LexWALTER BAU AG, LEGAL SUCCESSOR, OF THE ORIGINAL CONTRACTOR, DYCKERHOFF & WIDMANN AG versus MUNICIPAL CORPORATION OF GREATER MUMBAI & ANR.
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[2015] 2 S.C.R. 37 WALTER BAU AG, LEGAL SUCCESSOR, OF THE A ORIGINAL CONTRACTOR, DYCKERHOFF & WIDMANN AG v. MUNICIPAL CORPORATION OF GREATER MUMBAI & ANR. B (Arbitration Case (Civil) No. 35 Of 2014) JANUARY20, 2015 [RANJAN GOGOi, J.] c Arbitration and Conciliation Act, 1996- s. 11 (6) - Petition under- Maintainability of-Arbitration clause -Agreed upon procedure contemplated appointment of the arbitrator by the second party within 30 days of receipt of notice from the first party- Upon failure by second party to appoint arbitrator on o its behalf as per the agreement, matter referred to International Centre for Alternative Disputes Resolution (ICADR) for appointment of Arbitrator on behalf of the second party-Appointment of second arbitrator by ICADR- Petition u/s. 11(6) challenging the appointment made by ICADR on E the ground that the same was not as per procedure contemplated uls 5 and 35 of ICADR Rules - Maintainability of the petition challenged - Held: Unless the appointment of the arbitrator is ex facie valid and such appointment satisfies the Court exercising jwisdiction uls. 11 (6), acceptance of such F appointment as a fait accompli to debar the jurisdiction u/s. 11 (6) cannot be countenanced in law - Appointment of the second arbitrator being contrary to the Rules, was not valid and hence non-est in law- Such appointment, therefore, will not inhibit exercise of jurisdiction u/s 11 (6) and the petition is G maintainable -Arbitrator appointed on behalf of the second party - International Centre for Alternative Disputes Redressal Rules, 1996 - rr. 5 and 35. 37 H 38 SUPREME COURT REPORTS [2015] 2 S.C.R. A Disposing of the petition, the Court HELD: Unless the appointment of the arbitrator is ex facie valid and such appointment satisfies the Court exercising jurisdiction under Section 11(6) of the 8 Arbitration Act, 1996 acceptance of such appointment as a fait accomplito debar the jurisdiction under Section 11 (6) cannot be countenanced in law. In the present case, the appointment of the arbitrator on behalf of the respondent-Corporation is clearly contrary to the c provisions of the Rules governing the appointment of Arbitrators by ICADR, which the parties had agreed to abide in the matter of such appointment. The option given to the respondent-Corporation to go beyond the panel submitted by the ICADR and to appoint any person D of its choice was clearly not in the contemplation of the parties. Thus, the appointment of the arbitrator, by the respondent-Corporation, is non-est in law. Such an appointment, therefore, will not inhibit the exercise of jurisdiction by this Court under Section 11 (6) of the E Arbitration Act. It cannot, therefore, be held that the present proceeding is not maintainable in law. Consequently, the present petition is allowed and Shri Justice S.R. Sathe, a retired judge of the Bombay High Court is appointed as the Arbitrator on behalf of the F respondent-Corporation. [paras 9 and 10] [49-8-C, E-H; 50-D] G H Antrix Corporation Limited versus Devas Multimedia Private Limited 2013 (6) SCR 453 = (2014) 11 SCC 560; Pricol Limited versus Johnson Controls Enterprise Ltd. & Ors. 2014 (14) SCALE 74; Deep Trading Company versus Indian Oil Corporation and others 2013 (2) SCR 470 = (2013) 4 sec 35 - distinguished. Datar Switchgears Ltd. Versus Tata Finance WALTER BAU AG. v. MUNICIPAL CORP. OF GREATER 39 MUMBAI Ltd. and another (2000) 8 sec 151 - referred to. A Case Law Reference 2013 (2) SCR 470 distinguished para 7 2013 (6) SCR 453 distinguished para 8 B 2014 (14) SCALE 74 distinguished para 8 (2000) s sec 151 referred to para 9 CIVIL ORIGINAL JURISDICTION :Arbitration Petition c (Civil) No. 35 of 2014 Shamik Sanjanwala, Kailash Pandey, Ranjeet Singh, K. V. Sreekumar, for the Appellant. Mukul Rohatgi,AG, Dhruv Mehta, J. J. Xavier,Ashish Wad, D Anshuman Srivastava, Jayashree Wad (For J. S. Wad & Co.), for the Respondents. The Judgment of the Court was delivered by RANJAN GOGOi, J. : 1. A works contract No.3AAA E dated 201h December, 2000 was executed by and between the petitioner and the Municipal Corporation of Greater Mumbai (respondent No.1 herein) for execution of city tunnel rehabilitation works for the purposes of transporting the city's sewage. Disputes and differences having arisen between the F parties under the said contract, the petitioner invoked the arbitration clause cont
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