M/S VA Tech Wabag Ltd. v. Travancore Titanium Products Ltd.

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT** **THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN** **TUESDAY, THE 16[TH] DAY OF NOVEMBER 2021 / 25TH KARTHIKA, 1943** ## **AR NO. 84 OF 2020** **APPLICANT:** **M/S.VA TECH WABAG LTD. THROUGH MR.S.VARADARAJAN, DIRECTOR AND CHIEF GROWTH OFFICER, WABAG HOUSE, NO.17, 200 FEET ROAD RADIAL ROAD, S.KOLATHUR, CHENNAI-600 117, REPRESENTED BY POWER OF ATTORNEY HOLDER MR.BASKAR S., SENIOR ENGINEER SITE (ELECTRICAL)** **BY ADVS. P.SREEKUMAR SHRI.S.GANESH** ## **RESPONDENT:** **M/S.TRAVANCORE TITANIUM PRODUCTS LTD. TROUGH ITS MANAGING DIRECTOR, POST BOX NO.1, KOCHUVELI, THIRUVANANTHAPURAM-695 021.** **BY ADVS. SMT.LATHA ANAND SRI.S.VISHNU (ARIKKATTIL)** **THIS ARBITRATION REQUEST HAVING COME UP FOR ADMISSION ON 16.11.2021,** **THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **AR NO. 84 OF 2020** **2** ## **O R D E R** The petitioner has approached this Court invoking Section 11 of the Arbitration and Conciliation Act (hereinafter referred to as 'the Act' for short), assailing the nomination of a sole Arbitrator by the respondent to adjudicate and resolve the disputes arisen between the parties, relating to and touching upon Annexure-A1 agreement between them, asserting that such nomination is impermissible, going by the provisions of Section 12(5) of the Act. 2. The petitioner, however, concedes that when certain other disputes earlier arose between the parties touching upon the same agreement, they agreed to its adjudication by a learned Arbitrator appointed by the respondent and that Annexure-A3 Award was issued by the said Authority. They say that this Award is now under challenge before the competent Court, under Section 34 of the Act; but that even while so, when additional disputes arose, which were not part of Annexure-A3 Award, the respondent again nominated the same Arbitrator who issued Annexure-A3 Award and that this causes prejudice to them, not merely in law but also on facts. **AR NO. 84 OF 2020** **3** 3. Sri.P.Sreekumar, learned counsel appearing for the petitioner, explained his client's case arguing that, after the Hon'ble Supreme Court delivered the judgment in **TRF Limited v. Energo Engineering Projects Limited [(2019) 8 SCC 377],** which has been followed by this Court in **Tulsi Developers India Pvt.Ltd. v. Dr.Appu Benny Thomas [2021 (5) KHC 404],** it is rendered beyond contest that a party to an agreement cannot arbitrate or nominate an Arbitrator. He submitted that it is in flagrant violation of this declaration of law, that the respondent has now nominated a sole Arbitrator, and therefore, that it cannot find favour in law by any yardstick. He then contended that, since Annexure-A3 Award, issued by the learned Arbitrator earlier appointed, is under challenge before the competent Court, it would be a desideratum that a new independent Arbitrator be nominated to resolve the present disputes between the parties, since the concepts of unconscious bias and prejudice may otherwise be impelled against the Arbitrator. 4. Sri.P.Sreekumar, then proceeded to say that, therefore, when Annexure- A5 notice was issued to his client by the respondent nominating the same Arbitrator, who had issued **AR NO. 84 OF 2020** **4** Annexure-A3 Award earlier, they opposed it and requested them to submit the disputes to a sole independent Arbitrator; but that since this has not been acceded to and since the learned Arbitrator is now proceeding with the processes, they have been constrained to approach this Court through this Arbitration Request. 5. The afore submissions of Sri.P.Sreekumar, were answered by Sri.K.Anand, learned Senior Counsel, instructed by Smt.Latha Anand, learned counsel for the respondent, showing me Annexure-A6 consent given by the petitioner to the appointment of an Arbitrator by the respondent, with respect to the earlier disputes, which finally led to Annexure-A3 Award. He submitted that, therefore, when the petitioner had acceded to the appointment of the Arbitrator earlier by the respondent, he cannot now reprobate and then seek that a new Arbitrator be appointed, particularly when the disputes now arisen are nothing but an offshoot of the earlier ones, which are all, in any case, touching upon and relating to Annexure-A1 agreement. He concluded his submissions by saying that, in any event of the matter, since the person appointed as an Arbitrator by the respondent is a retired Judge of this Court, whose integrity and capacity remains **AR NO. 84 OF 2020** **5** unimpeached even by the petitioner, no prejudice will be caused to them in allowing the proceedings now initiated to go forward. He, therefore, prayed that this Arbitration Request be dismissed. 6. I must say upfront that the afore dialectical positions now adopted by the parties have no reflection upon the learned Arbitrator who had settled Annexure-A3 Award because, his integrity or competence is not in question in this Arbitration Request and this is affirmed by Sri.P.Sreekumar. 7. However, the submission of the petitioner is that nomination of an Arbitrator by the respondent is vitiated both on law and on facts because, after Section 12(5) was brought into the Act, no party can appoint an Arbitrator unilaterally and such a nomination will have to fail at the touchstone of the declarations made by the Hon'ble Supreme Court and this Court, in the aforementioned precedents. 8. As far as the learned Arbitrator who issued Annexure-A3 Award is concerned, though, as seen above, Sri.P.Sreekumar does not call into question his integrity or competence, he makes a rather veiled submission that it will be desirable that another Arbitrator is thought of by this Court because Annexure-A3 is now **AR NO. 84 OF 2020** **6** pending challenge before the competent Civil Court. His argument, made in a rather whispered tone, is that the learned Arbitrator may wittingly or unwittingly develop bias or prejudice because his earlier Annexure-A3 Award is now under challenge. 9. I must say that I find substantial force in both the afore submissions of Sri.P.Sreekumar, because it cannot be now doubted or contested that after the Act was amended in the year 2016, by incorporating Section 12(5) into it, a nomination by either of the parties to an agreement is impermissible. 10. In addition, the fact that Annexure-A3 Award is pending challenge before the competent Civil Court at the hands of the petitioner would also persuade me to consider the appointment of an another Arbitrator. 11. I, therefore, asked Sri.K.Anand, learned Senior Counsel, whether his client would stand in the way of this Court appointing an independent Arbitrator, to which, he submitted that if this Court is so inclined, then he leaves it to me to appoint a suitable Arbitrator; but prayed that it may be also a person of equal or greater eminence as the one who issued Annexure-A3 Award. 12. Before I tread forward, I must certainly examine **AR NO. 84 OF 2020** **7** Annexure-A1 agreement and verify if there is an Arbitration clause binding the parties. 13. I notice from the Agreement that Article 11 thereof, binds the parties to subject themselves to Arbitration in the event of any disputes arising between them, touching upon its terms or relating to it. In the afore circumstances, I allow this Arbitration Request and terminate the mandate of the learned Arbitrator appointed by the respondent; consequentially, making the following directions: (a) I nominate Justice P.R.Ramachandra Menon, Former Chief Justice, 8A, Asset East Thottekkatt, TD Road, Opp. Maharaja's College, Ernakulam - 682 011, as the sole Arbitrator, to adjudicate and resolve the disputes and differences between the parties to this case arising from Annexure A1 agreement. (b) The Registry is directed to communicate a copy of this order to the learned Arbitrator within a period of two weeks 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. **AR NO. 84 OF 2020** **8** (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. (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 20.12.2021. **SD/-** **DEVAN RAMACHANDRAN JUDGE** **rp** **AR NO. 84 OF 2020** **9** ## **APPENDIX OF AR 84/2020** ## **PETITIONER ANNEXURE** |**ANNEXURE A1**|**TRUE COPY OF THE AGREEMENT EXECUTED ON 25/04/2006.**| |---|---| |**ANNEXURE A2**|**TRUE COPY OF SCHEDULE-6 APPLICABLE IN THE PRESENT**| ||**DISPUTE.**| |**ANNEXURE A3**|**TRUE COPY OF THE AWARD DATED 04/12/2019 IN THE**| ||**ARBITRATION BETWEEN THE RESPONDENT AND THE**| ||**APPLICANT.**| |**ANNEXURE A4**|**TRUE COPY OF THE LETTER DATED 29/11/2019 OF THE**| ||**RESPONDENT.**| |**ANNEXURE A5**|**TRUE COPY OF THE NOTICE DATED 04/07/2020 ISSUED BY**| ||**THE RESPONDENT INVOKING ARBITRATION.**| |**ANNEXURE A6**|**TRUE COPY OF THE REPLY SENT ON 10/07/2020 BY THE**| ||**APPLICANT TO THE RESPONDENT.**| |**ANNEXURE A7**|**TRUE COPY OF THE NOTICE DATED 04/08/2020 ISSUED BY**| ||**THE SOLE ARBITRATOR.**| |**ANNEXURE A8**|**TRUE COPY OF THE JUDGEMENT IN WP(C)NO.17537/2020**| ||**DATED 29/09/2020.**| ## **RESPONDENT' ANNEXURES:** |**ANNEXURE R1(A)**|**TRUE COPY OF THE LETTER DATED 31.07.2017 ISSUED BY**| |---|---| ||**THE REPSONDENT INVOKING THE ARBITRATION CLAUSE AND**| ||**SUGGESTING THE SOLE ARBITRATOR.**| |**ANNEXURE R1(B)**|**TRUE COPY OF THE LETTER DATED 11.08.2017 BY THE**| ||**APPLICANT.**| |**ANNEXURE R1(C)**|**TRUE COPY OF THE JUDGMENT DATED 30.10.2020 IN**| ||**WA.NO.1410/2020**| |**ANNEXURE R1(D)**|**TRUE COPY OF THE RELEVANT PAGES OF ADDITIONAL**| ||**AGREEMENT DATED 16.03.2011.**|