LexUNION OF INDIA versus BESCO LTD.
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[2017] 2 S.<C.R. 743 UNION OF INDIA v. BESCO LTD. (CivilAppealNo.4483 of2017) with (Special Leave Petition (Civi I) No.26614 of2014) MARCH 27, 2017 [KURIAN JOSEPH AND R. BANUMATHI, JJ.] Arbitration and Conciliation Act, 1996 - s.11 (6) -Appointment of arbitrator - Whether the Chief Justice of a High Court or any person or institution designated by him, while exercising power u/s.11 (6) is bound to nominate an arbitrator as specified in the agreement for arbitration - Held: If the circumstances so warrant. the Chief Justice or the designated Judge can ignore the ;pecified arbitrator as stipulated in the agreement and nominate an independent arbitrator - In the instant case, tliere was no stipulation in the agreement to appoint a particular category of officer _: Therefore, designated judge of High Court rightly exercised his powers in terms of agreement by nominating an independent arbitrator. Dismissing the appeal and the special leave petition, the Court A B c D E HELD: 1., Even when an arbitrator is specified in the agreement for arbitration, if circumstances so warrant, the Chief F Justice or the designated Judge is free to appoint an independent arbitrator, having due regard to the qualification, if any, and other aspects as required under Se~tion 11(8) of the Act. In the instant case, Clause 2900 of the Standard Conditions of Contract no doubt provided that the sole arbitrator shall be a Gazetted Railway Officer but in Clause 19.0 of the agreement dated 16.01.2012 G executed between the parties, it is clearly s(ipulated that the contract shall be governed by th~ General Conditions and Special -- · Conditions of Contract. It is clear from Clau.se 19.0 that there is no stipulation for appointment-of a Railway Officer. It can be any person. Thus, the designated Judge of the High Court only H 743 744 SUPREME COURT REPORTS [2017] 2 S.C.R. A exercised his powers in terms of the agreement by nominating an independent arbitrator.[Paras 8, 9, 11)(749-G-H; 750-A-B, G) Northern Railway Administration, Ministry of Raiiway, New Delhi v. Patel Engineering Company Limited (2008) 10 SCC 240 : [2008) 12 SCR 216; North Eastern - B Railway and others v. Tripple Engineering Works (2014) 9 SCC 288 : (2014] 6 SCR 1143; Indian Oil Corporation and others v. Raja Transport Private Limited (2009) 8 SCC 520 : [2009) 13 SCR 510 - relied on. c Union of India and another v. M.P. Gupta (2004) 10 SCC 504; Union of India and others v. Master Construction Company (2011) 12 SCC 349 : [2011) S SCR 853 - referred to. Case Law Reference D (2004) 10 sec 504 referred to -~ Para3 J2011J 5 SCR 853 • referred to Para3 [2008] 12 SCR 216 relied on Para4 [2014] 6 SCR 1143 relied on Para4 E [2009] 13 SCR 510 relied on Para7 - CIVIL APPELLAT_E JURISDICTION: Civil Appeal No. 4483 of2017. From the Judgment and Order dated 08.052014 of the High Court F of Delhi at New Delhi in Arbitration Petition No. 425 of2013 G H WITH Special Leave Petition( Civil) No. 26614of2014. Maninder Singh, ASG, Sachin Sharma,Amarjeet Singh, B. Krishna Prasad, Shreekant N. Terdal, Advs. for the Appellant. Dushyant Dave, Sr. Adv., Ramesh Singh, Ms. Anne Mathew, SumanJoyti Khaitan, T. S.Ahuja, VarunAhuja, D. K. Thakur,Devendra Jha, Debasis Misra, Advs. for the Respondent. The Judgment of the Court was delivered by . UNION OF INDIA v. BESCO LTD. KURIAN, J. 1. Leave granted. 2. The short question arising for consideration in this case is whether the Chief Justice of a High Court or any person or institution designated by him, while exercising power under Section 11(6) ofThe Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act") is bound to nominate an arbitrator as specified in the agreement for arbitration. The designated Judge in the High Court took the view that the appellant has lost the mandate to appoint an arbitrator since it failed to appoint the arbitrator within the permitted time and hence nominated an independent arbitrator. 3. Mr. Maninder Singh, learned Additional Solicitor General, placing reliance on Union of India and anotherv. M.P. Gupta' and Union of India and others v. Master Construction Company', submitted that the designated Judge, exercising the power under Section 11 ( 6) of the Act, is bound to nominate a person as stipulated in the agreement for arbitration. In M.P. Gupta (supra), the relevant clauses on arbitration contained a
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