TaxTMI 
TaxTMI 
2017 (4) TMI 1617
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....spondent is the appointing authority authorised to appoint an Arbitrator. 3. The Petitioner was awarded the work of "Site Levelling and Infrastructure Works Package for Meja Thermal Power Project" (2 X 660 MW) by a letter of Award ('LoA') on 18th May 2010. A formal contract was entered into between the parties in respect of the aforesaid LoA on 21st September 2010. The contract has a mechanism for dispute resolution by way of arbitration. This is contained in Clause 56 of the General Conditions of Contract ('GCC') which reads as follows: "56. Except where otherwise provided for in the contract all questions and disputes relating to the meaning of the specifications designs drawings and instructions herein before mentioned and as of the quality of workmanship or materials used on the work or as to any other question, claim, right, matter or thing whatsoever in any way arising out of or relating the contract designs, drawing specifications, estimates, instructions orders or these conditions of otherwise concerning the work or the execution or failure to execute the same whether arising during the progress of the work or after the completion or abandonment ....
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.... arbitration by Mr. Narsingh, the Project Incharge of the Project. The said claim was registered as Arbitration Case No. 1 of 2013. The contract subsequently stood terminated and the Respondent raised a claim in the sum of Rs. 207,56,42,531 as on 4th March 2014 for the losses and expenses suffered on account of termination of the contract, together with interest @ 18% per annum. This dispute was also referred to the same sole Arbitrator and was numbered as Arbitration Case No. 1 of 2014. 6. The arbitration proceedings were held at Allahabad in Uttar Pradesh. At the stage of examination of witnesses, the sole Arbitrator on 12th August 2016 informed both parties of the change of his address for correspondence as follows: "Narsingh General Manager (PP&M-CEG) NTPC Ltd. NTPC Bhawan, Scope Complex Core 5, 2nd Floor, 7, Institutional Area, Lodhi Road, New Delhi-110003." 7. On the following day i.e. 13th August 2016 the sole Arbitrator further clarified as under: "In reference to change of correspondence address of Sole Arbitrator as communicated on 12.08.2016 M/s. RIPPL inquired whether he is Incharge of the Pro....
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....ition did not survive. It was submitted that the Petitioner could not insist upon the appointment of another Arbitrator by the Court. 13. Mr. P.V. Kapur and Ms. Kiran Suri, learned Senior counsel appearing for the Petitioner first submitted that the Respondent was bound to appoint a fresh Arbitrator within 30 days from 1st June 2016 the date on which Mr. Narsingh ceased to be an Arbitrator. Since that was not done, the Respondent should be taken to have waived its right appoint an Arbitrator under Clause 56 of the GCC. Reliance is placed on the decision in Datar Switchgears Ltd. v. Tata Finance Ltd. (2000) 8 SCC 151. Secondly, it is submitted that the arbitration clause in question states that the Arbitration Act 1940 (substituted by the Act by an amendment) and all amendments subsequent thereto would apply. It is accordingly submitted that the Act as amended with effect from 23rd October 2015 would apply and in that event the appointment of a General Manager of the Respondent as sole Arbitrator cannot be legally sustained. 14. Mr. Maninder Singh, learned ASG appearing for the Respondent on the other hand submitted that there was in fact no need to appoint any Arbitrator in p....
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....ivate Limited v. Anuradha Bhatia & Ors. 237 (2017) DLT 140 (DB) a Division Bench of this Court analysed the effect of the slight difference in the wording in the two sections. It referred to the decision in Thyssen Stahlunion Gmbh v. Steel Authority of India Limited 1999 (9) SCC 334 where the expression "in relation to" was examined. There the Supreme Court was examining the applicability of the Arbitration Act, 1940 which had been repealed in relation to arbitration proceedings that had commenced prior to the enactment of the said Act (i.e. the 1996 Act). The conclusions of the Supreme Court in the above decision were as under: "22. For the reasons to follow, we hold: 1. The provisions of the old Act (Arbitration Act, 1940) shall apply in relation to arbitral proceedings which have commenced before the coming into force of the new Act (the Arbitration and Conciliation Act, 1996). 2. The phrase "in relation to arbitral proceedings" cannot be given a narrow meaning to mean only pendency of the arbitration proceedings before the arbitrator. It would cover not only proceedings pending before the arbitrator but would also cover the proceedings before the cour....
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....ced on or after 23.10.2015, the Amending Act would apply and, therefore, the amended provisions of the said Act would be applicable." 19. As regards the first part of Section 26 of the Amendment Act it was held as under: "30. Now, if the argument of the respondents is to be accepted that the first limb of Section 26 applies only to arbitral proceedings in the sense of proceedings before arbitral tribunals and not to court proceedings, then, it is obvious that Section 26 is silent with regard to the second and third categories of cases to which we have already referred above. In other words, in respect of these categories, no contrary intention of retrospectivity is evinced upon a reading of Section 26 of the Amending Act. Therefore, even if we take the argument of the respondents to be correct, the result would still be the same and, that is, that in respect of all the arbitral proceedings commenced prior to 23.10.2015, the unamended provisions of the said Act would continue to operate till the enforcement of the award." 20. Ultimately the conclusions reached by the Division Bench were as under: "1) Section 26 of the Amending Act, if a narrow view of the exp....
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....is rejected. 23. The net result is that Section 12(5) as amended with effect from 23 rd October 2015 would apply. Section 12 (5) clearly prohibits the employee of one of the parties from being an Arbitrator. This would straightway disqualify Mr. Kher who happens to be a serving GM of the Respondent. Therefore it is to no avail that the Respondent has by its letter dated 21st August 2016 appointed Mr. Kher as an Arbitrator to adjudicate the Arbitration Case Nos. 1 of 2013 and 1 of 2014. His mandate stands terminated. 24. The arbitration clause does specify that the venue of the arbitration should be in Allahabad. It is plain that the Respondent themselves have no problem in arbitration taking place in Delhi. In fact Mr. Narsingh gave the new address of correspondence as the Delhi address and the Respondent has its office in Delhi and the witness examination has already concluded. For the mere completion of the arbitration from the stage where it was, the arbitration could well take place in Delhi particularly since there is no contrary intention appearing anywhere in the contract. The office of the Respondent is in fact located in Delhi. 25. For all the aforementioned reaso....