Himachal Pradesh High Court
State Of Himachal Pradesh vs Bmd Private Limited on 14 July, 2025
Author: Ajay Mohan Goel
Bench: Ajay Mohan Goel
2025:HHC:24169
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
CARBC No.16 of 2025 a/w
CARBC No.17 of 2025
.
Reserved on: 17.06.2025
Decided on: 14.07.2025
CARBC No.16 of 2025
State of Himachal Pradesh … Petitioner/Objector
Versus
BMD Private Limited … Respondent/Claimant
CARBC No.17 of 2025
State of Himachal Pradesh … Petitioner/Objector
Versus
BMD Private Limited … Respondent/Claimant
Coram
Hon’ble Mr. Justice Ajay Mohan Goel, Judge.
Whether approved for reporting?1Yes
____________________________________________________ _
For the petitioner(s) : Mr. Vinay Kuthiala, Senior Advocate,
with M/s Vandana Kuthiala and Devi
Singh, Advocates, in both the cases.
For the respondent(s) : Mr. Ankush Dass Sood, Senior
Advocate, with M/s Manish Kumar,
Abhishek Dulta, Vishal Verma and
Gaurav Chaudhary, Advocates, in
both the cases.
Ajay Mohan Goel, Judge
As common issues of facts and law are involved in both
these petitions and as arguments were also jointly heard in these
cases, the same are being disposed of vide a common judgment.
2. It is pertinent to mention at this stage that arguments
were previously heard in these matters on 14.05.2025 and
judgment was reserved. Mr. Vinay Kuthiala, learned Senior Counsel,
addressed the arguments on behalf of the petitioner and Mr.Manish
1
Whether reporters of the local papers may be allowed to see the judgment?
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Kumar, learned counsel, addressed the arguments on behalf of the
respondent. After the judgment was reserved, a miscellaneous
.
application, i.e. CARAP No.53 of 2025, was filed on behalf of the
petitioner with the request to place on record subsequent events.
The application was listed in the Court on 28.05.2025, notice was
issued and the non-applicant was called upon to file reply thereto.
The application was filed in CARBC No.16 of 2025 only. Reply to the
application was filed by the non-applicant. The prayer in the
application was to place on record subsequent events, including
passing of judgment by Hon’ble Supreme Court of India on
13.05.2025, mentioned in the application, which as per the
applicant was not brought to the notice of the Court during the
course of arguments, when the judgment was reserved on
14.05.2025. This application was disposed of by the Court on
17.06.2025, when alongwith Mr. Manish Kumar, learned counsel for
the respondent/Company, Mr. Ankush Dass Sood, learned Senior
Counsel, also assisted the Court. The application was disposed of in
the following terms:-
“Having heard learned Senior Counsel for the parties, as
agreed, this application is disposed of by observing that
the judgments referred to therein shall be taken into
consideration while deciding the main case.”
Thereafter, the judgment was reserved again.
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3. The State has filed these two petitions against the
respective Awards dated 29.04.2023, passed by the learned
.
Arbitrator, in the Claim Petitions filed by the respondent herein. The
Awards are ex parte Awards.
4. In CARBC No.16 of 2025, the following Award has been
passed by learned Arbitrator in favour of the respondent:-
“12.1 Accordingly, award is passed in favour of the
claimant and against the respondent, for payment of
Rs.8,41,04,572 (Eight Crores Fourty One Lacs FourThousand Five Hundred Seventy Two) (6,00,73,973 +
2,40,29,589) with interest @15% per annum under claim
heads (a) and (b); Nil under claim head (c); and
Rs.33,60,668 Thirty Three Lacs Sixty Thousands SixHundred Sixty Eight) (Rs.13,60,668.00 +20 lacs) under
claim head (d).
12.2 The Respondent shall pay the award money to the
claimant within a period of three months.”
In CARBC No.17 of 2025, the following Award has been passed by
learned Arbitrator in favour of the respondent:-
“12.1 Accordingly, award is passed in favour of the
claimant and against the respondent, for payment of
Rs.8,41,04,572 (Eight Crores Fourty One Lacs Four
Thousand Five Hundred Seventy Two) (6,00,73,973 +
2,40,29,589) with interest @15% per annum under claim
heads (a) and (b); Nil under claim head (c); and
Rs.33,60,668 Thirty Three Lacs Sixty Thousands Six
Hundred Sixty Eight) (Rs.13,60,668.00 +20 lacs) under::: Downloaded on – 25/07/2025 21:20:49 :::CIS
4 2025:HHC:24169claim head (d).
12.2 The Respondent shall pay the award money to the
.
claimant within a period of three months.”
5. As per the averments made in the petitions, in response
to the Global Bids invited by the Government of Himachal Pradesh,
the respondent applied for the allotment of Dhancho Hydro Electric
Project (HEP) and Malana-III HEP. On 05.08.2010, the Government
of Himachal Pradesh allotted Dhancho HEP for an installed capacity
of 12 MW in favour of the respondent on the basis of quoting a
higher financial bid, at the rate of 23.21% additional free power over
and above normal free royalty with fixed upfront premium @ Rs.20
Lakh/MW amounting to Rs.240 Lakh. On the same date,
Government of Himachal Pradesh also allotted to the respondent,
Malana-III HEP for an installed capacity of 30 MW on the basis of
quoting a higher financial Bid @ 17.61% additional free power, over
and above normal free royalty with fixed upfront premium @ 20
Lakh/MW amounting to Rs.600 Lakh.
6. Thereafter, Letters of Allotment with regard to both these
projects were issued in favour of the respondent by the
petitioner/State on 04.05.2011 and Pre-Implementation Agreements
(hereinafter to be referred as “the PIAs”) were signed on 26.05.2011.
According to the petitioner, an amount of Rs.1.2 Crore was deposited
by the respondent towards the first installment, i.e. 50% of total
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upfront premium charges on 02.05.2011 and Rs.1.20 Crore towards
second installment, i.e. balance 50% of total upfront premium
.
charges in the month of May, 2012 with regard to Dhancho HEP.
With regard to Malana-III HEP, an amount of Rs. 3 Crore was
deposited by the respondent towards first installment, i.e. 50% of
total upfront premium charges on 02.05.2011 and Rs.3 Crore
towards second installment, i.e. balance 50% of total upfront
premium charges in the month of May, 2012.
7. The Detailed Project Report with an installed capacity of
18 MW qua Dhancho HEP and 30 MW qua Malana-III HEP was
submitted by the developer on 28.08.2013 in accordance with the
Techno Economic Clearance.
8. According to the petitioner, the respondent failed to sign
the Implementation Agreement with regard to both these Projects
within the time period allowed in the Pre-Implementation
Agreement. On account thereof, the upfront deposited by the
respondent was forfeited by the petitioner as per the terms of Pre-
Implementation Agreement.
9. Respondent-Company, vide letter dated 21.01.2019,
requested for surrender and refund of 100% upfront premium with
interest in respect of both the Projects. The matter was taken up by
the Government, wherein the Government vide CMM in its Meeting
held on 08.08.2019, approved to cancel the allotment of the said two
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Projects and terminate the Pre-Implementation Agreement signed on
26.05.2011, as the Company had failed to sign the Implementation
.
Agreement within the time period stipulated in the Pre-
Implementation Agreement. Forfeiture of upfront premium deposited
by the Company was also approved without any liability of the
Government. The termination/cancellation order was accordingly
issued to the Company on 03.10.2019.
10. On 30.10.2019, the petitioner received a Legal Notice for
the refund of upfront premium for an amount of Rs.2.40 Crore qua
Dhancho HEP and Rs.6 Crore qua Malana-III HEP on the ground
that the Project had become unviable. It was mentioned in this Legal
Notice that if the upfront premium was not refunded, then said Legal
Notice be treated as a Notice invoking arbitration by proposing the
name of Justice S.N. Jha, (Retired) Chief Justice of the High Court of
Rajasthan and Jammu & Kashmir, as the Arbitrator.
11. Thereafter, the petitioner received a copy of letter dated
07.12.2019, addressed by Munish Kumar and Associates Advocates
for the respondent to Justice S.N. Jha, (Retired), in terms whereof,
the respondent unilaterally requested Justice S.N. Jha, (Retired), to
preside as the Sole Arbitrator and adjudicate the dispute between
the parties to the Pre-Implementation Agreements, dated
26.05.2011, respectively.
12. Vide letter dated 13.12.2019, the petitioner intimated
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the respondent that neither Directorate of Energy has consented to
the name of Justice S.N. Jha, (Retired) as Sole Arbitrator, as
.
proposed by the respondent, nor it should be construed as implied
consent of the petitioner for his appointment as such. The
respondent was requested to act according to the provisions of the
Arbitration and Conciliation Act, 1996. Said letter was sent to the
respondent through e-mail as well as by post. Copies of the letter
were also sent to Justice S.N. Jha, (Retired) and Munish Kumar and
Associates Advocates through Registered A.D.
13. As per the petitioner, an application under Section 13(3)
and 13(2) of the Arbitration and Conciliation Act was sent to Justice
S.N. Jha, (Retired) and Munish Kumar & Associate Advocates
through Registered A.D.. However, to the utter surprise of the
petitioner, a Notice dated 19.12.2019 was received from Justice S.N.
Jha, (Retired) by the petitioner, wherein Justice S.N. Jha, (Retired)
informed that he was appointed as the Sole Arbitrator by the
respondent and that he had fixed the matter for 21.01.2020, for
preliminary hearing at 2:00 p.m. at his Office, at C/41 (Lower
Ground Floor), Jangpura Extension, New Delhi-110014, to decide
the modalities of arbitration. The petitioner was directed to appear in
person or through a duly a authorized representative and participate
in the proceedings.
14. According to the petitioner, feeling dissatisfied and
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aggrieved,it filed petitions in this Court for appointment of an
Arbitrator in terms of Clause-53 of the Pre-Implementation
.
Agreement entered into between the petitioner and the respondent.
The petitions filed by the petitioner for appointment of the Arbitrator
were dismissed by this Court on 02.06.2022. As per the petitioner as
the appointment of learned Arbitrator was illegal and the learned
Arbitral Tribunal did not had any jurisdiction to adjudicate the
dispute, therefore, the petitioner did not appear before him at any
stage except for the purpose of filing an application under Sections
13(1) and 13 (2) of the Arbitration and Conciliation Act for closure of
the arbitral proceedings. Further, as per the petitioner learned
Arbitrator disregarded the prayer of the petitioner and continued
with the arbitral proceedings, resulting in the passing of the
impugned Awards, dated 29.04.2023. Feeling aggrieved, the
petitioner has filed these two petitions.
15. Learned Senior Counsel appearing for the petitioner
argued that the Awards passed by learned Arbitrator are per se bad
and non est in the eyes of law. Learned Senior Counsel submitted
that Clause-53 of the Pre-Implementation Agreement entered into
between the parties, provided that in the event of any difference or
dispute between the parties arising out of the PIA/IA, endeavour
shall be to resolve the differences mutually, failing which, the matter
was to be referred to the Arbitrator, to be appointed as per the
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provisions of Arbitration and Conciliation Act, 1996. He submitted
that in terms of this Clause, no power was vested with either of the
.
parties to solely nominate or appoint an Arbitrator. He further
submitted that as in the present case, the respondent unilaterally
appointed a sole Arbitrator in derogation to the contents of Clause-
53 of the PIA, the Awards passed by such an Arbitrator was non est
in the eyes of law. He submitted that once the appointment of
learned Arbitrator was not in terms of the agreement entered into
between the parties, the Awards passed passed by Arbitrator were
not binding on the petitioner, more so, when the petitioner had never
accepted the appointment of said Arbitrator by the respondent. He
argued that since Justice S.N. Jha, (Retired), who was appointed as
a sole Arbitrator unilaterally by the respondent had no jurisdiction to
decide the case, his appointment as an Arbitrator was per se bad
and the petitioner was not bound to appear before such an
Arbitrator and therefore, the Awards passed by the Arbitrator being
without any authority in law were liable to be set aside. He also
argued that the only course available for the parties was to approach
this Court under Section 11 of the Arbitration and Conciliation Act
for the appointment of an Arbitrator. As the sole Arbitrator was not
appointed by following the procedure prescribed in Section 11 of the
Arbitration and Conciliation Act, his nomination by the respondent
was not binding upon the petitioner and neither are the Awards
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passed by him. Learned Senior Counsel also submitted that the
dismissal of the applications filed by the petitioner under Section 11
.
of the Arbitration and Conciliation Act for appointment of an
Arbitrator by this Court could also not come in the way of the
petitioner in assailing the Awards passed by learned Arbitrator
because learned Arbitrator had no jurisdiction to decide the claims
and therefore, the petitioner had the right to assail the appointment
of the Arbitrator in terms of Section 34 of the Arbitration and
Conciliation Act and further such liberty was granted to the
petitioner even by the High Court while deciding its application filed
under Section 11 (6) of the Arbitration and Conciliation Act. Learned
Senior Counsel, accordingly, prayed that as the Award under
challenge was passed by learned Arbitrator without any legal
Authority to pass the same, the present petition be allowed and the
Award being passed be quashed and set aside. No other point was
urged.
16. On the other hand, learned Counsel for the respondent
submitted that there was no infirmity in the appointment of the sole
Arbitrator by the respondent, for the reason that said appointment
was not unilateral as was being alleged. Learned Counsel submitted
that the petitioner was intimated by the respondent that it was
proposing the name of Justice S.N. Jha, (Retired) as Arbitrator and
the petitioner did not object to the same. He further submitted that
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in the light of the fact that the applications filed by the petitioner
under Section 11(6) of the Arbitration and Conciliation Act for
.
appointment of an Arbitrator were rejected by this Court, now on the
same plea, the petitioner cannot be allowed to agitate the Awards
passed by learned Arbitrator, as the only ground urged before this
Court for assailing the Awards passed by learned Arbitrator was that
his appointment was not as per Section 11 (6) of the Arbitration and
Conciliation Act. Learned Counsel submitted that the findings
returned by Hon’ble Coordinate Bench of this Court while deciding
this issue were binding upon the parties. Nothing prevented the
petitioner from assailing the order passed by Hon’ble Coordinate
Bench on the application filed by the State under Section 11 (6) of
the Arbitration and Conciliation Act, but they did not do so. Learned
counsel submitted that perusal of the order passed by Hon’ble
Coordinate Bench would demonstrate that what weighed with the
Hon’ble Coordinate Bench while dismissing the application of the
petitioner was that the petitioner had submitted to the jurisdiction
of the learned Arbitrator. Learned Counsel submitted that in this
backdrop when the applications filed by the petitioner under Section
11(6) of the Arbitration and Conciliation for appointment of the
Arbitrator in both the matters were dismissed by the Hon’ble
Coordinate Bench and said findings have attained finality as the
orders passed by the Hon’ble Coordinate Bench were not challenged
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by the State, the petitioner cannot be allowed to now assail the
awards on the same plea.
.
17. I have heard learned counsel for the parties and have
also carefully gone through the Awards in issue as well as pleadings
of the parties.
18. The moot point for consideration before this Court is as
to whether the Awards, passed by the learned Arbitrator are bad in
law, for the reasons propounded on behalf of the petitioner or not.
19. The findings returned on merit in the Awards, were not
touched by the parties in the course of arguments.
20. The mode and manner in which the learned Arbitrator
was appointed in this case has already been mentioned by me in the
above paragraphs of the judgment and the same is not repeated for
the sake of brevity. The chronology of events is in fact not much in
dispute also.
21. It is evident from the events as they happened
chronologically that after the respondent-Company vide
communication dated 21.01.2019 requested for the surrender and
refund of 100% upfront premium with interest, the matter was taken
up by the Government and the Council of Ministers in its meeting
held on 08.08.2019 approved the cancellation of the allotment of
both the projects and terminated the Pre-implementation Agreement
which was signed on 26.05.2011. Forfeiture of the upfront premium
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deposited by the Company was also approved. The termination/
cancellation order was issued on 03.10.2019 upon the Company.
.
The Legal Notices were issued on behalf of the respondent- Company
on 30.10.2019 for the refund of upfront premium qua both the
projects and it was also mentioned in these Legal Notices that in
case the upfront premium was not refunded, then said Legal Notices
were to be treated as Notices invoking arbitration by proposing the
name of Justice S.N. Jha, (Retired) as the learned Arbitrator. It is
also an admitted position that thereafter, the petitioner received a
copy of letter dated 07.12.2019 addressed by Manish Kumar and
Associate Advocates for the respondent- Company, to the learned
proposed Arbitrator, in terms whereof, the Company requested the
learned proposed Arbitrator to preside as the sole Arbitrator.
22. To complete the chronology, thereafter, the petitioner
intimated the respondent-Company vide letter dated 13.12.2019 that
Directorate of Energy had not consented to the name of the learned
proposed Arbitrator and as per the petitioner the respondent-
Company was requested to act according to the provisions of
Arbitration and Conciliation Act. Copy of the letter is also stated to
be sent to the learned proposed Arbitrator.
23. According to the petitioner, an application under Section
13 (2) and 13 (3) of the Arbitration Conciliation Act was also sent to
the proposed Arbitrator. However, to the utter surprise of the
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petitioner on 19.12.2019, a Notice was received from Justice S.N.
Jha, (Retired), informing that he stood appointed as the sole
.
Arbitrator by the respondents and that he had fixed the matter on
21.01.2020 for preliminary hearing at 2:00 p.m. to decide the
moralities of the arbitration. This as per the petitioner, led to the
filing of a petitions under Section 11 (6) of the Arbitration and
Conciliation Act by the petitioners in both the matters in the High
Court.
24. In other words, feeling dissatisfied by the appointment of
Justice S.N. Jha, (Retired) as the sole Arbitrator by the respondent-
Company, the petitioner opted to invoke the provisions of Section
11(6) of the Arbitration and Conciliation Act, which as per the
petitioner was the right course for the appointment of the Arbitrator,
by filing separate petitions in both the matters before this Court.
Now incidentally, it is a matter of record that the petitions filed by
the State under Section 11(6) of the Arbitration and Conciliation Act,
i.e. Arbitration case No. 5 of 2020 and Arbitration case No.6 of 2020
were dismissed by the Hon’ble Coordinate Bench of this Court vide
order dated 02.06.2022. The findings returned by Hon’ble Coordinate
Bench while dismissing the petitions filed by the petitioners are
quoted herein below:-
“26. Hon’ble Apex Court in S.P. Singla, while placing
reliance upon earlier judgment passed in Antrix::: Downloaded on – 25/07/2025 21:20:49 :::CIS
15 2025:HHC:24169Corporation Limited v. Devas Multimedia Private Ltd.
(2014) 11 SCC 560, reiterated that where the parties fail.
to act in terms of the procedure agreed upon by them,
provisions of sub-section (6) of S.11 of the Act can be
invoked by any of the parties, praying therein for
appointment of arbitrator. However, where in terms of the
agreement, arbitration clause has already been invoked
by one of the parties thereto, provisions of sub-section (6)
of S.11 cannot be invoked and in that case, the aggrieved
party has remedy to file petition under S.13 of the Act
before
r arbitrator laying therein challenge to the
appointment of arbitrator by the other party in terms of
the agreement. Order passed in the petition under S.13
thereafter can be laid further challenge by way of petition
under S.34 of the Act.
27. In the case at hand, it is not in dispute that the
respondent by way of legal notice (Annexure P-3), dated
30.12.2019, expressed its intention to invoke arbitration
clause i.e. Clause 53 of the PIA. While doing so, it
specifically stated in para-15 that in case the notice did
not refund the sum of Rs. 6.00 Crore deposited by it as
upfront premium, legal notice may be treated as a notice
invoking arbitration clause in terms of PIA dated
26.5.2011. In the aforesaid para, respondent proposed the
name of Justice S.N. Jha, retired Chief Justice, Rajasthan
and Jammu & Kashmir. Though in para-16 of the legal
notice, respondent stated that in case the notice i.e. the
petitioner fails to concur/agree with its proposal to appoint
S.J. Jha as sole arbitrator within 30 days from the date of
receipt of notice, it shall be constrained to take appropriate
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steps for appointment and constitution of arbitral tribunal,
but, in the case at hand, petitioner kept on sleeping over
.
the matter after expiry of 30 days. Though, in the case at
hand, vide communication dated 13.12.2019, addressed
to the respondent, petitioner objected to unilateral action
of the respondent in as much as appointment of Justice
S.N. Jha as sole arbitrator is concerned, but after having
received notice dated 19.12.2019, Annexure P-6, from the
sole arbitrator, it subjected itself to the jurisdiction of the
above named arbitrator by filing an application under
S.13 of the Act, laying therein challenge to appointment of
the arbitrator. Though, none of the parties to the lis,
placed on record petition filed under S.13 of the Act by the
petitioner before learned arbitrator, laying therein
challenge to the appointment of the arbitrator, but factum
with regard to filing of an application under aforesaid
provisions of law never came to be refuted by the
petitioner.
28. Though, in the case at hand, petitioner specifically
admitted the factum with regard to its having received
notice dated 19.12.2019 Annexure P-6 from the arbitrator
intimating therein factum with regard to listing of
arbitration case on 21.1.2020, but at no point of time,
disclosed that after having received aforesaid notice, it
fled an application under S.13 of the Act, laying therein
challenge to appointment of arbitrator and it is only
during proceedings of the case at hand the factum with
regard to initiation of proceedings under S.13 of the Act by
the petitioner before learned arbitrator came to the notice
of the Court. Learned counsel appearing for the
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respondent vehemently argued that once the proceedings
under S. 13 of the Act are pending before learned
.
arbitrator, petitioner is estopped from filing instant petition
seeking therein appointment of arbitrator, as has been
taken note herein above.
29. Hon’ble Apex Court in Antrix supra has categorically
held that after appointment of the arbitrator, remedy
available with the aggrieved party is not under S.11(6) of
the Act but under different provision of the Act i.e. Ss. 12
and 13. In the case at hand, as per procedure agreed
between the parties, petitioner was under obligation to
appoint an arbitrator within 30 days of receipt of the
notice from first party i.e. respondent. Though, Mr. Sudhir
Bhatnagar, learned Additional Advocate General, while
inviting attention of this Court to case decided by Hon’ble
Apex Court in Dattar Switchgrears Ltd. v. Tata Finance
Ltd. & anr. (2000) 8 SCC 151 argued that once
appointment of arbitrator is clearly contrary to the
provisions of the law governing appointment of arbitrator,
application, if any, filed under S. 13(3) before the
arbitrator unilaterally appointed by the respondent for
termination of mandate of the arbitrator, is of no
relevance.
30. This court, however, is not impressed with the
aforesaid argument because, facts in Dattar supra were
totally different from the facts of present case. In the
aforesaid case, very appointment of arbitrator was found
to be contrary to the provisions of the Rules governing
appointment of arbitrator at ICADR which the parties had
agreed to abide by in such matters. The option given to the
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respondent Corporation to go beyond the panel submitted
by the ICADR and to appoint any person of its choice was
.
clearly not in the contemplation of the parties, as such,
Hon’ble Apex Court rightly found appointment of above
named arbitrator to be nonest in law. Since the
appointment of the arbitrator was found to be nonest in
law, Supreme Court held that the party aggrieved by
appointment of arbitrator is not estopped from invoking
jurisdiction of this Court by filing an application under
S.11(6) of the Act.
31. In the case at hand, no such ground ever came to be
urged in the application filed under S.11(6) of the Act,
while seeking appointment of another arbitrator, rather,
the petitioner concealed material fact of its having filed
application under S. 13(3) read with S.13(2) of the Act
before arbitrator praying therein to terminate the mandate
of the arbitrator.
32. At this stage, it would be apt to take note of S.13(2)
and (3) of the Act, which read as under:
2) Failing any agreement referred to in sub-
section (1), a party who intends to challenge an
arbitrator shall, within fifteen days after
becoming aware of the constitution of the arbitral
tribunal or after becoming aware of any
circumstances referred to in sub-section(3) of
section 12, send a written statement of the
reasons for the challenge to the arbitral tribunal.
(3) Unless the arbitrator challenged under sub-
section (2) withdraws from his office or the other
party agrees to the challenge, the arbitral
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tribunal shall decide on the challenge.”
33. Provisions of S.13(3) clearly provides that the
.
challenge if any made to the appointment of the arbitrator
shall be decided by the arbitral tribunal and in case
challenge under procedure agreed by the parties under
sub-section (2) is not successful, arbitral tribunal shall
continue arbitration proceedings and shall made an
arbitral award.
34. In the case at hand, petitioner in communication dated
13.12.2019 addressed to the respondent, copy whereof
was also marked to the arbitrator, nowhere assigned
reason, if any, for not concurring with the proposal of the
respondent for appointment of arbitrator but only stated it
never consented for appointment of arbitrator.
35. S.13(2) provides that a party who intends to challenge
appointment of an arbitrator shall, within fifteen days
after becoming aware of the constitution of the arbitral
tribunal or after becoming aware of any circumstances
referred to in sub-section(3) of section 12 shall send a
written statement of the reasons for the challenge to the
arbitral tribunal. In the case at hand, on one hand, the
petitioner subjected itself to the jurisdiction of the learned
arbitrator by way of an application under S.13 of the Act,
praying therein for termination of the mandate of the
arbitrator and, on the other hand, approached this Court
in the instant proceedings, under S. 11 of the Act, praying
therein for appointment of another arbitrator, which is not
permissible, as has been discussed in detail herein above.
36. Consequently, in view of detailed discussion made
herein above as well as law taken into consideration, this
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court does not find present petitions under S.11(6) of the
Act to be maintainable and the same are accordingly
.
dismissed. All pending applications in both the petitions
stand disposed of. Interim directions, if any, also stand
vacated.”
25. A perusal of the findings returned by Hon’ble Coordinate
Bench, clearly demonstrate that Hon’ble Coordinate Bench was
pleased to hold that despite having raised an objection to the
appointment of Justice S.N. Jha, (Retired) as the sole Arbitrator,
vide communication dated 13.12.2019, after having received Notice
dated 19.12.2019 from the sole Arbitrator, the petitioner subjected
itself to the jurisdiction of the learned Arbitrator by filing
applications under Section 13 of the Arbitration and Conciliation
Act. Hon’ble Coordinate Bench further went on to hold that the
petitioner in the proceedings under Section 11 (6) of the Arbitration
and Conciliation Act in this Court, never disclosed the factum of
having filed any application under Section 13 of the Act, challenging
the appointment of the Arbitrator to the Court, and, it was only
during the proceedings of the case at hand that this fact came to the
notice of the Court. Hon’ble Coordinate Bench further went on to
hold that the reliance placed upon by the learned Additional
Advocate General on the judgment of Hon’ble Supreme Court of
India in Dattar Switchgrears Ltd. v. Tata Finance Ltd. & anr. (2000) 8
SCC 151, was of no relevance for the reason that the fact situation
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21 2025:HHC:24169
therein was totally different from the facts of the present case.
Hon’ble Coordinate Bench held in the aforesaid case the
.
appointment of the Arbitrator was found to be contrary to the
provisions of the rules governing appointment of Arbitrator at
ICADR, which the parties had agreed to abide by in such matters
and it was in said backdrop that Hon’ble Supreme Court was
pleased to hold that appointment of the concerned Arbitrator therein
was non est in the eyes of law, however, Hon’ble Coordinate Bench
held that no such ground ever came to be urged in the applications
filed under Section 11 (6) of the Arbitration and Conciliation Act
while seeking appointment of another Arbitrator rather the petitioner
concealed material fact of its having filed applications under Section
13 (2) read with Section 13 (3) of the Arbitration and Conciliation Act
before the Arbitrator. Accordingly, Hon’ble Coordinate Bench was
pleased to dismiss both the petitions by returning the findings which
have already been quoted by me hereinabove. These findings
returned by the Hon’ble Coordinate Bench have attained finality as
the State did not lay any challenge thereto. Therefore, the findings
returned by the Hon’ble Coordinate Bench that the petitioner had
submitted to the jurisdiction of the learned Arbitrator have attained
finality.
26. Now in this backdrop, when one peruses the
applications which were filed under Section 13 (2) and (3) of the
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22 2025:HHC:24169
Arbitration and Conciliation Act by the petitioner before the learned
Arbitrator, a perusal thereof demonstrates that all that was prayed
.
therein was that as the petitioners had filed petition under Section
11 (6) of the Arbitration and Conciliation Act before the High Court
therefore the learned Arbitrator should wait for the outcome thereof.
27. For ready reference, the contents of the applicants are
quoted hereinbelow:-
“APPLICATION UNDER SECTION 13(3) READ WITH
SECTION FOR CLOSURE OF THE ARBITRALPROCEEDINGS. 13(2) OF THE ARBITRATION AND
CONCILIATION ACT, 1996
Respectfully Sheweth
1. That the aforesaid proceedings are pending before this
Hon’ble Arbitrator and fixed for today i.e. 21.01.2020. It
is further submitted that the Arbitrator has been
nominated by the Non applicant/Claimant himselfunilaterally, whereas the Applicant/Respondent has
objected for the same.
2. That the applicant vides its Communication dated
13.12.2019, has conveyed to the Non-applicant that
Applicant has never consented for the appointment of the
Arbitrator and it should not be taken as implied consent
on behalf of the Applicant/Respondent. The copy of this
letter was also forwarded to your goodself through
registered AD.
3. That the applicant has already approached the Hon’ble
Chief Justice of High Court of Himachal Pradesh, vide
Arbitration Case No. 5 of 2020 titled State of HP through::: Downloaded on – 25/07/2025 21:20:49 :::CIS
23 2025:HHC:24169Director, Directorate of Energy Versus M/s BMD Pvt. Ltd.
through its Vice President, for the appointment of the.
independent and impartial Arbitrator and the matter was
listed before the Hon’ble Court on 10.01.2020 and
following order was passed “Notice to the respondent,returnable within Six weeks, on taking steps within one
week.
The certified copy of order is enclosed for kind perusal of
this Hon’ble Arbitral Tribunal.
4. That the matter is sub-judice before the Hon’ble High
Court of Himachal Pradesh. Hence, it would not beappropriate for your good-self to conduct further
proceedings in the aforesaid matter, till the final decision
of the Hon’ble Court.
5 That we have received a notice dated 19.12.2019 from
your good self, whereby it has been informed that
21.01.2020 is fixed for preliminary hearing, to be held at
2:00 PM at your office at Lower Ground Floor, JangpuraExtension, New Delhi-110014.
It is, therefore, humbly prayed that this application
may kindly be allowed and keeping in view the fact that
the matter is sub-judice before the Hon’ble High Court ofH.P, further proceeding in in this matter may kindly be
closed.”
28. There was no mention therein so as to lay a challenge to
the appointment of the learned Arbitrator and calling upon the
Arbitrator to adjudicate thereupon . It is also a matter of record that
the learned Arbitrator waited for the outcome of the petitions filed by
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24 2025:HHC:24169
the petitioners under Section 11 (6) of the Arbitration Conciliation
Act before this Court and after the said petitions were dismissed, it
.
thereafter went on to adjudicate and decide the arbitration claim. It
is also a matter of record that after the rejection of the petitions filed
under Section 11 (6) of the Arbitration and Conciliation Act by the
petitioners, State did not appear before the learned Arbitrator.
29. Therefore, in this backdrop, when the petitions filed by
the petitioners for the appointment of an Arbitrator under Section 11
(6) of the Arbitration and Conciliation Act were rejected by this Court
and further when the petitioners otherwise also in the application
filed under Section 13 of the Arbitration and Conciliation Act had
made a limited prayer before the learned Arbitrator to await the
outcome of the proceeding filed under Section 11 (6) of the
Arbitration and Conciliation Act, the petitioners have no right now to
challenge the Award in issue by raking again the plea that the
appointment of the Arbitrator was not in-consonance with the
Arbitration Clause, as this issue has attained finality in the light of
the findings returned by the Hon’ble Coordinate Bench.
30. The contention of the learned Senior Counsel for the
petitioners that in terms of the law laid down by the Hon’ble
Supreme Court of India, the proceedings under Section 11 (6) of the
Arbitration and Conciliation Act are only administrative in nature
and therefore, the order passed by the Hon’ble Coordinate Bench
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25 2025:HHC:24169
cannot be treated as binding and this Court in these proceeding
independently has to decide the issue as to whether the appointment
.
of the Arbitrator was in-consonance with the Arbitration Clause or
not does not impresses this Court. In the considered view of this
Court in terms of the law laid down by the Hon’ble Supreme Court of
India, though the appointment of an Arbitrator by the Court in
terms of the provisions of Section 11 (6) of the Arbitration and
Conciliation Act is an administrative act, but the adjudication that is
made while deciding an application filed under Section 11 (6) of the
Act is judicial in nature and the findings returned therein at least
are binding between the parties in collateral proceedings arising
between the same parties out of the same contract in which petitions
were filed under Section 11 (6) of the Arbitration and Conciliation
Act. Otherwise also, in case the contention of learned Senior
Counsel for the petitioners is accepted, then the findings written by
the Hon’ble Coordinate Bench shall be rendered otios which are
binding between the parties in the light of the fact that the State did
not choose to assail the order passed by the Hon’ble Coordinate
Bench in the petitions filed by it under Section 11 (6) of the
Arbitration and Conciliation Act. Therefore, this court does not finds
any merit in these petitions.
31. Now I will refer to the judgments cited by the learned
Senior Counsel for the petitioners.
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26 2025:HHC:24169
32. As has been mentioned in the above part of the
judgment also that earlier arguments in case were heard and the
.
judgment in both these cases was reserved on 14.05.2025.
Thereafter, an application was filed by the petitioners in CARBC
No.16 of 2025, i.e. CARAP No.53 of 2025, which was disposed of by
the Court on 17.06.2025 by passing the following order:-
“Having heard learned Senior Counsel for the parties, as
agreed, this application is disposed of by observing that
the judgments referred to therein shall be taken intoconsideration while deciding the main case.
33. Before referring to the other judgments relied upon by
learned counsel for the parties, this Court would firstly like to deal
with the judgments that are appended with the petition/ referred to
in the said miscellaneous application.
34. In terms of this application, there is a reference of the
judgment passed by Hon’ble Supreme Court of India in Special Leave
Petition (Civil) No.28104 of 2023, titled Office for Alternative
Architecture Versus Ircon Infrastructure and Services Limited, as well
as S.B.P. & Co. vs Patel Engineering Ltd. & Anr., 2005 (8) Supreme
Court Cases 618, as also Vidya Drolia Versus Durga Trading
Corporation, (2021) 2 Supreme Court Cases 1.
35. A perusal of the judgment passed by Hon’ble Supreme
Court in Special Leave Petition (Civil) No.28104 of 2023 (supra),
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27 2025:HHC:24169
demonstrates that in the said judgment, Hon’ble Supreme Court
reiterated that the Supreme Court or the High Court at the stage of
.
appointment of an Arbitrator shall examine the existence of the
prima facie arbitration agreement and not other issues.
36. In the considered view of this Court, this judgment of
the Hon’ble Supreme Court does not comes to the rescue of the
petitioners, for the reason that this Court is not examining the
correctness of the judgment passed by the Hon’ble Coordinate Bench
of this Court in the petitions filed by the petitioners under Section
11(6) of the Arbitration and Conciliation Act. This Bench being a
Coordinate Bench neither can nor has the jurisdiction to do the
same. The orders of the Hon’ble Coordinate Bench in the aforesaid
proceedings having attained finality, are binding between the parties
and also on this Court in the present collateral proceedings.
37. The judgments of the Hon’ble Supreme Court in S.B.P. &
Co. vs Patel Engineering Ltd. & Anr., 2005 (8) Supreme Court Cases
618, as also Vidya Drolia Versus Durga Trading Corporation, (2021) 2
Supreme Court Cases 1, also have no bearing on the present
adjudication because this Court is not estopping or refusing to
adjudicate the present petitions filed under Section 34 of the
Arbitration and Conciliation Act by the petitioners and the
adjudication being made is on merit in the light of the conduct of the
petitioners as well as the adjudications made by the Hon’ble
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28 2025:HHC:24169
Coordinate Bench in the petitions preferred by the petitioners under
Section 11 (6) of the Arbitration and Conciliation Act. This Court is
.
not holding that the petitioners have no right to invoke the
jurisdiction of this Court under Section 34 of the Arbitration and
Conciliation Act. All that this Court is holding is that in the peculiar
facts and circumstances of the case, the Awards passed by the
learned Arbitrator cannot set aside on the plea of the petitioners that
the appointment of the learned Arbitrator was not good enough.
38. Now, I will refer to the other judgments relied upon by
the learned Senior Counsel for the petitioner.
39. In Interplay Between Arbitration Agreements under
Arbitration and Conciliation Act, 1996 and Stamp Act, 1899, IN RE,
(2024) 6 Supreme Court Cases 1, Hon’ble Supreme Court has been
pleased to hold as under:-
“92. The Arbitration Act is a self-contained code inter alia
with respect to matters dealing with appointment of
arbitrators, commencement of arbitration, making of anaward and challenges to the arbitral award, as well as
execution of such awards.88 When a self-contained code
sets out a procedure, the applicability of a general legal
procedure would be impliedly excluded. 89 Being a self-
contained and exhaustive code on arbitration law, the
Arbitration Act carries the imperative that what is
permissible under the law ought to be performed only in
the manner indicated, and not otherwise. Accordingly,::: Downloaded on – 25/07/2025 21:20:49 :::CIS
29 2025:HHC:24169matters governed by the Arbitration Act such as the
arbitration agreement, appointment of arbitrators and.
competence of the Arbitral Tribunal to rule on its
jurisdiction have to be assessed in the manner specified
under the law. The corollary is that it is not permissible todo what is not mentioned under the Arbitration Act.
Therefore, provisions of other statutes cannot interfere with
the working of the Arbitration Act, unless specifiedotherwise.”
40. In N.N. Global Mercantile Private Limited Vs. Indo Unique
Flame Limited and others, (2021) 4 Supreme Court Cases 379,
Hon’ble Supreme Court has been pleased to hold in Para-18 thereof as
under:-
“18. Section 11 was amended by the 2016 Amendment
Act, which inserted sub-section (6-A), which now provides
that notwithstanding any judgment, decree or order of
any court, the examination would be confined only to theexistence of an arbitration agreement. The amendment of
2016 legislatively overruled the position with respect to
the jurisdiction under Section 11 of the Arbitration Act,and confined the examination only to the existence of an
arbitration agreement. In Duro Felguera S.A. v.
Gangavaram Port Ltd. 19 it was held that the legislative
intent was clear that at the pre-reference stage, there must
be minimal judicial intervention, and the only issue to be
decided would be the existence of the arbitration
agreement, and nothing more. This position was affirmed
by a three-Judge Bench in Mayavati Trading (P) Ltd. v.
Pradyuat Deb Burman“
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30 2025:HHC:24169
41. In Perkins Eastman Architects DPC and another Vs.
HSCC (India) Limited, (2020) 20 Supreme Court Cases 760, Hon’ble
.
Supreme Court has been pleased to hold as under:-
“26. The further question that arises is whether the power
can be exercised by this Court under Section 11 of the Act
when the appointment of an arbitrator has already been
made by the respondent and whether the appellantshould be left to raise challenge at an appropriate stage in
terms of remedies available in law. Similar controversy
was gone into by a Designated Judge of this Court inWalter Bau AG¹ and the discussion on the point was as
under: (SCC pp. 805-06, paras 9-10)
“9. While it is correct that in Antrix 16 and Pricol Ltd.
17, it was opined by this Court that after
appointment of an arbitrator is made, the remedy of
the aggrieved party is not under Section 11(6) but
such remedy lies elsewhere and under differentprovisions of the Arbitration Act (Sections 12 and
13), the context in which the aforesaid view was
expressed cannot be lost sight of. In Antrix16,
appointment of the arbitrator, as per the ICC Rules,was as per the alternative procedure agreed upon,
whereas in Pricol Ltd. 17, the party which had filed
the application under Section 11(6) of the Arbitration
Act had already submitted to the jurisdiction of the
arbitrator. In the present case, the situation is
otherwise.
10. Unless the appointment of the arbitrator is ex
facie valid and such appointment satisfies the Court::: Downloaded on – 25/07/2025 21:20:49 :::CIS
31 2025:HHC:24169exercising jurisdiction under Section 11(6) of the
Arbitration Act, acceptance of such appointment as a.
fait accompli to debar the jurisdiction under Section
11(6) cannot be countenanced in law. In the present
case, the agreed upon procedure between the parties
contemplated the appointment of the arbitrator by
the second party within 30 days of receipt of a notice
from the first party. While the decision in Datar
Switchgears Ltd. 18 may have introduced some
flexibility in the time-frame agreed upon by the
parties by extending it till a point of time anterior to
the filing of the application under Section 11(6) of the
Arbitration Act, it cannot be lost sight of that in the
present case the appointment of Shri Justice A.D.
Mane is clearly contrary to the provisions of the
Rules governing the appointment of arbitrators by
ICADR, which the parties had agreed to abide by in
the matter of such appointment. The option given to
the respondent Corporation to go beyond the panel
submitted by ICADR and to appoint any person of its
choice was clearly not in the contemplation of the
parties. If that be so, obviously, the appointment of
Shri Justice A.D. Mane 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
Arbitration Act. It cannot, therefore, be held that the
present proceeding is not maintainable in law. The
appointment of Shri Justice A.D. Mane made beyond
30 days of the receipt of notice by the petitioner,
though may appear to be in conformity with the law
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32 2025:HHC:24169
laid down in Datar Switchgears Ltd. 18, is clearly
contrary to the agreed procedure which required the
.
appointment made by the respondent Corporation to
be from the panel submitted by ICADR. The said
appointment, therefore, is clearly invalid in law.”
27. It may be noted here that the aforesaid view of the
Designated Judge in Walter Bau AG¹ was pressed into
service on behalf of the appellant in TRF Ltd. and the
opinion expressed by the Designated Judge was found to
be in consonance with the binding authorities of this
Court. It was observed: (TRF case², SCC p. 397, paras 32-
33)
“32. Mr Sundaram, learned Senior Counsel for the
appellant has also drawn inspiration from the
judgment passed by the Designated Judge of this
Court in Walter Bau AG¹, where the learned Judge,
after referring to Antrix Corpn. Ltd. 16, distinguished
the same and also distinguished the authority in
Pricol Ltd. v. Johnson Controls Enterprise Ltd. 17
and came to hold that: (Walter Bau AG case¹, SCC p.
806, para 10)
“Unless the appointment of the arbitrator is ex
facie valid and such appointment satisfies the
Court exercising jurisdiction under Section
11(6) of the Arbitration Act, acceptance of such
appointment as a fait accompli to debar the
jurisdiction under Section 11(6) cannot be
countenanced in law….’
33. We may immediately state that the opinion
expressed in the aforesaid case is in consonance
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33 2025:HHC:24169
with the binding authorities we have referred to
hereinbefore.””
.
42. In Walter Bau AG, Legal Successor, of The Original
Contractor, Dyckerhoff and Widmann A.G. Vs. Municipal Corporation of
Greater Mumbai and another, (2015) 3 Supreme Court Cases 800,
Hon’ble Supreme Court has been pleased to hold as under:-
“9. While it is correct that in Antrix¹ and Pricol Ltd., it
was opined by this Court that after appointment of an
arbitrator is made, the remedy of the aggrieved party is
not under Section 11(6) but such remedy lies elsewhereand under different provisions of the Arbitration Act
(Sections 12 and 13), the context in which the aforesaid
view was expressed cannot be lost sight of. In Antrix¹,
appointment of the arbitrator, as per the ICC Rules, wasas per the alternative procedure agreed upon, whereas in
Pricol Ltd., the party which had filed the application
under Section 11(6) of the Arbitration Act had alreadysubmitted to the jurisdiction of the arbitrator. In the
present case, the situation is otherwise.
10. Unless the appointment of the arbitrator is ex facie
valid and such appointment satisfies the Court exercising
jurisdiction under Section 11(6) of the Arbitration Act,
acceptance of such appointment as a fait accompli to
debar the jurisdiction under Section 11(6) cannot be
countenanced in law. In the present case, the agreed upon
procedure between the parties contemplated the
appointment of the arbitrator by the second party within
30 days of receipt of a notice from the first party. While
the decision in Datar Switchgears Ltd. may have::: Downloaded on – 25/07/2025 21:20:49 :::CIS
34 2025:HHC:24169
introduced some flexibility in the time frame agreed upon
by the parties by extending it till a point of time anterior to
.
the filing of the application under Section 11(6) of the
Arbitration Act, it cannot be lost sight of that in the present
case the appointment of Shri Justice A.D. Mane is clearly
contrary to the provisions of the Rules governing the
appointment of arbitrators by ICADR, which the parties
had agreed to abide by in the matter of such appointment.
The option given to the respondent Corporation to go
beyond the panel submitted by ICADR and to appoint any
person of its choice was clearly not in the contemplation of
the parties. If that be so, obviously, the appointment of
Shri Justice A.D. Mane 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
Arbitration Act. It cannot, therefore, be held that the
present proceeding is not maintainable in law. The
appointment of Shri Justice A.D. Mane made beyond 30
days of the receipt of notice by the petitioner, though may
appear to be in conformity with the law laid down in
Datar Switchgears Ltd.³, is clearly contrary to the agreed
procedure which required the appointment made by the
respondent Corporation to be from the panel submitted by
ICADR. The said appointment, therefore, is clearly invalid
in law.”
43. In Datar Switchgears Ltd. Vs. Tata Finance Ltd. and
another, (2000) 8 Supreme Court Cases 151, Hon’ble Supreme Court
has been pleased to hold as under:-
“23. When parties have entered into a contract and settled
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35 2025:HHC:24169on a procedure, due importance has to be given to such
procedure. Even though rigor of the doctrine of “freedom of.
contract” has been whittled down by various labour and
social welfare legislation, still the court has to respect the
terms of the contract entered into by parties andendeavour to give importance and effect to it. When the
party has not disputed the arbitration clause, normally he
is bound by it and obliged to comply with the procedurelaid down under the said clause.”
44. In TRF Limited Vs. Energo Engineering Projects Limited,
(2017) 8 Supreme Court Cases 377, Hon’ble Supreme Court has been
pleased to hold as under:-
“23. In Newton Engg. and Chemicals Ltd. v. Indian Oil
Corpn. Ltd., a two-Judge Bench was dealing with anarbitration clause in the agreement that provided that all
disputes and differences between the parties shall be
referred by any aggrieved party to the contract to the solearbitration of ED (NR) of the respondent Corporation. The
arbitration clause further stipulated that if such ED (NR)
was unable or unwilling to act as the sole arbitrator, the
matter shall be referred to the sole arbitration of someother person designated by ED (NR) in his place who was
willing to act as sole arbitrator. It also provided that no
person other than ED (NR) or the person designated by ED
(NR) should act as an arbitrator. When the disputes arose
between the parties, the appellant therein wrote to the
Corporation for appointment of ED (NR) as the sole
arbitrator, as per the arbitration clause. The Corporation
informed the contractor that due to internal reorganisation::: Downloaded on – 25/07/2025 21:20:49 :::CIS
36 2025:HHC:24169in the Corporation, the office of ED (NR) had ceased to
exist and since the intention of the parties was to get the.
dispute settled through the arbitration, the Corporation
offered to the contractor the arbitration of the substituted
arbitrator, that is, the Director (Marketing). The
Corporation further informed the contractor that if he
agreed to the same, it may send a written confirmation
giving its consent to the substitution of the named
arbitrator. The contractor informed that he would like to
have the arbitration as per the provisions of the Act
whereby each of the parties would be appointing one
arbitrator each. The Corporation did not agree to the
suggestion given by the company and ultimately
appointed Director (Marketing) as the arbitrator. The
contractor, being aggrieved, moved the High Court of Delhi
for appointment of arbitrator under Section 11(6)(c) of the
Act and the learned Single Judge dismissed 13 the same
and observed that the challenge to the appointment of the
arbitrator may be raised by the contractor before the
Arbitral Tribunal itself. Interpreting the agreement, this
Court held: (Newton Engg. and Chemicals case 12, SCC p.
46, paras 7-8)
“7. Having regard to the express, clear and
unequivocal arbitration clause between the parties
that the disputes between them shall be referred to
the sole arbitration of ED (NR) of the Corporation
and, if ED (NR) was unable or unwilling to act as the
sole arbitrator, the matter shall be referred to the
person designated by such ED (NR) in his place who
was willing to act as sole arbitrator and, if none of
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37 2025:HHC:24169
them is able to act as an arbitrator, no other person
should act as arbitrator, the appointment of Director
.
(Marketing) or his nominee as a sole arbitrator by
the Corporation cannot be sustained. If the office of
ED (NR) ceased to exist in the Corporation and the
parties were unable to reach to any agreed solution,
the arbitration clause did not survive and has to be
treated as having worked its course. According to the
arbitration clause, sole arbitrator would be ED (NR)
or his nominee and no one else. In the
r circumstances, it was not open to either of the
parties to unilaterally appoint any arbitrator for
resolution of the disputes. Sections 11(6)(c), 13 and
15 of the 1996 Act have no application in the light of
the reasons indicated above.
8. In this view of the matter, the impugned order
dated 8-11-200613 has to be set aside and it is set
aside. The appointment of Respondent 3 as sole
arbitrator to adjudicate the disputes between the
parties is also set aside. The proceedings, if any,
carried out by the arbitrator are declared to be of no
legal consequence. It will be open to the contractor,
the appellant to pursue appropriate ordinary civil
proceedings for redressal of its grievance in
accordance with law.”
The aforesaid decision clearly lays down that it is not
open to either of the parties to unilaterally appoint an
arbitrator for resolution of the disputes in a situation that
had arisen in the said case.”
45. In Bharat Broadband Network Limited Vs. United
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38 2025:HHC:24169
Telecoms Limited, (2019) 5 Supreme Court Cases 755, Hon’ble
Supreme Court has been pleased to hold as under:-
.
“14. From a conspectus of the above decisions, it is clear
that Section 12(1), as substituted by the Arbitration and
Conciliation (Amendment) Act, 2015 [“the Amendment Act,2015”], makes it clear that when a person is approached
in connection with his possible appointment as an
arbitrator, it is his duty to disclose in writing anycircumstances which are likely to give rise to justifiable
doubts as to his independence or impartiality. The
disclosure is to be made in the form specified in the SixthSchedule, and the grounds stated in the Fifth Schedule
are to serve as a guide in determining whether
circumstances exist which give rise to justifiable doubts as
to the independence or impartiality 9 of an arbitrator.
Once this is done, the appointment of the arbitrator may
be challenged on the ground that justifiable doubts have
arisen under sub-section (3) of Section 12 subject to thecaveat entered by sub-section (4) of Section 12. The
challenge procedure is then set out in Section 13, together
with the time-limit laid down in Section 13(2). What is
important to note is that the Arbitral Tribunal must firstdecide on the said challenge, and if it is not successful,
the Tribunal shall continue the proceedings and make an
award. It is only post award that the party challenging
the appointment of an arbitrator may make an application
for setting aside such an award in accordance with
Section 34 of the Act.”
46. In Newton Engineering and Chemicals Limited Vs. Indian
Oil Corporation Limited and others, (2013) 4 Supreme Court Cases
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39 2025:HHC:24169
44, Hon’ble Supreme Court has been pleased to hold as under:-
“7. Having regard to the express, clear and unequivocal
.
arbitration clause between the parties that the disputes
between them shall be referred to the sole arbitration of
the ED (NR) of the Corporation and, if ED (NR) was unableor unwilling to act as the sole arbitrator, the matter shall
be referred to the person designated by such ED (NR) in
his place who was willing to act as sole arbitrator and, ifnone of them is able to act as an arbitrator, no other
person should act as arbitrator, the appointment of
Director (Marketing) or his nominee as a sole arbitrator bythe Corporation cannot be sustained. If the office of ED
(NR) ceased to exist in the Corporation and the parties
were unable to reach to any agreed solution, the
arbitration clause did not survive and has to be treated ashaving worked its course. According to the arbitration
clause, sole arbitrator would be ED (NR) or his nominee
and no one else. In the circumstances, it was not open toeither of the parties to unilaterally appoint any arbitrator
for resolution of the disputes. Sections 11(6)(c), 13 and 15
of the 1996 Act have no application in the light of the
reasons indicated above.
8. In this view of the matter, the impugned order dated
8-11-2006 has to be set aside and it is set aside. The
appointment of Respondent 3 as sole arbitrator to
adjudicate the disputes between the parties is also set
aside. The proceedings, if any, carried out by the
arbitrator are declared to be of no legal consequence. It
will be open to the contractor, the appellant to pursue
appropriate ordinary civil proceedings for redressal of its::: Downloaded on – 25/07/2025 21:20:49 :::CIS
40 2025:HHC:24169
grievance in accordance with law.”
47. None of the judgments cited by learned Senior Counsel
.
for the petitioners are of assistance to the petitioner, for the reason
that in none of the said cases the fact position was akin to that in
the present petitions. In none of the judgments cited on behalf of the
petitioner Hon’ble Supreme Court has been pleased to hold that after
the rejection of an application filed by a party under Section 11 (6) of
the Arbitration and Conciliation Act for appointment of an Arbitrator
and without raising a formal protest in terms of the provisions of
Section 13 (2) (3) of the Act, challenging the Arbitral Tribunal in the
mode an manner in which it should be challenged, such like party
can still assail the Award under Section 34 of the Arbitration and
Conciliation Act, on the ground that appointment of the Arbitrator
was bad more so when the party did not even choose to appear
before the learned Arbitrator after dismissal of its petitions under
Section 11(6) of the Arbitration and Conciliation Act by the High
Court.
48. On the other hand, in the judgment referred by learned
counsel for the respondent Hon’ble Supreme Court of India has been
pleased to hold in Haryana Tourism Limitd Vs. Kandhari Beverages
Limited, (2022) 3 Supreme Court Cases 237, Hon’ble Supreme Court
in Para-7 thereof has been pleased to hold on the question of
jurisdiction of the Arbitrator that once issue was raised and dealt
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41 2025:HHC:24169
with by the High Court and the objection of the party was overruled
by the High Court against which no Appeal was preferred by the
.
party, thereafter it was not open for the said party to challenge the
jurisdiction of the Arbitrator.
49. As already observed hereinabove, otherwise also,
nothing prevented the petitioner from appearing before the learned
Arbitrator in the arbitral proceedings after the rejection of its
petitions filed under Section 11 (6) of the Arbitration and
Conciliation Act and therein raising an objection with regard to the
validity of constitution of the Arbitral Tribunal. It is reiterated that in
the application which was filed by the petitioner before the learned
Arbitrator all that was mentioned was that as the petitioner was
filing applications under Section 11(6) of the Act, therefore, the
Arbitrator should await the outcome thereof.
50. Accordingly, in the light of the above discussion and
observations, as this Court does not finds any merit in these
petitions, the same are dismissed. Pending miscellaneous
application(s), if any also stand disposed of accordingly.
(Ajay Mohan Goel)
Judge
July 14, 2025
(Rishi)
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