Case Note & Summary
The applicant, S. N. Naik & Brothers, a proprietary concern, entered into a contract with the Union of India (respondent) on 23.09.2019 for construction of limited height subways in lieu of manned level crossings. Disputes arose regarding the work, and the applicant invoked the arbitration clause (Clause 64(3)(b)(ii) of the Indian Railways Standard General Conditions of Contract) by issuing a notice on 27.12.2022. The clause required a 30-day notice period before arbitration could be initiated. The applicant filed the present application under Section 11(6) of the Arbitration and Conciliation Act, 1996 on 20.02.2023, before the expiry of 30 days from the notice. The respondent opposed the application, contending that the application was premature as the notice period had not expired. The court examined the facts and found that the respondent did not respond to the notice and only raised the objection in its reply. The court held that the respondent's conduct amounted to waiver of the notice period requirement. The court also noted that the respondent failed to appoint an arbitrator as per the contract. Accordingly, the court allowed the application and appointed a sole arbitrator to adjudicate the disputes between the parties.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Section 11(6) of the Arbitration and Conciliation Act, 1996 - Pre-arbitration Notice Period - The applicant sought appointment of an arbitrator for disputes arising from a railway contract. The arbitration clause required a 30-day notice before invoking arbitration. The applicant issued a notice on 27.12.2022 and filed the application on 20.02.2023, before the expiry of 30 days. The court held that the respondent, by not responding to the notice and by raising objections only in the reply, waived the notice period requirement. The court appointed a sole arbitrator to adjudicate the disputes. (Paras 1-10) B) Contract Law - Railway Contract - Indian Railways Standard General Conditions of Contract - Clause 64(3)(b)(ii) - The arbitration clause in the contract provided for appointment of an arbitrator by the General Manager. The court noted that the respondent failed to appoint an arbitrator despite the applicant's notice, and thus the court exercised its power under Section 11(6) to appoint an arbitrator. (Paras 2-10)
Issue of Consideration
Whether the court can appoint an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, when the applicant failed to comply with the pre-arbitration notice period of 30 days as per the arbitration clause, and whether the respondent's conduct amounts to waiver of such notice requirement.
Final Decision
The court allowed the arbitration application and appointed a sole arbitrator to adjudicate the disputes between the parties.
Law Points
- Section 11(6) of the Arbitration and Conciliation Act
- 1996
- Appointment of Arbitrator
- Pre-arbitration procedure
- Waiver of notice period
- Indian Railways Standard General Conditions of Contract
- Clause 64(3)(b)(ii)
