High Court of KeralaSingle Judge2021-11-26Arbitration Request allowed; Sole Arbitrator ap...

M/S Roopam Engineers & Contractors Pvt. Ltd. v. Bharat Sanchar Nigam Limited and Others

Case / Petition Number:AR No. 80 of 2021

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: Devan Ramachandran
Judgment Date: 2021-11-26
Court Decision / Holding: AR 80 of 2021 is allowed. The Court appoints Sri U. Sarathchandran as the sole Arbitrator, directs disclosure under Section 11(8) read with Section 12(1), directs the Registry to communicate the order within one week, and requires the Arbitrator to furnish a disclosure statement. The Fourth Schedule governs fees, costs are to be shared equally, and appearance before the Arbitrator is fixed for 02.01.2022; arbitration to proceed accordingly.
Final Disposition: Arbitration Request allowed; Sole Arbitrator appointed; Disclosure under Section 11(8) with Section 12(1) to be obtained; Fourth Schedule to govern fees; Costs to be shared equally; Appearance before the arbitrator on 02.01.2022; Registry to communicate the order to the arbitrator.

Parties to the Case

Appellants / Petitioners

M/S Roopam Engineers & Contractors Pvt. Ltd.

Respondents

The Chief Engineer Bharat Sanchar Nigam Limited, Office of the Chief General Manager (Telecom), PMG Junction, Trivandrum-695 033
The Superintending Engineer, Bharat Sanchar Nigam Limited, Office of the Chief General Manager (Telecom), PMG Junction, Trivandrum-695 033
The Executive Engineer, Bharat Sanchar Nigam Limited, Office of the General Manager, BSNL Bhavan, Pulimo od Junction, Kottayam-686 001

Legal Representation & Advocates

Counsels for Petitioners

• Dr. George Abraham
• Joby D Joseph

Counsels for Respondents

• Sri. Mathews K. Philip

Case Synopsis & Summary

This Arbitration Request under Section 11 of the Arbitration and Conciliation Act, 1996, filed by M/S Roopam Engineers & Contractors Pvt. Ltd. seeks the appointment of a sole arbitrator to adjudicate disputes arising from Annexure B-1, an agreement for the construction of Professors’ Quarters at Athirampuzha, Kottayam. The petitioner contends that disputes have arisen and, under Clause 25 of Annexure B-1, must be resolved by arbitration. It is undisputed that Perkins Eastman Architects DPC & another v. HSCC (India) Limited (AIR 2020 SC 59) requires that a party to an arbitration agreement cannot arbitrate or nominate an arbitrator, a principle this Court has reaffirmed in Tulsi Developers India Pvt. Ltd. v. Dr. Appu Benny Thomas (2021 (5) KHC 404). Respondents, while not opposing the arbitration itself, insist that they have already appointed an Arbitrator under Clause 25 who is currently serving as Chief Technical Inspector in the Government of Kerala, making the AR infructuous and urging that the said Arbitrator be allowed to complete proceedings. The Court holds that nominations by a party are impermissible, and thus Clause 25 cannot be used to nominate; it appoints Sri U. Sarathchandran as the sole Arbitrator, directs disclosure under Section 11(8) read with Section 12(1), fixes fees under the Fourth Schedule, and orders equal cost sharing. The registry is to communicate the order and fix a hearing on 02.01.2022.

Provisions of Law Cited

Section 11, Arbitration and Conciliation Act, 1996Section 11(8), Arbitration and Conciliation Act, 1996Section 12(1), Arbitration and Conciliation Act, 1996Fourth Schedule, Arbitration and Conciliation Act, 1996

Legal Doctrines & Maxims

No party to an arbitration agreement can arbitrate or nominate an arbitrator (Perkins Eastman Architects DPC & another v. HSCC (India) Limited, AIR 2020 SC 59)
If any nomination is made by a party to the arbitration agreement, it will be non-est and incompetent; the court must appoint a sole independent arbitrator (Tulsi Developers India Pvt. Ltd. v. Dr. Appu Benny Thomas, 2021 (5) KHC 404)

Submissions & Arguments

Contentions of Appellants / Petitioners

The applicant contends that arbitration is the agreed mechanism under Clause 25 of Annexure B-1, and that both Perkins Eastman and Tulsi Developers India Pvt. Ltd. establish that a party cannot nominate or arbitrate. Since respondents purportedly appointed an arbitrator who is already a government official, the nomination is invalid and the arbitration cannot be conducted under a party’s nomination. The court should appoint a sole independent arbitrator (the applicant suggested a retired judicial officer) to ensure independence and compliance with the Act. Following Perkins Eastman and Tulsi, the applicant seeks the court’s intervention to disregard the nomination by a party and to appoint a neutral arbitrator, with disclosure under Section 11(8) read with Section 12(1), and to proceed with arbitration; the proceedings should begin promptly with the stated schedule.

Contentions of Respondents

The respondents do not oppose arbitration but contend that Clause 25 authorizes them to appoint an Arbitrator. They argue that they have already appointed an Arbitrator who serves as Chief Technical Inspector, rendering the AR infructuous, and urge that this arbitrator be allowed to complete proceedings. They rely on the validity of the prior appointment and the arbitration clause, asserting that Perkins Eastman is not controlling in this context and that the process should continue with the existing appointment.

Cited Precedents (2)

Case Name	Citation	Treatment	Explanation
Perkins Eastman Architects DPC & another v. HSCC (India) Limited	AIR 2020 SC 59	Positive	The Supreme Court held that a party to an arbitration agreement cannot arbitrate or nominate an arbitrator, a principle relied upon to reject unilateral nominations in this case.
Tulsi Developers India Pvt.Ltd. v. Dr.Appu Benny Thomas	2021 (5) KHC 404	Positive	Kerala High Court followed Perkins Eastman and reaffirmed that nominating by a party is non-est and incompetent, necessitating appointment of a sole independent arbitrator.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN** **FRIDAY, THE 26[TH] DAY OF NOVEMBER 2021 / 5TH AGRAHAYANA, 1943** ## **AR NO. 80 OF 2021** ## **APPLICANT:** ## **M/S ROOPAM ENGINEERS & CONTRACTORS PVT.LTD.** **VIII/129,PAREKATTIL BUILDINGS, COCHIN BANK JUNCTION, NAD ROAD, ASOKAPURAM, ALUVA-683 101, REPERESENTED BY ITS MANAGING DIRECTOR V.S MYTHEEN** **BY ADVS. GEORGE ABRAHAM JOBY D JOSEPH** ## **RESPONDENTS:** - **1 THE CHIEF ENGINEER BHARAT SANCHAR NIGAM LIMITED, OFFICE OF THE CHIEF GENERAL MANAGER (TELECOM) ,PMG JUNCTION, TRIVANDRUM-695 033** - **2 THE SUPERINTENDING ENGINEER, BHARAT SANCHAR NIGAM LIMITED, OFFICE OF THE CHIEF GENERAL MANAGER (TELECOM) ,PMG JUNCTION, TRIVANDRUM-695 033** - **3 THE EXECUTIVE ENGINEER, BHARAT SANCHAR NIGAM LIMITED, OFFICE OF THE GENERAL MANAGER ,BSNL BHAVAN, PULIMOOD JUNCTION, KOTTAYAM-686 001** **THIS ARBITRATION REQUEST HAVING COME UP FOR ADMISSION ON 26.11.2021, THE** **COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **AR NO. 80 OF 2021** **2** ## **O R D E R** This Arbitration Request, filed invoking the provisions of Section 11 of the Arbitration and Conciliation Act (hereinafter referred to as 'the Act' for short), has been filed by the petitioner – which is stated to be a Private Limited Company incorporated under the provisions of the Companies Act, 1956, asserting that they have entered into Annexure B-1 agreement with the respondents for the purpose of construction of a “Professors' Quarters” at Athirampuzha, Kottayam. 2. The petitioner says that, even though they attempted to comply with the requirements under the agreement, they have been incapacitated from doing so for various reasons, which have now given rise to various disputes between the parties. They say that, going by Clause 25 of Annexure B-1 agreement, in the event of such disputes arising, it can be adjudicated and resolved only through the mechanism of Arbitration; **AR NO. 80 OF 2021** **3** for which purpose, they issued Annexure-F communication to the respondent on 13.08.2021. They say that, however, since the Arbitration Clause provides that the respondents will appoint an Arbitrator and since this is now impermissible on account of the judgment of the Hon'ble Supreme Court in **Perkins Eastman Architects DPC** **& another v. HSCC (India) Limited [AIR 2020 SC 59],** they have been constrained to approach this Court seeking that an independent sole Arbitrator be appointed. 3. I have heard Dr.George Abraham, learned counsel for the petitioner and Sri.Mathews K. Philip, learned Standing Counsel for the respondents. 4. Sri.Mathews K. Philip, did not oppose the contentions of the petitioner that the disputes in this case will have to be referred to Arbitration; but argued that, in terms of Clause 25 of Annexure B-1 agreement, his client has already appointed an Arbitrator, who is now working as a Chief Technical Inspector under the Government of Kerala. He submitted that, therefore, this Arbitration Request has now become infructuous and **AR NO. 80 OF 2021** **4** prayed that the said Arbitrator be allowed to complete proceedings in terms of law. 5. However, Dr.George Abraham, learned counsel for the petitioner, submitted that the appointment of the afore individual has not been yet notified to his client and that, in any event of the matter, it could not have been done by the respondents when this Arbitration Request was pending. He then reiteratingly contended that, going by **Perkins Eastman Architects DPC** ( _supra_ ), which has been followed by this Court in **Tulsi** **Developers India Pvt.Ltd. v. Dr.Appu Benny Thomas [2021** **(5) KHC 404]** , it was impossible for the respondents to have made an appointment as asserted by them and therefore, prayed that this Arbitration Request be allowed. 6. I have considered the afore submissions with great amount of care. 7. It is undisputed – it being admitted – that the Hon'ble Supreme Court in **Perkins Eastman Architects DPC** ( _supra_ ), has declared the law affirmatively that no **AR NO. 80 OF 2021** **5** party to an agreement can either arbitrate or nominate an Arbitrator. 8. In **Tulsi Developers India Pvt.Ltd.** ( _supra_ ), this Court has followed the said dictum and have reaffirmed that if any nomination is made by one of the parties to the Arbitration agreement, then the same will have to be construed as being non-est and incompetent and that this Court will be then enjoined to appoint a sole independent Arbitrator, on account of the rigour of Section 12(5) of the Act. 9. In the case at hand, the only controversy between the parties is as to whether the respondents can be allowed to nominate an Arbitrator in terms of Clause 25 of Annexure B-1 agreement. It is irrefutable, going by the declarations in the aforementioned precedents, that this is impossible and that this Court will have to disregard Clause 25 of Annexure B-1 agreement to the extent to which it allows one of the parties to the agreement to nominate an Arbitrator. 10. Presumably, knowing the mind of this Court as **AR NO. 80 OF 2021** **6** afore, Sri.Mathews K. Philip, submitted that if this Court is inclined to appoint an Arbitrator, acceding to the request of the applicant herein, then a retired Judicial Officer may be considered, taking note of the intricate nature of the disputes involved. 11. The afore submissions of Sri.Mathews K. Philip, was accepted by Dr.George Abraham also and I am, therefore, of the view that this Arbitration Request will require to be ordered as prayed for. 12. However, before I do so, I certainly must examine Annexure B-1 agreement to verify whether there is a binding Arbitration clause. It is indubitable therefrom that Clause 25 mandates that the parties must subject themselves to the process of Arbitration and this is also expressly admitted to by them. In the afore circumstances, this Arbitration Request is allowed in the following manner: (a) I nominate Sri.U.Sarathchandran, 'Dilkush', A.K.G. Vayanasala Road, Thammanam PO, Kochi – 682 032', as the sole Arbitrator, to adjudicate and resolve the **AR NO. 80 OF 2021** **7** disputes and differences between the parties to this case arising from Annexure B-1 agreement. - (b) The Registry is directed to communicate a copy of this order to the learned Arbitrator within a period of one week from today and to obtain a Statement of Disclosure from him under Section 11(8) read with Section 12(1) of the Arbitration and Conciliation Act, 1996. - (c) Once the Disclosure Statement is obtained from the learned Arbitrator, the Registry shall release the certified copy of this order, with a copy of the said statement appended to it, retaining the original of the same on the files of this case. - (d) The fees of the Arbitrator shall be governed by the Fourth Schedule of the Arbitration and Conciliation Act, 1996. (e) The parties to this case are _ad idem_ that they will share the arbitration costs and fees equally and it is so recorded. **AR NO. 80 OF 2021** **8** (f) In order to enable the Arbitrator to commence the proceedings without delay, I direct the parties to mark appearance before him at 11.00 am on 02.01.2022. **==> picture [56 x 11] intentionally omitted <==** ## **DEVAN RAMACHANDRAN** **JUDGE** rp **AR NO. 80 OF 2021** **9** ## **APPENDIX OF AR 80/2021** ## **PETITIONER ANNEXURE** |**Annexure A**|**TRUE COPY OF THE JUDGMENT IN WPC NO.10001/2019 DATED**| |---|---| ||**6.8.2019**| |**Annexure B**|**TRUE COPY OF THE ORDER PASSED BY THE EXECUTIVE**| ||**ENGINEER DATED 7.9.2019**| |**Annexure B1**|**TRUE COPY OF THE AGREEMENT**| |**Annexure C**|**TRUE COPY OF THE LETTER DATED 09.6.2021 SENT BY THE**| ||**APPLICANT TO THE EXECUTIVE ENGINEER**| |**Annexure D**|**TRUE COPY OF THE COMMUNICATION SENT BY THE EXECUTIVE**| ||**ENGINEER DATED 15.6.2021**| |**Annexure E**|**TRUE COPY OF THE COMMUNICATION THE PETITION HAD WITH**| ||**THE EXECUTIVE ENGINEER, DATED 4.8.2021**| |**Annexure F**|**TRUE COPY OF THE COMMUNICATION ISSUED TO THE CHIEF**| ||**ENGINEER DATED 13.8.2021**|