arbitration proceedings and in such eventuality, the substitute Arbitrator, if appointed, shall continue with the arbitration proceedings from the stage where it had been left by the earlier Arbitrator. Similarly, in a recent decision in the case of SREI Infrastructure Finance Limitd vs. Tuff Drilling Private Limited (2017) SCC OnLine SC 1210, wherein the Hon’ble Supreme Court highlighted the distinction between termination of arbitral proceedings and termination of the mandate of the Arbitrator. In the first case, since the proceedings itself do not survive there is no scope for the appointment of a substitute Arbitrator whereas in the second case of termination of the mandate of the Arbitrator, the proceedings survive thereby leaving the scope for appointment of a substitute Arbitrator.

31. In the present case, it is an undisputed fact that the Arbitral Tribunal has not been able to function since its first appointment in the year 2011. It has not been challenged that the proceedings were a non-starter.

32. In Department of Economics Policy and Development of the City of Moscow vs. Bankers Trust Co. (2004) EWCA Civ 314, wherein Mance, L.J. succinctly summed up the objective of the Act by stating that Arbitration Act was enacted by the Parliament to encourage and facilitate a reformed and more independent as well as private and confidential system by a consensual dispute resolution with only limited possibilities of court involvement where necessary in the interest of public and basic fairness.

33. The main principles of arbitration law are: (i) speedy, inexpensive and fair trial by an impartial tribunal; (ii) party autonomy; and (iii) minimum court intervention. This provision of the Act has to be applied purposively in case of doubt; regard should be had to these principles.

34. In Union of India (UOI) vs. Singh Builders Syndicate (2009) 4 SCC 523, wherein it has been observed that the pendency of arbitration proceedings for over a decade, the court found it to be a mockery of the process. The court expressed its anguish in the following manner: “15. The object of the alternative dispute resolution process of arbitration is to have expeditious and effective disposal of the disputes through a private forum of the parties’ choice. If the Arbitral Tribunal consists of serving officers of one of the parties to the dispute, as members in terms of the arbitration agreement, and such tribunal is made non-functional on account of the action or inaction or delay of such party, either by frequent transfers of such members of the Arbitral Tribunal or by failing to take steps expeditiously to replace the arbitrators in terms of the arbitration agreement, the Chief Justice or his designate, required to exercise power under Section 11 of the Act, can step in and pass appropriate orders.

16. We fail to understand why the General Manager of the Railways repeatedly furnished panels containing names of officers who were due for transfer in the near future. We are conscious of the fact that a serving officer is transferred on account of exigencies of service and transfer policy of the employer and that merely because an employee is appointed as arbitrator; his transfer cannot be avoided or postponed. But an effort should be made to ensure that officers who are likely to remain in a particular place are alone appointed as arbitrators and that the Arbitral Tribunal consisting of serving officers, decides the matter expeditiously.

17. Constituting Arbitral Tribunals with serving officers from different far-away places should be avoided. There can be no hard-and-fast rule, but there should be a conscious effort to ensure that the Arbitral Tribunal is constituted promptly and arbitration does not drag on for years and decades.

18. As noticed above, the matter has now been pending for nearly ten years from the date when the demand for arbitration was first made with virtually no progress. Having regard to the passage of time, if the Arbitral Tribunal has to be reconstituted in terms of Clause 64, there may be a need to change even the other two members of the Tribunal.”

35. Considering the delay, even the proper constitution of the Arbitral Tribunal to be able to make any progress in the adjudication of claims, it can be easily concluded that there is a de facto and de jure inability on the part of the Arbitrators to conduct the arbitration. This in itself is a sufficient ground to allow the petition under Sections 14 and 15 A & C Act, 1996.

36. The other ground which has been asserted by the petitioner is that though Shri Aditya Kumar Mittal is the Presiding Arbitrator and Shri Shahzad Shah, Financial Commissioner (Retd.) as Co-Arbitrator, nominee of the petitioner accepted their appointment but in the first meeting held on 10th June, 2021, they both did not accept the fee structure as stipulated in Annexure-A of the Letter dated 17th February, 2021 providing for appointment letter. The Co-Arbitrator, Shri Amar Prakash Trivedi, being the Railway Employee, bound by the Service Rules, however, he accepted the fee structure stipulated by the respondent. This aspect was considered by the Co-ordinate Bench of this Court in the decision of National Highways Authority of India vs. Gammon Engineers and Contractors Pvt. Ltd., 2018 SCC OnLine Del 10183, decided on 20th July, 2018, wherein a similar objection has been taken that the Arbitral Tribunal has failed to abide by the condition fixed in the Arbitration Agreement or by the petition in its circular, it should be deemed as de jure and de facto unwillingness on the part of the Arbitrators to perform their functions thereby leading to termination of the mandate of the Tribunal.

37. Union of India (UOI) vs. Singh Builders Syndicate (supra), the Hon’ble Supreme Court expressed its dismay over the disagreement over the fee/fee being charged by the Arbitral Tribunal and observed that when an Arbitrator is appointed by a court without indicating fees either both parties or at least one part has disadvantage. Firstly, the parties will be constrained to agree to the fee whatever is suggested by the Arbitrator if high fee is claimed by the Arbitrator to which one agrees, the other party has to reluctantly pay such high fee even if it is unable to afford and is put in an embarrassing position. It was observed that what is found to be objectionable; parties being forced to go to an Arbitrator appointed by the Court and then being forced to agree for a fee fixed by such Arbitrator. To answer these concerns expressed by the Hon’ble Supreme Court in the case of Union of India (UOI) vs. Singh Builders Syndicate (supra), the Law Commission of India in its Report No. 246 observed that the high costs associated with the Arbitrator, including the arbitrary, unilateral and disproportionate fixation of fee by several Arbitrators. Some mechanism to rationalize fee structures must be set in place. Based on this recommendation of the Law Commission of India, the Arbitration and Conciliation (Amendment) Act, 2015 introduced Schedule IV of A & C Act,

1996. Though it is not mandatory, but provides for a reasonable fee structure that may be adopted by the High Court while appointing the Arbitrator under Section 11 of A & C Act, 1996.

38. In National Highways Authority of India vs. Mr. K.K. Sarin & Ors. (2009) SCC OnLine Del 764, it was observed that it agreed with the Senior Counsel for the petitioner that the Arbitrators are bound by the Agreement between the parties as to the payment of the fee and if the fee is not acceptable to them, they are free not to accept an Office of the Arbitrator or to recues themselves and not demand a fee in supersession of the Agreement.

39. In Madras Fertilizers Limited vs.

SICGIL India Limited & Hon’ble Mr. Justice V. Ratnam (Retd.) (2007) SCC OnLine Mad 748, it was held that a party cannot be forced to pay a fee higher than what is capable of paying to the Arbitrator. Considering the long-drawn controversy with regard to the fixation of fee by the second respondent due to which the arbitration proceedings could not make headway. It was held in totality of the facts and circumstances that the Arbitrator had become de jure unable to perform his functions effectively warranting termination of mandate under Section 14(1)(a) of A & C Act, 1996.

40. In National Highways Authority of India vs. Gammon Engineers and Contractors Pvt. Ltd. (supra), it was held that where that the Arbitral Tribunal is bound by the Arbitration Agreement between the parties which is the source of its power and it cannot accept the payment in part and re-write the Agreement in respect of other aspects. In the present case as well, while the appointment has been accepted by Shri Aditya Kumar Mittal and Shri Shahzad Shah, but they have expressed their reservation about the fee structure which tantamount to modification of their appointment as Arbitrators. It amounts to them both being de jure and de facto unable to perform their duty as the Arbitrator and the term is liable to be terminated under Sections 14 and 15 of A & C Act, 1996.

41. The third objection that has been raised on behalf of the petitioner that Shri Amar Prakash Trivedi is the employee of the Railways which is a party and which has a major shareholding in the respondent-Company, and he, therefore, cannot be appointed as the Arbitrator in view of the specific power under Section 12(5) of A & C Act, 1996.

42. The fourth objection that has been taken that Shri Arvind Kumar Dwivedi who is the Co-Arbitrator has been on the Board of Directors of the respondent-Company since 2018 to November, 2019. It is claimed that the appointment of any nominee to the Board is in public knowledge and since the petitioner has already appeared before the Arbitral Tribunal, no objection can be taken to his appointment.

43. In view of the judgment of the Hon’ble Supreme Court in Bharat Broadband Network Limited vs. United Telecoms Limited 2019 SCC OnLine SC 547, wherein it has been held that where the Arbitrator has been appointed by the party itself unilaterally, the mandate may be terminated and a substitute Arbitrator may be appointed.

44. The Supreme Court in the case of TRF Ltd. vs. Energo Engineering Projects Ltd. (2017) 8 SCC 377 held that the test for determination of competence of an Arbitrator proposed to be appointed was: “whether he would have an interest in the outcome of the dispute”. The element of eligibility was relatable to the interest that he had in the decision. The decision of the Apex Court in Perkins Eastman Architects DPC & Anr. vs. HSCC (India) Ltd. AIR 2020 SC 59 recognizes the importance of ensuring that the Arbitrator having an interest in the outcome of the matter is not appointed so as to obviate any doubt as to the impartiality and independence of Arbitral Tribunal.

45. In Proddatur Cable TV DIGI Services vs. Siti Cable Network Ltd. 2020 SCC OnLine Del 350, the Co-ordinate Bench of this court observed that one has to see the rationale and reasoning behind the judgment in the case of Perkins Eastman Architects DPC & Anr. vs. HSCC (India) Ltd. (supra) which is to ensure that the Arbitrator sought to be appointed has no interest in the outcome of the case.

1. Generally, the mode of appointment of the Arbitrator may be delineated as under:

(i) Unilateral appointment of Sole Arbitrator by one party;

(ii) Where the Managing Director is to be appointed as an

46. In Perkins Eastman Architects DPC & Anr. vs. HSCC (India) Ltd. (supra), the arbitration clause provided for appointment of the Managing Director as the Sole Arbitrator. A reference was made to Pratapchand Nopaji vs. Kotrike Venkata Setty & Sons (1975) 2 SCC 208 wherein the three Judge Bench of the Supreme Court applied the maxim “qui facit per allium facit per se”, which is reproduced as under:

47. In Perkins Eastman Architects DPC & Anr. vs. HSCC (India) Ltd. (supra) this principle was endorsed and it was observed that if the nomination of an arbitrator by an ineligible arbitrator is allowed, it would tantamount to carrying on the proceedings of the arbitration by the Managing Director himself. The ineligibility strikes at the root of his power to arbitrate or get it arbitrated upon by a nominee. The procedure of appointment of a Managing Director of a Company as the Sole Arbitrator or any arbitrator so appointed by the MD of the Company was held to be hit by vice of bias and impartiality. The Managing Director or an Arbitrator so nominated by him may be objective or individual of respectability, but the irresistible conclusion is that once the Arbitrator having become illegible by operation of law, he cannot nominate another person as an Arbitrator. It is inconceivable in law that any person who is statutorily ineligible can nominate a person. Such MD or a nominee of the MD becomes ineligible on account of the prescriptions contained in Section 12(5) of the Act. Once, an infrastructure collapses, the superstructure is bound to collapse. To put it differently, once the identity of the Managing Director as the Sole Arbitrator is lost, the power to nominate someone else as an Arbitrator is obliterated.

(iii) Where the Company unilaterally is empowered to appoint the Sole Arbitrator.

48. Where a Company is empowered to nominate an Arbitrator suffers from the same disability as the Managing Director or his nominee. This was specifically considered by the Co-ordinate Bench in the case of Proddatur Cable TV (supra), wherein applying a test of a person being interested in the outcome of the arbitration, it was observed that a Company functions through its Board of Directors who according to Section 166 of the Company’s Act, 2013 are under a duty to act in good faith to promote the objects of the Company and act in the best interest of the Company, its employees and shareholders. A Director shall not involve in a situation in which he may have a direct or indirect interest that conflicts or possibly may conflict with the interest of the Company. It is thus, shown that the Directors of the Company as part of the Board of Directors, would be interested in the outcome of the arbitration proceedings. The Company, therefore, acting through its Board of Directors would suffer the ineligibility under Section 12(5) read with Schedule 7 of the Act.

49. It may thus be concluded that the appointment of a Sole Arbitrator by one party or the company or appointment of the Managing Director or its nominee as the Arbitrator does not meet the test of impartiality and independence and is hit by the bar of Section 12(5) of the Act and are inherently incapable of being appointed as the Arbitrator as has been held in the various judgments and Shri Arvind Kumar Dwivedi and Shri Shahzad Shah are disqualified under Section 12 of A & C Act, 1996 to continue as Arbitrators.

50. The petitioner has been able to establish valid grounds for termination of the mandate of three Arbitrators who had been appointed to constitute the Arbitral Tribunal having so held that the question which arises is whether an Arbitral Tribunal needs to be constituted or a Sole Arbitrator may be appointed as requested by the petitioner.

51. The Arbitration Clause 2.[2] of Arbitration Agreement dated 30th August, 2006 reads as: “Clause 2.2– The Arbitral Tribunal shall consist of a panel of three Gazetted Rly. Officers not below JAG grade, as the arbitrators. For this purpose, the Corporation will send a panel of more than 3 names of Gazetted Rly. Officers of one or more departments of the Railway, to the contractor who will be asked to suggest to Managing Director/KRCL, up to 2 names out of panel for appointment as contractors nominee. The Managing Director/KRCL shall appoint at least one of them as the contractors nominee and will, also simultaneously appoint the balance member of Arbitrators either from the panel or from outside the panel, duly indicating the Presiding Arbitrator from amongst the 3 Arbitrators so appointed. While nominating the Arbitrators, it will be necessary to ensure that one out of them is from the Accounts Department.”

52. The Arbitration Clause thus envisages that an appointment of Arbitral Tribunal comprising a Presiding Arbitrator and one nominee Arbitrator of both the parties. The question is whether the Arbitral Tribunal needs to be constituted or one Arbitrator may be appointed as requested by the petitioner.

53. In Union of India (UOI) vs. U.P. State Bridge Corporation Ltd. (2015) 2 SCC 52, similar facts came for consideration wherein despite expiry of four years, the constitution of the Arbitral Tribunal could not be completed and the arbitral proceedings in the matter kept hanging due to transfers, retirements and adjournments etc. In the said case, this Court rejected the contention on behalf of the Government that the Court was not vested with any powers to appoint a Sole Arbitrator in contravention of the Arbitration Agreement between the parties. The Apex Court upheld the order of this Court appointing a Sole Arbitrator by observing that the order of the High Court terminating the mandate of the Arbitral Tribunal was flawless and the appointment of the Sole Arbitrator was upheld. In Union of India (UOI) vs. Singh Builders Syndicate (supra), as well, the appointment of a retired judge contrary to the Agreement requiring an appointment of specified officers as held to be valid on the ground of arbitration proceedings having been concluded for over a decade.

54. In Union of India (UOI) vs. Singh Builders Syndicate (supra), similar facts in hand came up for consideration and it was observed that the delays and frequent changes in the Arbitral Tribunal make a mockery of the entire process. In the said factual background, it was held that the appointment of a retired Judge of the Delhi High Court as the Sole Arbitrator instead of constituting an Arbitral Tribunal comprising of three Members does not call for interference and must be upheld.

55. The theory of forfeiture rights of the party under the Agreement to appoint its Arbitrators once the proceedings have been commenced came to be formally embedded in Deep Trading Company vs. Indian Oil Corporation & Ors. (2013) 4 SCC 35, wherein it was held that the rights of the under the Agreement to appoint its own Arbitrators stood forfeited once the matter was brought before the Court under Section 11(6) of A & C Act,

1996.

56. The resolution of disputes through Arbitrator is recognition of the fundamental principle of a party’s autonomy in the choice of procedure which implies if a particular procedure is prescribed in the Arbitration Agreement to which the parties have agreed then; it must be generally resorted to. This is because as a normal practice, the Court will insist the parties to adhere to the procedures to which they have agreed upon and this principle would apply even while making an appointment of substitute Arbitrator. However, this principle of party autonomy in the choice of procedure has been deviated in cases where one of the parties has committed default by not acting in accordance with the procedure prescribed. Many such instances where this course of action has been taken by the Court have been noted.

57. In North Eastern Railway vs. Tripple Engineering Works, AIR 2014 SC 3506 decided on 13th August, 2014, wherein it was observed that in the Government Contracts where Senior Officers like Managing Directors are nominated to Arbitral Tribunal to act as a Sole Arbitrator, while such clauses give dominant position to the Government to constitute the Arbitral Tribunal which has to be held to be valid, but at the same time, an onerous and responsible duty has been cast upon the persona designata to act independently and impartially and to devote adequate time in conducting the arbitration. If the persons/officers so nominated are unable to devote time or become incapable of acting as Arbitrators, then the principle of default procedure at least in the case where Government has assumed the role of appointment of Arbitrator to itself, has to be applied and the Court may step into to appoint the Arbitrator by keeping aside the procedure which is agreed to between the parties.

58. In the present case as well, as has been demonstrated, the arbitral proceedings have been a non-starter and have not been commenced even after 11 years and considering that the constitution of the Arbitral Tribunal of three Members has not fructified despite all efforts and further considering that at least two of the members appointed are not willing to work on the fee structure offered by the respondent.

59. It is a fit case where the Court may assume jurisdiction and appoint one Sole Arbitrator to ensure that the proceedings are conducted expeditiously and disposed of in a timely manner.

60. It is thus, concluded that there exists a valid written Arbitration Agreement between the parties and arbitrable disputes have been raised by the petitioner. In the light of the facts and submissions, Mr. Justice Swatanter Kumar, Judge (Retd.) Supreme Court of India, Mobile NO. 9560413636, is hereby appointed as the independent Arbitrator to adjudicate the disputes between the parties.

61. The parties are at liberty to raise their respective objections before the Arbitrator. Any observations made herein are not an expression on the merits of this case and are without prejudice to the rights and contentions of the parties.

62. The fees of the learned Arbitrator would be fixed in accordance with the Fourth Schedule to A & C Act, 1996 or as may be otherwise agreed between the Arbitrator and the parties.

63. This is subject to the Arbitrator making necessary disclosure as under Section 12(1) of A & C Act, 1996 and not being ineligible under Section 12(5) of the A & C Act, 1996. The parties are at liberty to approach the learned Arbitrator.

64. Learned counsels for the parties are directed to contact the learned Arbitrator within one week of being communicated a copy of this Order to them by the Registry of this Court.

65. A copy of this Judgement be also communicated to the learned Arbitrator.

66. The petition is accordingly allowed in the above terms. The pending application is disposed of.

JUDGE NOVEMBER 11, 2022 S.Sharma