Dismissed

Shri Sanwaliya Ji Mandir Mandal, v. M/S. M.S.K. Projects India Ltd. and Ors.

Rajasthan HC3 Apr 2008CW/3923/2007

Case brief

AI extract

What is this about?

The High Court dismissed a writ petition challenging an interlocutory order of an Arbitral Tribunal regarding arbitrator appointment, holding it not maintainable as interlocutory orders cannot be challenged in writ jurisdiction under SBP & Co. precedent, with liberty to challenge the final award or government action via separate suit.

What did the court decide?

Liberty granted to file a separate writ petition regarding any action of the Government not related to arbitration.

Shri Sanwaliya Ji Mandir Mandal, Vs M/S. M.S.K. Projects India… — Arbitration | Rajasthan HC (2008)

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S.B. CIVIL WRIT PETITION NO.3923/2007

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Shri Sanwaliyaji Mandir Mandal, Chittorgarh Vs. M/s. M.S.K. Projects & Ors.

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DATE OF ORDER :: 03-04-2008

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HON'BLE MR. MUNISHWAR NATH BHANDARI,J.

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Mr. T. Gupta, for the petitioner. Mr. B.S. Charan, for the respondents.

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This writ petition is directed against order passed by the Arbitral Tribunal dated 15.12.2006 and also the appointment of the Arbitrator by the Arbitration Council and all proceedings taken in this regard.

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Learned counsel for the petitioner submits that petitioner had agreed to pay a sum for construction of Hospital and the said amount was nothing but a donation. Initially work was started with the help of Housing Board but when the construction could not be completed, with the intervention of the Government, Chief Executive Officer was nominated to look after the aforesaid work and thereupon the work was assigned to others. Later on, a dispute arose between the parties in regard to various issues including non payment of balance amount by the State Government for completion of Hospital work. A civil suit in that regard was filed by the petitioner but the same was dismissed on the ground

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that there exist a provision for arbitration between the parties. The petitioner thereupon preferred a revision petition before the High Court challenging the order passed by the civil court. However, said revision petition was dismissed as it was barred by limitation.

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Learned counsel for the petitioner referring to clause of the arbitration agreement reproduced at page 5 and 6 of the writ petition submits that the matter was liable to be referred to the Arbitrator only when it is having a claim of less than Rs.50,000/-. However, amount involved in the present matter being more of Rs.50,000/-, not only appointment of Arbitral Tribunal goes contrary to the agreement but so far as the Arbitration Council is concerned, they were having no authority to appoint Arbitrators. An objection taken in that regard was wrongly decided by the Arbitral Tribunal vide the impugned order dated 15.12.2006. Precisely for that reason and due to noncooperation of the Government, this writ petition has been submitted.

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Learned counsel for the respondent on the other hand submits that the matter has rightly been referred to the Tribunal and looking to the fact that only interim order has been passed by the Tribunal on 15.12.2006, therefore this Court should not interfere in the aforesaid order as the petitioner would

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otherwise be liberty to challenge the final award which includes the order impugned herein. It is contended that in view of the judgment of Hon'ble Apex Court in the case of SBP & Co. Vs. Patel Engineering Co. Ltd. & Anr. Reported in (2005) 8 SCC 618, the Hon'ble Apex Court already held that the High Court should not interfere in the interlocutory orders passed by the Arbitration Tribunal. In view of the above, learned counsel for the respondents submits that the order under challenge needs not be entertained.

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I have considered the rival submissions of the parties and perused the record.

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It is a fact that mainly the order of the Tribunal has been challenged herein regarding appointment of the Arbitration Tribunal, though it being an interlocutory order, not available for challenge in a writ jurisdiction in view of the judgment of the Hon'ble Apex Court in the case referred above. However, the petitioner would be at liberty to challenge the aforesaid order, if at all award is passed against him or if any grievance remains in regard to the order impugned herein. Thus, the writ petition to challenge the interlocutory order passed by the Arbitral Tribunal cannot be maintained.

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So far as fact regarding appointment of

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Arbitrator by the Arbitration Council is concerned, referring to Para 26 of agreement, it comes out that as per agreement, Arbitrators were to be appointed by the Indian Arbitration Council itself. Thus, prima facie it cannot be said that appointment of Arbitrator by the Council is contrary to the agreement. However, even if the petitioner has an objection, he would be at liberty to raise it if award is passed against him and the Arbitral Tribunal would otherwise be under an obligation to decide the matter strictly as per the terms and conditions of the arbitration agreement and if the liability of the petitioner is limited in view of the arrangement between all the parties then that would also be considered by the Arbitral Tribunal.

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In view of the above, so far as present writ petition is concerned, the same cannot be maintained for the reason that the liberty remains with the petitioner to challenge the orders as otherwise challenged herein and even to raise objection regarding appointment of the Arbitrator on passing of the final award. Any observation made in this judgment however would not be construed to govern or guide the Arbitral Tribunal and would not otherwise come in the way of the petitioner for necessary challenge as indicated above. Learned counsel for the petitioner however submits that he may be given liberty to file a separate writ petition so far as the controversy raised between the petitioner and the State Government

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is concerned. The liberty as prayed for is granted. The petitioner can maintain a separate writ petition regarding any action of the Government which is being challenged or which is to be challenged.

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With the aforesaid, the writ petition is dismissed as not maintainable with liberty aforesaid.

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[Munishwar Nath Bhandari],J.

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Praveen

Shri Sanwaliya Ji Mandir Mandal, v. M/S. M.S.K. Projects India Ltd. and Ors.

Case brief

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Shri Sanwaliya Ji Mandir Mandal, v. M/S. M.S.K. Projects India Ltd. and Ors.

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