Rcc Developers vs. Northern Railways

Facts

The petitioner, RCC Developers, filed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking the appointment of a Sole Arbitrator to resolve disputes with Northern Railways. Disputes had previously arisen, leading to the appointment of Mr. Justice A.K. Pathak (Retd.) as Sole Arbitrator for claims up to May 31, 2022. Following this, the petitioner continued to provide services as requested by the respondent and completed the work. However, the respondent allegedly failed to release pending payments, take over the work, record completion, issue a completion certificate, and make payments for price variation, contract prolongation, and extra GST. Consequently, the petitioner issued a second demand notice on March 5, 2024, for arbitration of these subsequent disputes, to which the respondent neither responded nor made payments.

Held

The Court held that Mr. A.K. Pathak (Retd.), who was already appointed as the Sole Arbitrator for disputes arising prior to May 31, 2022, would also be appointed as the Sole Arbitrator for the disputes that have arisen thereafter under the same contract. The reasoning was that since an arbitrator was already seized of disputes under the contract, it was logical and efficient to have the same arbitrator adjudicate subsequent disputes under the same agreement. The Court directed that the parties could raise their respective objections before the Arbitrator. The fees of the Arbitrator would be fixed as per the Fourth Schedule of the Act, 1996, or as consented by the parties, subject to the Arbitrator making necessary disclosures under Section 12(1) and not being ineligible under Section 12(5). The arbitration would be conducted under the aegis of the Delhi International Arbitration Centre. The parties were directed to contact the Arbitrator within one week of receiving the order.

Key Issues

1. Whether a new Sole Arbitrator should be appointed to adjudicate disputes arising after May 31, 2022, under Section 11(6) of the Arbitration and Conciliation Act, 1996, given that a Sole Arbitrator was already appointed for earlier disputes under the same contract. Petitioner's Arguments: The petitioner contended that new disputes had arisen after May 31, 2022, concerning pending payments, completion certificates, and other contractual obligations, necessitating a fresh arbitration. They argued that the previous arbitration was limited to claims up to a specific date and did not cover these subsequent issues. The petitioner relied on the principle that each set of disputes arising under a contract can be subject to arbitration if the contract permits. Respondent's Arguments: The respondent did not dispute the existence of an arbitration clause. Their primary contention, implied by their non-response to the demand notice and the court's eventual decision, was likely that the existing arbitration mechanism could encompass all disputes, or they may have argued against the necessity of a new appointment. However, the judgment does not explicitly record detailed arguments from the respondent regarding the appointment of a new arbitrator for subsequent disputes.