Score Information Technologies Limited vs. Gr Infra Projects Limited - (High Court of Delhi) (28 Jan 2021)

Parties may waive the applicability of Section 12(5) of A&C Act by way of an express agreement in writing after the disputes have arisen

MANU/DE/0142/2021

Arbitration

The Petitioner has filed the present petition under Sections 14 and 15 of the Arbitration and Conciliation Act, 1996 ('A&C Act'), seeking that the mandate of the learned Sole Arbitrator appointed by the Respondent be terminated. According to the Petitioner, the learned Arbitrator is de jure unable to act as an Arbitrator under the A&C Act. The disputes between the parties arise out of a contract whereby the Respondent had sub-contracted the work. The limited issue to be addressed is whether the petitioner has waived the applicability of Section 12(5) of the A&C Act.

In terms of the proviso to Sub-section 12(5) of the A&C Act, the parties may waive the applicability of Section 12(5) of the Act. However, the said waiver has to be (i) subsequent to the disputes having arisen; and (ii) made by way of "an express agreement in writing". Concededly, in present case, there is no written agreement between the parties, whereby the Petitioner has agreed to waive the applicability of Section 12(5) of the A&C Act.

Present Court is also unable to accept that, the proceedings recorded by the Arbitrator would constitute such an express agreement in the facts of this case. The Petitioner had pointed out that on that date, its representatives were not assisted by any counsel. It is also averred by the Petitioner that, the proceedings of the day, which are not signed by the parties, incorrectly record that, the Petitioner had no objection for the appointment of the learned Arbitrator. The Petitioner had immediately on receipt of the notice of appointment of the learned Arbitrator, had objected to such appointment.

The Petitioner had in its letter clearly stated that, it had not submitted to the jurisdiction of the learned Sole Arbitrator. Although the Petitioner had not specifically referred to its objection to the Respondent unilaterally appointing the learned Arbitrator, it nonetheless, had expressed its opposition to the appointment of learned Arbitrator. Thereafter, the Petitioner had objected to the appointment of the learned Arbitrator and contended that, the Respondent had appointed the Arbitrator as a dilatory tactic to withhold the payments due to the Petitioner. Thus, it is difficult to accept that, the Petitioner had not objected to the appointment of the learned Arbitrator. Subsequently, by an email, the Petitioner had expressly stated that, the unilateral appointment of the Tribunal is contrary to the decision of the Supreme Court in Perkins Eastman Architects DPC and Anr. vs. HSCC (India) Limited.

The mandate of learned Arbitrator unilaterally appointed by the Respondent stands terminated. Justice (Retired) R.C. Chopra, a former judge of this Court is appointed as the Sole Arbitrator to adjudicate the disputes that have arisen between the parties in connection with the Work Order dated 11th August, 2015. This is subject to the Arbitrator making the necessary disclosure under Section 12(1) of the A&C Act and not being ineligible under Section 12(5) of the A&C Act. The petition is allowed.

Tags : ARBITRATOR APPOINTMENT ELIGIBILITY