J M Swamy Vs Government of India

GOVERNMENT OF INDIA CENTRAL PUBLIC WORK DEPARTMENT REP BY ITS THE EXECUTIVE ENGINEER BCD-11, CPWD, 12^TH FLOOR, SIR M V KENDRIYA BHAVAN, BENGALURU - 560071.

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THE CHIEF ENGINEER SZ-111, CPWD, KENDRIYA SADAN, KORAMANGALA BENGALURU - 560034.

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…RESPONDENTS

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(BY SRI. M.N. KUMAR, ADVOCATE )

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THIS CMP IS FILED UNDER SECTION 11 SUB SECTION (6) AND (8) READ WITH SECTIONS 12, 14 & 15 (b) OF THE ARBITRATION AND CONCILIATION ACT, 1996 READ WITH THE

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NC: 2025:KHC:34388 CMP No. 8 of 2025

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HC-KAR

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RULES FRAMED BY THE HON'BLE HIGH COURT OF KARNATAKA IN NOTIFICATION NO.LCA/1/402/1996 DATED 13.11.1996 PRAYING TO PASS AN APPROPRIATE ORDER BY TERMINATING THE EXISTING ABRITRAL TRIBUNAL FOR APPOINTMENT OF INDEPANDENT AND IMPARTIAL SOLE ARBITRATOR IN THE PLACE OF 3^RD RESPONDENT AS PER THE PETITIONER REQUESTS UNDER THE PROVISIONS OF SECTION 11(6) SUBSECTION (a) AND (c) OF THE ARBITRARION AND CONCILIATION ACT, 1996 AMENDED ACT. 2015 (3 OF 2016) TO ADJUDICATE THE DISPUTERS / CLAIMS BETWEEN THE PARTIES FOR THE WORK OF EXTENSION OF 1^ST FLOOR OFFICE SPACE FOR NIRM AT GSI CAMPUS, BANGALORE AGREEMENT NO.40/EE/BCD-II 2019-2020 (ANNXURE A); AND ETC.

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THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE E.S.INDIRESH

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ORAL ORDER

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In this petition, the petitioner has sought for appointment of an Arbitrator to adjudicate the disputes that have arisen between the parties in relation to the Extension of 1^st Floor Office Space for NIRM at GSI Campus, Bangalore-Agreement No.40/EE/BCD-II/20192020" in accordance with the provisions of the

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NC: 2025:KHC:34388 CMP No. 8 of 2025

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HC-KAR

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Arbitration and Conciliation Act, 1996 (hereinafter

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referred to as the ‘Act’).

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Heard the learned counsel appearing for the

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parties.

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It is contended by Sri. Harishchandra Reddy, learned counsel appearing for the petitioner that, as there is dispute between the parties, the Arbitrator has to be appointed as per Clause 25 of the Agreement produced at Annexure- A to the petition.

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Per contra, Sri.M.N. Kumar, learned CGC appearing for the respondent Nos.1 and 2, opposed appointment of the Arbitrator by referring to the Clause 25 (i) and (ii) and submitted that in terms of the contract referred to above, no person, other than a person appointed by such Chief Engineer CPWD or Additional Director General or Special Director General or Director General, CPWED, as aforesaid, shoul act as arbitrator and if for any reason that it is not possible,

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HC-KAR

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the matter shall not be referred to the arbitration at all. Accordingly, sought for dismissal of the petition.

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This submission opposed by the learned counsel appearing for the petitioner and places reliance on the judgment of the Hon'ble Supreme Court in the case of Central Organisation for Railway Electrification vs. ECI SPIC SMO MCML (JV) A Joint

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Venture Company reported in 2024 INSC 857 and argued that, since the arbitration agreement provides for appointment of such persons as per the wish of the respondents and therefore, such award shall not be fair adjudication.

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Having taken note of submission learned counsel appearing for the parties, Clause 25 of the Agreement at Annexure-A provides for resolution of the dispute between the parties, though the above said Clause provides for appointment persons of choice of the respondent, however, as the petitioner herein disputes

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HC-KAR

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with regard to the same, I am of the view that, it is relevant to cite the judgment of the Hon'ble Supreme Court in the case of Central Organization for Railway Electrification vs. ECI SPIC SMO MCML (JV) A Joint Venture Company and paragraph 169 reads as under:

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"169. In view of the above discussion, we conclude that:

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a. The principle of equal treatment of parties applies at all stages of arbitration proceedings, including the stage of appointment of arbitrators;

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b. The Arbitration Act doe not prohibit PSUs from empanelling potential arbitrators. However, an arbitration Clause cannot mandate the other party to select its arbitrator from the panel curated by PSUs;

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c. A Clause that allows one party to unilaterally appoint a sole arbitrator gives rise to justifiable doubts as to the independence and impartiality of the arbitrator. Further, such a unilateral Clause is exclusive and hinders equal participation of the other party in the appointment process of arbitrators;

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d. In the appointment of a three-member panel, mandating the other party to select its arbitrator from a curated panel of potential arbitrators is against the principle of equal treatment of parties. In this situation, there is no effective counterbalance because parties do not participate equally in the process of appointing arbitrators. The process of appointing arbitrators in CORE (supra) is unequal and prejudiced in favour of the Railways;

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e. Unilateral appointment clauses in public-private contract are violative of Article 14 of the Constitution;

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HC-KAR

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f. The principle of express waiver contained under the proviso to Section 12 (5) also applies to situations where the parties seek to waive the allegation of bias against an arbitrator appointed unilaterally by one of the parties. After the disputes have arisen, the parties can determine whether there is a necessity to waive the nemo judex rule; and

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g. The law laid down in the present reference will apply prospectively to arbitrator appointments to be made after the date of this judgment. This direction applies to threemember tribunals."

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Following the declaration of law made the

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Hon'ble Supreme Court, I am of the view that, an independent Arbitrator is required to be appointed for dispute resolution between the parties. Accordingly, this petition under Section 11 (6) of the Act, 1996 is allowed . Sri. SBN Prakash, learned District Judge, is appointed to enter into the said reference of Arbitration and act as the Sole Arbitrator in the present case in the Arbitration and Conciliation Centre (Domestic & International), Bengaluru, as per the Rules governing the said Arbitration Centre.

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HC-KAR

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All claims and contentions of any of the

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parties are left/kept open to be decided by the Arbitral Tribunal.

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A copy of this order be sent forthwith to the Arbitration and Conciliation Centre (Domestic & International), Khanija Bhavan, Bengaluru, for proceeding further in the matter.

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Registry is directed to return all original documents produced by any of the parties after obtaining Photostat copies of the same.

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Since the parties are represented through their learned counsel and in order to avoid further delay in the matter, the parties are directed to appear before the Arbitration and Conciliation Centre on 26.09.2025 at 11 am, without waiting for further notice in this regard.

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SD/(E.S.INDIRESH) JUDGE

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SB:List No.: 1 Sl No.: 17

J M Swamy v. Government of India

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J M Swamy v. Government of India

Case brief

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