M/S. DURGA WELDING WORKS V. CHIEF ENGINEER, RAILWAY ELECTRIFICATION, ALLAHABAD AND ANOTHER
COURT: The Supreme Court of India
CORAM: Justice Ajay Rastogi, Justice Abhay S. Oka
DATE OF JUDGMENT: 04 January 2022
Brief facts of the case are that that the Appellant’s i.e., M/S. Durga Welding Works tender was accepted, and a contract agreement was established between the parties. Because there were unresolved claims, the appellant served a legal notice for the appointment of an Arbitrator and the settlement of claims. It was said that because the respondents neglected to appoint an arbitrator, an Arbitration Petition was filed in the High Court of Orissa seeking the appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996. However, shortly after submitting the arbitration petition, the appellant utterly forgot to take any action in furtherance thereof, and the respondents were never made aware of such petition being filed because no notice was issued at any time. Meanwhile, in response to the appellant’s letter, the respondents instructed the appellant to choose two names from a panel of four people. Immediately following that, a Miscellaneous Case was filed seeking an order restraining the respondents from appointing an Arbitrator, and that application, too, remained pending, and the appellant took no action to pursue either the Arbitration Petition or the Miscellaneous Case before the High Court. The appellant chose two officers from the panel proposed by the respondents, and the respondents formed an Arbitration Tribunal in response. Following that, the appellant went before the Arbitral Tribunal and filed an application claiming that the Tribunal was not nominated within the time limit, that the Arbitral Tribunal’s constitution is invalid, and that the Tribunal should not proceed with the arbitration procedures. However, the Tribunal continued with the arbitration processes, and because the appellant did not participate despite being given the option, an ex-parte award was issued. Finally, the High Court sent notifications to the respondents in 2016, over three years after the ex-parte award was issued.
Whether the High court of Orissa was justified in dismissing the arbitration petition in the present case?
The Supreme Court determined that after filing an arbitration petition in the High Court’s Registry on October 23, 2009, the appellant entirely slept on the matter and the respondents were never provided with any notice of the Arbitration Petition filed before the High Court of Orissa. When the respondents asked the appellant to suggest and select two names from a panel of four for the formation of the Arbitral Tribunal, the appellant chose two officers from the panel suggested by the respondents.
The Apex Court noted that, as a result, the respondents established the Arbitral Tribunal, and the appellant came before the Arbitral Tribunal and presented his statement of claim, and respondents presented their statement of defence. As a result, the High Court declined to use its jurisdiction under Section 11(6) of the Act to appoint an Arbitrator and dismissed the case, leaving the appellant free to file objections to the ex parte award, said the Supreme Court. As a result, the Top Court dismissed the petition and held that the High Court made no error in dismissing the petition filed under Section 11(6) of the Act for the appointment of an Arbitrator.