Holding

The Supreme Court, by consent of the parties, appointed Mr. Satish Chandar as sole arbitrator to adjudicate the disputes from the stage left by the erstwhile arbitrator, and allowed the parties to amend claims and submit further documents.

Summary

The appellant Klassic Construction entered into a construction contract with the Army Welfare Housing Organisation that contained an arbitration clause requiring disputes to be referred to a sole arbitrator appointed by the Chairman. After an earlier arbitrator could not complete the proceedings, the Supreme Court directed the respondent to submit a panel of three names. The respondent complied, listing three senior officers, and the Court allowed the appellant to select one. The appellant chose Mr. Satish Chandar, whom the respondent did not object to, and the Court, by consent of both parties, appointed him as the sole arbitrator to continue the arbitration from the point where it had stalled. The Court further permitted the parties to amend their claims and file additional documents, and directed the arbitrator to complete the arbitration within six months. The appeal was consequently disposed of.

Issues considered

Whether the Supreme Court can appoint a sole arbitrator under the arbitration clause of the contract.
Whether the appointed arbitrator can adjudicate the dispute from the stage left by the erstwhile arbitrator.
Whether the parties may amend their claims and file additional documents before the newly appointed arbitrator.

Legislation cited

Society Registration Acts. 1860

Subjects

arbitrationappointment of arbitratorconstruction contractarbitration clauseSupreme Court ordercontinuation of arbitrationamendment of claims

Judgment

~ _J
I '~
MIS. KLASSIC CONSTRUCTION (PVT.) LTD. A
v.
MIS. ARMY WELFARE HOUSING ORGANISATION

MAY 25, 2006

[DR. AR. LAKSHMANAN AND LOKESHWAR SINGH PANTA, JJ.] B

Arbitration :

Appointment of arbitrator-Adjudication of dispute from the stage left
by earlier arbitrator-Construction contract-Arbitration clause providing for C
reference of dispute to sole arbitrator to be appointed by Chairman, Army
Welfare Housing Organisation-In appeal before Supreme Court, on Court's
direction Housing Organisation submitted a panel of three names-With consent
of parties Court appointing one of them as sole arbitrator-Parties at liberty
to amend their claims and counter claims and file additional documents before D
sole arbitrator who shall adjudicate the dispute from the stage left by erstwhile
sole arbitrator and pass a speaking award and submit the same to this Court.

CIVIL APPEL LA TE JURISDICTION : Civil Appeal Nos. 5352 of 2002.

From the Judgment and Order dated 2.8.2001 of the High Court of E
Delhi at New Delhi in FAO(OS) No. 32812001.

P.N. Kumar, Anurag Kumar and Rishi Kesh for the Appellant.

Arvind Kumar Tewari for the Respondent.

The following Order of the Court was delivered : F

ORDER

Heard Mr. P.N. Kumar, learned counsel for the appellant and Mr. Arvind
Kumar Tewari, learned counsel for the respondent. The appellant before us
is a contractor. The respondent is the Army Welfare Housing Organisation G
represented by its Chairman/Managing Director.

Both the appellant and respondent entered into an agreement on 8.5.1990
by which the contract was awarded to the appellant for executing certain
H
2 SUPREME COURT REPORTS (2006] SUPP. 3 S.C.R.

A construction works. Clause 131 of the contract deals with the arbitration ;
which reads as under:

" l 3 l. 1f any dispute arises and persists between the contractor
and Employer, the same shall be referred to the Sole Arbitrator to be
appointed by the Chairman, Army Welfare Housing Organisation,
B whose award shall be final and binding on both parties. The Arbitrator
shall submit his award within four months of his entering on the
reference. This period may be extended by the Arbitrator with the
consent of both the parties."

On l 7.5.2006, after hearing both the parties, we passed a detailed order
C directing the Army Welfare Housing Organisation to submit a Panel of three
names to this Court with a copy to the learned counsel for appellant in the
form of an affidavit. Pursuant to the said directions, an affidavit dated
22.5.2006 on behalf of respondent has been filed before us. A copy of the
said affidavit has also been served on the counsel for the appellant. The
D affidavit reads thus:
"An affidavit on behalf of the Respondent of the compliance of orders/
directions dated 17.05.2006 of this Hon'ble Court.

I, Col. A.K. Opal, Secretary Army Welfare Housing Organisation, a
society registered under the Society Registration Act XX! of 1860
E having it's registered office at South Hutments, Kashmir House, Rajaji
Marg, New Delhi 110011 do hereby solemnly affirm on oath and
state as follows:

That I am the secretary of the respondent society in the aforesaid
case. I am conversant with the facts and circumstances of the case,
F
as such competent to affirm this affidavit.
1. I say that after hearing the counsels of the parties in the aforesaid
case this Hon'ble Court vide it's order dated 17.05.2006 was
pleased to direct the Ex-Officio Chairman of the Army Welfare
Housing Organisation/respondent herein, to nominate a panel of
G
three names out of which this Hon'ble Court may appoint one
such nominee as a sole arbitrator to adjudicate the disputes
between the parties herein.
2. I say that in compliance to the order(s) I direction(s) dated
I 7.05.2006 of this Hon'ble Court, Ex-Officio Chairman of the
H
KLASSIC CONSTRUCTION (PVT.) LTD. v. ARMY WELFARE HOUSING ORGANISATION 3
Army Welfare Housing Organisation I respondent herein, has A
been pleased to comply with the directions of this Hon'ble Court
and has nominated a panel of the following three engineer officers:

a. Brig. Anil Wasan, age 53 years, Deputy Director General (Navy &
Defence Production), Officer shall superannuate from present
appointment on. 31 July 2008. B
b. Brig AK Jairath, age 52 years, Deputy Director General (Policy
Planning and Coordination ). As a sole arbitrator has adjudicated 06
cases. Tenure of the officer in the present appointment is till November
2008. Officer superannuates in 2011.

c. Mr. Satish Chandar, age 49 years, Joint Director General (Contracts).
c
Officer's tenure in present appointment is till Aug 2009. Officer
superannuation in January 2017. As a sole arbitrator has adjudicated
40 cases.

3. I say that none of the aforesaid three officers are in any way D
involved in the management of the respondent herein.
In the premise, it is most respectfully prayed that this Hon'ble
Court be pleased to:
a. Order/direct one of the aforesaid three named officers as a sole
arbitrator to adjudicate the disputes between the parties herein E
and publish a speaking 1ward;
b. Order/direct the sole arbitrator to adjudicate the disputes between
the parties herein from the stage from where the erstwhile sole
arbitrator(s) could not proceed with the adjudication of the
disputes between the parties pursuant to the orders dated F
25.01.2002 of this Hon'ble Court;
c. Order/direct the parties to amend their respective claims and
counter claims, if they so desire, as already filed before the
erstwhile sole arbitrator(s);
d. Any other order(s)/direction(s) in the circumstances of the case G
as may be deemed fit and appropriate by this Hon'ble Court."

We gave option to the counsel for the appellant to select one name
among the three from the panel. L_eamed counsel for the appellant suggests
the name of Mr. Satish Chandar, who is now working as Joint Director H
4 SUPREME COURT REPORTS [2006] SUPP. 3 S.C.R.

A General (Contracts) as the sole Arbitrator. Learned counsel for the respondent
has no objection in nominating Mr. Satish Chandar as the sole Arbitrator.
Accordingly, we, by consent of both the parties, nominate Mr. Satish Chandar
as the sole Arbitrator. The parties will inform Mr. Satish Chandar that he has
been appointed as a sole Arbitrator to adjudicate upon the disputes between
B the parties. Both parties are at liberty to file any additional documents before
the said sole Arbitrator. The sole Arbitrator shall adjudicate the disputes
between the parties and pass a speaking award. The sole Arbitrator shall
adjudicate the disputes between the parties from the stage from where the
erstwhile sole Arbitrator could not proceed with the adjudication of disputes
between the parties pursuant to the order, passed by this Court on 25.1.2002.
C Parties are at liberty to amend their respective claims and counter-claims, if
they so desire. The parties are at liberty to approach the sole Arbitrator for
any further direction. The sole Arbitrator is directed to complete the arbitration
proceedings within six months from the date of entering upon the reference.

The sole Arbitrator shall enter upon the reference on or before 15.6.2006.
D Additional documents, if any, shall be filed within four weeks from the date
of entering upon the reference. The Civil Appeal is disposed of accordingly.
A copy of this order shall also be forwarded to the sole Arbitrator Mr. Satish
Chandar c/o Engineering in Chief Branch, Army Welfare Housing
Organisation, South Hutments, Kashmir House, Rajaji Marg, New Delhi
E 110011.

The interim order passed by this Court stands vacated. The sole Arbitrator
shall submit his award to this Court.

R.P. Appeal disposed of.