Ntpc Limited vs. Aadhar Stumbh Township PVT LTD

Facts

NTPC Limited (Petitioner) filed a petition under Section 11(5) & (6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of a Presiding/Third Arbitrator. A Contract Agreement with an arbitration clause was signed between NTPC and Aadhar Stumbh Township Pvt Ltd (Respondent) on January 25, 2018. Disputes arose, leading the Respondent to initiate arbitration proceedings before a three-member Arbitral Tribunal. The Respondent later notified fresh claims, including claims related to GST, and requested to amend/add claims or appoint a nominee arbitrator. NTPC appointed its nominee arbitrator, but the Respondent stated that a three-member tribunal was already appointed and sought to refer the disputes to the same tribunal. The Respondent also appointed its nominee arbitrator.

Held

The Court held that the petition is allowed only with respect to the appointment of the Presiding Arbitrator. The Court reasoned that the arbitration mechanism was clearly spelt out in Clause 7.3 of the contract. Both parties had appointed their nominee arbitrators. The Respondent's attempt to have the new claims referred to the same Arbitral Tribunal, after appointing its nominee, was not permissible as it would amount to a substitution of arbitrators, which requires recourse to Sections 14 and 15 of the Arbitration and Conciliation Act, 1996. The Court emphasized party autonomy and noted that the Respondent could have amended its claims without the Petitioner's permission. The Court appointed Mr. Justice (Retd.) Vipin Sanghi as the Presiding Arbitrator to adjudicate the disputes, with the arbitration to be held under the aegis of the Delhi International Arbitration Centre. The Court clarified that all rights and contentions of the parties, including arbitrability and preliminary objections, were left open for adjudication by the Arbitral Tribunal. No adjudication on the merits of the claim was made.

Key Issues

1. Whether the Court has the power to appoint a Presiding Arbitrator when parties have already appointed their respective nominee arbitrators under the arbitration clause, and the respondent seeks to refer the dispute to an existing arbitral tribunal. Petitioner's Arguments: The Petitioner argued that the Respondent's request to refer the dispute to the same Arbitral Tribunal, after appointing its own nominee arbitrator, amounted to a substitution of arbitrators, which could only be done under Sections 14 and 15 of the Arbitration and Conciliation Act, 1996. The Petitioner contended that party autonomy is paramount, and the Respondent could not unilaterally seek to refer the matter to the existing tribunal after appointing its own nominee. Respondent's Arguments: The Respondent's arguments are not explicitly detailed in the provided text, but their actions suggest a desire to have the newly notified claims adjudicated by the existing Arbitral Tribunal, or at least to have a nominee arbitrator appointed in accordance with their request.