The Union of India and 2 Ors. Vs M/S G D Engineering Construction

This review petition is directed seeking a review of the order dated 21.12.2022 passed in I.A(Civil) No. 3374 of 2022 in Arbitration petition No 4/2014 whereby, this court had appointed Ms. Momita Borah, Advocate-cum-life Individual Member of Indian Council of Arbitration as an arbitrator to resolve the disputes between the parties subject to her consent and absence of any impediment as mentioned under section 12 of the Arbitration and Constitution Act 1996.

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Pursuant to the appointment of the arbitrator, the parties appeared before the learned Arbitrator and the claims and the written statements were furnished.

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The counsel for the review petitioner who was appearing for the opposite party respondents in his capacity as a CGC submits that although in the order against which the review is sought for, had recorded that the counsel for the review petitioner had no objection if a new arbitrator is appointed, however, the consent is only with regard to appointment of a fresh arbitrator, but was not in respect of appointment of Ms. Momita Borah, Advocate as the arbitrator. It is submitted that the review petitioners have strong objection to Ms. Momita Borah, Advocate being appointed as an arbitrator. Grounds of which have already been raised by way of communication No. 83199/ARB/TEZ/11/0809/06/E8 dated 27.01.2023. In response to this communication, the arbitrator appointed, furnished her reply on 30.01.2023.

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The learned counsel for the review petitioner therefore submits that

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besides the arbitrator appointed not furnishing the written declaration as is required under section 12(1), the arbitrator is not competent to act as an arbitrator in view of condition 70 of the General clauses of contract governing the subject contract. The said objection challenging the appointment of the arbitrator was also raised under section 13(2). It is the submission of the counsel for the review petitioner that the objections were rejected by the communication without specific references to the objections raised. Till date, the disclosure as required under section 12(1) of the Arbitration and Conciliation Act has never been furnished. In support of his contention, the learned counsel for the review petitioner refers to and relies upon the judgment of Apex Court rendered in Municipal Corpn. of Greater Mumbai v. Pratibha Industries Ltd reported in ( 2019) 3 SCC 203and also Himalayan Coop. Group Housing Society v. Balwan Singh reported in (2015) 7 SCC 373. Referring to the judgments, the learned counsel for the review petitioner submits that mere knowledge of an order of the court will not reflect a consent given by the party. That apart any concession by the counsel contrary to the instructions or in the absence of specific instructions thereto will also not bind the parties concerned. It is therefore submitted that the order dated 21.12.2022 under review, although it reflects that the counsel appearing for the review petitioner does not object to the appointment of a fresh arbitrator, the same being without specific instructions from the review petitioners will not amount to consent of the review petitioners and therefore any concession given by the counsel without specific instructions thereto are not binding on the respondents and therefore the impugned order is required to be reviewed and the appointment of Ms Momita Borah as the fresh arbitrator is required to be reviewed and some other arbitrator is to be appointed in her place.

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Per contra, Mr. Dhiman, appearing as a respondent in person, strongly objects to the submissions made by the review petitioner. It is submitted that in so far as the disclosure under section 12(1) is concerned, the same is not required in the facts of the present case as the said amendment was brought with effect from 23.10.2015. Referring to section 21, the respondent in person submits that arbitral proceedings will commence from the date the request for the dispute to be referred to arbitration is received by the respondent. This request was furnished well prior to 2015 and therefore the amendment being post initiation of the arbitration proceedings are not applicable in the facts of the present case.

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He further submits that the objections raised by the petitioners were overruled by the arbitrator by the communication dated 30.01.2023 and therefore if any further grievances are raised by the petitioners, the same can only be taken recourse to by filing an appeal after the award is declared by the arbitrator appointed. He submits that there is no merit in the review petition and the same should therefore be dismissed.

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The learned counsel for the review petitioner as well as the respondent in person have been heard.

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The objections raised by the review petitioner are in respect of the particular arbitrator appointed by the Court vide order dated 21.12.2022. As per Section 13(2) of the Arbitration and Conciliation Act, the challenge to the appointment of an arbitrator may be made as per the procedure prescribed under Section 13 of the Act. That apart under Section 16 of the Act, that the question of jurisdiction of an arbitral tribunal, although is not permitted to be raised later than the submissions of the Statement of Defence, however, such party shall not be precluded from raising such a plea merely because he has

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appointed or participated in the appointment of an arbitrator. Going through the objections raised by the review petitioner before the arbitral tribunal, it is seen that there are specific grounds raised by the arbitral tribunal. The relevant portions of the objections raised are extracted below:

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“......

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In absence of the disclosure from your side, UOI is not aware about any ongoing arbitration in hour hand, which is required to be given in the disclosure as per form specified in Sixth Schedule of the Act. UOI therefore submits this plea under Section 13(2) of the Arbitration and Conciliation Act, 1996 challenging your appointment as arbitrator.

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In addition to above, it is also submitted that you were the sole Arbitrator in Smt Krishna Devi @ Sabitri Devi (Rani) Vs. Union of India Case No. T.S (ARB) No.19/2003: CA No. CWE/TEZ/08 of 1987-88: Provn of Permanent Armament Section Under GE(AF) Tezpur (M/S S R Engineering Construction) with the same petitioner against UOI and you have passed an exorbitantly high award against UOI which is under challenge with Hon’ble District Court, Sonitpur.

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UOI therefore requests your goodself to withdraw from your appointment under Section 11(1) of the Arbitration and Conciliation Act, 1996. ........”

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These objections, however, were overruled by the tribunal by the communication dated 30.01.2023. A perusal of the communication issued by the arbitrator reveals that the objections raised were not addressed to specifically. Under such circumstances, it is apparent that where the objections with regard to appointment of an arbitrator is raised before the tribunal itself, the objections raised must be dealt with by the tribunal specifically and appropriate orders be passed thereon.

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Considering the issues involved and the submissions made before the Court, as also the judgments referred to, this Court is of the view that the review petition can be disposed of at this stage by directing the parties to appear before the arbitrator. The arbitrator will re-decide the issue by passing a fresh order on the objections raised by the review petitioner. The arbitrator upon

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hearing the parties will pass appropriate orders on the objections raised by the review petitioner read with the provisions with Act of 1996 and the Rules reamed thereunder before proceeding any further in the Arbitration proceeding. With the above observations, the review petition stands disposed of. Parties will appear before the Arbitrator on 25.11.2025. Interim orders, if any, stands vacated.

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JUDGE

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Comparing Assistant

The Union of India and 2 Ors. v. M/S G D Engineering Construction

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The Union of India and 2 Ors. v. M/S G D Engineering Construction

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