TaxTMI 
TaxTMI 
2021 (8) TMI 1271
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.... MT of Duplicating Paper aggregating 1748 MT vide supply order dated 22.9.1993. According to the terms of the payment, 90% of the amount was to be paid by the respondent immediately after receipt of paper and balance 10% after receipt of the test report. According to the petitioner, it supplied 420 MT of cream wove and 238 MT of duplicating paper to the respondent but the respondent not only did not make the payment of 90% of the amount, as per the terms of the contract, but also rejected some consignment without any justification, causing huge loss to the petitioner. The respondent vide letter dated 15.11.1993 informed the petitioner that the paper supplied by them does not conform to the specification and therefore cannot be utilized. The petitioner made several representations to the respondent in the year 1993 seeking details and asserting that the paper meets the requirements which failed to invoke any response, much less positive response. The petitioner then filed a civil suit in the year 1994 for permanent injunction against the respondent in the Civil Court at Bhopal seeking to restrain them from awarding the supply order to the third party. The respondent, however, in the....
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....ion Department, (iii) Deputy Secretary, Department of Finance, (iv) Deputy Secretary/Under Secretary, General Administration Department and (v) Senior Deputy Controller of Head Office, Printing as Members. Learned counsel submitted that since the respondent/department itself is a party to the dispute, its officers, by virtue of Section 12(5) of the Act of 1996, are ineligible to perform as Arbitrator or members of the Arbitral Tribunal. Learned counsel for the petitioner in support of his argument has relied on the judgment of Supreme Court in TRF Ltd. vs. Energo Engineering Projects Limited reported in (2017) 8 SCC 377 wherein it was held that the person who has become ineligible to be appointed as the Arbitrator in terms of Section 12(5) of the Act of 1996, can neither continue as arbitrator nor can appoint anyone else as arbitrator. 4. It is contended that this Court in the case of M/s. HCL Technologies Limited Vs. Madhya Pradesh Computerization of Police Society (MPCOPS) (Arbitration Case No. 38/2020) decided on 26.2.2021, relying on the aforesaid judgment of the Supreme Court in the case of TRF Ltd. (supra) and another judgment of the Supreme Court in the case of Perkins East....
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....t the agreement was entered into between the petitioner and the Government of Madhya Pradesh in respect of supply of Cream Wove Paper and Duplicating Paper pursuant to supply order dated 22.9.1993. Clause 7 of that the agreement clearly provides that if any dispute in respect of this agreement or any provision thereof arises between the parties, or any matter in relation thereto, except in respect of matters declared to be conclusive in the agreement, every such dispute shall be referred to the Stationery Purchase Committee of the Government, Madhya Pradesh, Bhopal for arbitration, whose decision shall be final, conclusive and binding on the parties. Since the dispute between the parties arose and the petitioner filed Civil Suit for permanent injunction in the Civil Court, the respondent filed an application under Section 34 of the Arbitration Act, 1940 seeking stay of the proceedings on the ground of Arbitration Clause and the trial Court vide order dated 22.7.1999 rejected the said application. The respondent then filed revision petition before this Court, which was allowed vide order dated 3.5.2000 relegating the parties to avail the remedy of arbitration before the Stationery P....
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....d in (2020) 2 SCC 464 and Government of India Vs. Vedanta Ltd. reported in (2020) 10 SCC 1. 7. Alternatively, Shri Pushpendra Yadav, learned Additional Advocate General submitted that this Court has no jurisdiction to exercise the power under Section 14 of Arbitration & Conciliation Act. As per sub-section 2 of Section 14, if the controversy pertains to 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. The Court has been defined in Section 2(e) to mean in case of an arbitration other than international commercial arbitration, the Member of Civil Court of original jurisdiction in a district and includes High Court in exercise of its ordinary original civil jurisdiction having jurisdiction to decide the question forming subject matter of arbitration if same had been the subject matter of the suit. In the light of definition of Court, only a Civil Court including High Court exercising its original civil jurisdiction, has jurisdiction to entertain the application under Section 14 of the Act of 1996. Since the High Court of Madhya Pradesh does not have ori....
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....der by filing the Special Leave Petition before the Supreme Court, which was however dismissed as withdrawn vide order dated 28.9.2000. It was thereafter that the respondent constituted the Arbitral Tribunal, styled as Stationery Purchase Committee. The petitioner objected to the constitution of the Arbitral Tribunal by filing an application under Section 13 of the Act of 1996 on 12.9.2000. The Arbitral Tribunal however rejected the said application on 2.2.2001. The petitioner then filed a writ petition before this Court, which was also dismissed vide order dated 24.1.2017 with liberty to raise objection before the appropriate forum. Sheet anchor of the petitioner's argument is that in view of the law enunciated by the Supreme Court in TRF Ltd. (supra), all the five officers constituting the Stationery Purchase Committee, being employees of the respondent, have rendered themselves ineligible to continue as Arbitrators. Since they have become ineligible to continue as Arbitrators, they also cannot appoint another person as Arbitrator. It is contended that the original members of the Arbitral Tribunal, who initiated the proceedings have since ceased to hold their respective offic....
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....ubject matter of the dispute. 35. Where however the named arbitrator though a senior officer of the government/statutory body/government company, had nothing to do with execution of the subject contract, there can be no justification for anyone doubting his independence or impartiality, in the absence of any specific evidence. Therefore, senior officer(s) (usually heads of department or equivalent) of a government/statutory corporation/public sector undertaking, not associated with the contract, are considered to be independent and impartial and are not barred from functioning as Arbitrators merely because their employer is a party to the contract. *** *** *** 45. If the arbitration agreement provides for arbitration by a named Arbitrator, the courts should normally give effect to the provisions of the arbitration agreement. But as clarified by Northern Railway Administration [Northern Railway Admn. V Patel Engg. Co. Ltd. (2008) 10 SCC 240], where there is material to create a reasonable apprehension that the person mentioned in the arbitration agreement as the Arbitrator is not likely to act independently or impartially, or if the named person is not availa....
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....a Vs. Pradeep Vinod Construction Company (2020) 2 SCC 464, the respondent(s) were registered contractors with the Railways and the request of respondent(s) for appointment of arbitrator invoking Clause 64 of the contract was declined by the Railways stating that their claims have been settled and respondent(s) have issued "no claim" certificate and executed supplementary agreement recording "accord and satisfaction" and hence, the matter is not referable to arbitration. Reversing judgment of the High Court, the Supreme Court held that since request for appointment of arbitrator was made much prior to coming into force of Amendment Act, 2015, provisions of Amendment Act, 2015 shall not apply to arbitral proceedings in terms of Section 21 of the Principal Act unless the parties otherwise agree. Thus, request by respondent(s) contractors should be examined in accordance with the principal Act, 1996, without taking resort to Amendment Act, 2015. Reversing the judgment of the High Court, the Union of India was directed by the Supreme Court to appoint arbitrator in terms of Clause 64(3) of the agreement within a period of one month under intimation to the respondent(s) contractors. 15. ....
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....lectrification, supra in Paragraphs-31 & 39 of the judgment held as under: "31. As discussed earlier, as per the modified Clause 64(3)(b) of GCC, when a written and valid demand for arbitration is received by the General Manager, the Railway will send a panel of at least four names of retired railway officers empanelled to work as arbitrators. The contractor will be asked to suggest to the General Manager at least two names out of the panel for appointment as contractor's nominee within thirty days from the date of dispatch of the request by the Railway. Vide letter dated 27.07.2018, the respondent has sought for appointment of an arbitrator for resolving the disputes. The appellant by its letter dated 24.09.2018 (which is well within the period of sixty days) in terms of Clause 64(3)(a)(ii) (where applicability of Section 12(5) of the Act has been waived off) sent a panel of four serving railway officers of JA Grade to act as arbitrators and requested the respondent to select any two from the list and communicate to the office at the earliest for formation of Arbitration Tribunal. By the letter dated 26.09.2018, the respondent conveyed their disagreement in waiving the....
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....parties otherwise agree. In that case, proceedings before the Arbitral Tribunal continued till 17.8.2011 and thereafter, no progress was made. The respondent filed application under Sections 11 and 15 before the High Court on 13.5.2015 seeking appointment of an arbitrator for adjudication of the disputes and differences between the appellant and the respondent. The Supreme Court held that the respondent having participated in the proceedings before the Arbitral Tribunal for quite some time and also having expressed faith in the sole arbitrator, was not justified in challenging the appointment of Managing Director of appellant Corporation as the sole arbitrator. Further in the absence of any material to show that arbitrator had not acted independently or impartially, there could not be a presumption of bias or lack of independence on his part. It was held that the High Court was not right in appointing the arbitrator without keeping in view the terms of the agreement between the parties. In the present case too, the petitioner has not been able to produce any material to show any bias or partiality on the part of any of members of the Arbitral Tribunal and therefore failed to substa....