Case Note & Summary
The appeals arose from judgments of the High Court of Delhi, which appointed independent arbitrators for disputes between the Union of India and two construction companies, contrary to the General Conditions of Contract (GCC) that mandated Railway officers as arbitrators. In the first case, the respondent alleged unpaid dues despite signing a final bill and supplementary agreement, claiming duress. The High Court ruled that the Railway's failure to appoint an arbitrator after the arbitration clause was invoked forfeited its right to do so. In the second case, the respondent similarly sought arbitration after claiming unpaid amounts, but the Railway contended that the claims were 'excepted matters' and thus not arbitrable. The High Court appointed an independent arbitrator, asserting that the disputes could be examined by the arbitrator. The Union of India argued that the High Court's actions were erroneous as the arbitration request was made before the Amendment Act, 2015, and the proceedings should follow the unamended Act. The court noted that the request for arbitration was made prior to the amendment and thus should be governed by the original provisions of the Act. The court emphasized that the appointment of arbitrators must adhere to the contract terms, referencing previous judgments that supported this principle. Ultimately, the Supreme Court set aside the High Court's judgments, directing the Union of India to appoint an arbitrator as per the GCC within one month, and established a timeline for the arbitration process to ensure expediency.
Headnote
A) Arbitration Law - Appointment of Arbitrator - High Court's Authority - Arbitration and Conciliation Act, 1996, Section 11 - The High Court appointed an independent arbitrator despite the contract stipulating appointment of Railway officers, which was deemed improper as the appointment should follow the contract terms. Held that the High Court's decision was not justified and the appointment should be made as per the contract (Paras 15-16).
Issue of Consideration
Whether the High Court erred in appointing an independent arbitrator instead of directing the appointment of an arbitrator as per the General Conditions of Contract.
Final Decision
The Supreme Court set aside the High Court's judgments and directed the Union of India to appoint an arbitrator in accordance with Clause 64(3) of the agreement within one month, with a structured timeline for the arbitration process.
Law Points
- Arbitration
- appointment of arbitrator
- General Conditions of Contract
- Section 11 Arbitration and Conciliation Act
- 1996
- excepted matters
