Case Note & Summary
The dispute arose between the State of Rajasthan and M/s. Chiesel & Hammer Const. Company regarding the construction of the Ghar Ganga Aquaduct under the Chhapi Project. The respondent submitted a tender which was accepted, but the work progressed slowly, leading the State to issue several notices to the contractor. Allegedly, the contractor abandoned the work in 2001 and subsequently filed a writ petition for the appointment of an arbitrator. The High Court dismissed the writ petition, stating it could not appoint an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, but allowed the contractor to seek redress through the Standing Committee or the Chief Justice. The contractor then filed applications under Sections 9 and 11(6) of the Act, which led to the appointment of an arbitrator by the High Court. The State challenged this appointment, arguing that the dispute should have been resolved by the Empowered Standing Committee as per Clause 23 of the Agreement. The Supreme Court found merit in the State's argument, stating that the High Court erred in appointing an arbitrator without considering the provisions of the Agreement. The Court set aside the High Court's order and referred the matter to the Empowered Standing Committee, directing it to resolve the dispute within six months. The appeals were allowed, and no costs were imposed.
Headnote
A) Arbitration - Appointment of Arbitrator - High Court's Authority - Arbitration and Conciliation Act, 1996, Section 11(6) - The High Court dismissed the writ petition for appointment of an arbitrator, stating it lacked power under Section 11(6) of the Act, but allowed the petitioner to approach the Standing Committee or the Chief Justice for arbitration. Held that the High Court's appointment of an arbitrator was erroneous as the dispute should have been referred to the Empowered Standing Committee under Clause 23 of the Agreement (Paras 1-4).
Issue of Consideration
Whether the High Court erred in appointing an arbitrator when the dispute could have been resolved by the Empowered Standing Committee as per the Agreement.
Final Decision
The Supreme Court set aside the High Court's order appointing an arbitrator and referred the matter to the Empowered Standing Committee, directing it to resolve the dispute within six months.
Law Points
- Arbitration
- Appointment of Arbitrator
- Empowered Standing Committee
- Dispute Resolution
- Clause Interpretation
