IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA

CWP No. 2322 of 2016 with

CWP No. 2371 of 2016

Reserved on: March 29, 2017

Decided on: April 12, 2017

.

1. CWP No. 2322 of 2016

M/s P K Construction Co and another ….Petitioner P s

Versus .

The Shimla Municipal Corporation and others .Re H spondents

2. CWP No. 2371 of 2016

M/s ESS & ESS Joint Venture and ano o ther f….Petitioners Versus

The Shimla Municipal Corpor r atio t n and others .Respondents Coram

Hon'ble Mr. Justice Man o soor u Ahmad Mir, Chief Justice Hon'ble Mr. Justice Sandeep Sharma, Judge Whether approved for reporting? Yes. For the petitione rs C : Mr. Bharat Thakur, Advocate (in both the petitions).

For the res h pondents : Mr. Hamender Chandel, Advocate, for g

respondent No.1 (in both the petitions). i

Mr. Shrawan Dogra, Advocate General with Mr. Anup Rattan and Mr. Romesh Verma, H

Additional Advocate Generals and Mr. J.K. Verma, Deputy Advocate General, for the respondent-State (in both the petitions). Per Sandeep Sharma, Judge Since common questions of law and facts are involved, both the petitions were clubbed and are being disposed of by this

common judgment.

2. The writ petitions, though, have been filed by different entities but arise out of same and similar dispute and same reliefs

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have been sought. The main reliefs, common in both the petitions, are reproduced below:

"1. Record may be called for from respondent No 3.

2. The petition be kindly heard finally & decided in the light of Section 28(3) read with S 29B(3) of the .

Arbitration & Conciliation Act, the Ground para & the statement of claim including subsequent MAs on record. P

3. Exemplary/compensatory cost may be awa H rded to . the petitioners qua respondent No.1. 4. Interest may be kindly allowed in ter ms of Section 31(7) of the Arbitration & Conciliation Act."

3. Since dispute in both the petitions is sa f me and similar, for the sake of brevity, facts of CWP No. 23 o 22 of 2016 are being discussed. t

4. Respondents, i.e. Depar r tment of Urban Development and H.P. Infrastructure Deve u lopment Board (in short, 'HPIDB') invited Expression of In o terest (in short, 'EOI') from interested national/international independent legal entities/ joint ventures/ consortia for co nst C ruction, operation/maintenance and running of

parking co h mplexes in Shimla city under Public Private Partnership mode g (in s ort, 'PPP mode') vide Annexure P-1. Procedure was also lai i d down for submission of EOI therein. Petitioners in CWP No.

H 2322 of 2016 and CWP No. 2371 of 2016 submitted EOI for construction of parking complexes at Chotta Shimla and near Lift, respectively, as is evident from Annexure P-2 (in both the petitions). The EOI was accepted in both the cases, vide Annexure P-2 itself.

Petitioners were required to pay Annual Concession Fee and further

were asked to pay Development Fee and Construction Performance

Security. Petitioners have also annexed abstract copy of Request for

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Proposal (in short, 'RFP')/agreement. Art 4, 'Conditions Precedent', whereof provides that, "Subject to the express terms to the contrary, limited aspects of the Construction Period (when commenced) and any legitimate rights arising in law, the rights and obligations under .

this Concession Agreement shall take effect only upon fulfillment P of all the Conditions Precedent set out in Articles 4.1 and H 4.2 o.n or before the expiry of a period of 90 (ninety) days from the Proposal Acceptance Date. However, the Concessioning Auth f orit y may at any

time at its discretion and in writing, waive fu o lly or partially any of

the Conditions Precedent of the Concessiona ire."

5. In case of dispute, Ar r t 2t7.3 of RFP, provides for arbitration or adjudication, wh u ich reads as under: "27.3 Arbitrati o on or Adjudication a. In the event that the parties are unable to resolve the Dispute C through Direct Discussion under Article 27.2, the parti es shall submit the Dispute for arbitration in accordance with the Arbitration & Conciliation Act, 1996. The arbitration proceedings shall be conducted by the "Secretary, Law, h GoHP" as the Sole Arbitrator (the "Sole Arbitrator"). b. The Sole Arbitrator shall make a reasoned award and g

any award made pursuant to this Article 27.3 shall be final and binding on the Parties as from the date on which it is i

made and the Concessionaire and the Concessioning Authority agree to undertake to carry out the award without delay. H

d. The cost incurred on the process of Arbitration including inter alia the fees of the arbitral tribunal and the cost of the proceedings shall be borne by the Parties in equal proportions. Each Party shall bear its own legal fees incurred as a result of any Dispute under this Article 27." 6. Sanction for the construction of parking complex was accorded by respondent No.1, vide Annexure P-4, dated 9.12.2011,

on various conditions, one of which was that the petitioners shall

dump the debris with the permission of respondent No.1.

Respondent No.1 also issued compliance certificate indicating

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fulfillment of conditions by the Concessioning Authority and Concessionaire. On 26.9.2014, issue regarding completion of parking complexes at various places, including one near Lift and another at Chhota Shimla was also taken up in a meeting under .

the chairmanship of Hon'ble the Chief Minister, wherein petitioner P s aired the problems being faced by them regarding handing ove.r of site. On 7.10.2014, petitioners submitted draw f ing s H of revised proposals. Vide Annexure P-8 dated 28.10.2014, Er. Amar Singh Chauhan (Independent Engineer) was ask o ed to examine the proposal, who submitted his recommendations on 29.10.2014. Vide Annexure P-10, letter dated 5.3.201 r 5, trespondent No.1 intimated

the petitioners that the construction period was over and

petitioners were asked to o makeu the parking operational. Thereafter, petitioners were a C sked t complete the construction work as per approved drawings and provisions of Concession Agreement dated 11.5.2015 h . g 7. On receipt of above communication, the petitioners inv i oked dispute redressal process, by sending legal notices to H respondent No.1 by alleging misrepresentation, fraud, undue influence, coercion and mistake of law etc. Petitioners raised issues regarding undue charge of fees, revision of project etc. and demanded that construction period be not deemed to have

commenced as yet and other various issues were raised.

8. On receipt of notice from the petitioners, respondent No.1, referred the dispute to the Sole Arbitrator i.e. respondent

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No.3 and requested him to conduct proceedings as per Article 27.3 of the Concession Agreement dated 15.7.2015. Petitioners filed petition before the Arbitrator, to which reply was filed by respondent No. 1. Petitioners filed rejoinder to the same. Petitioners .

also filed miscellaneous application for completing the arbitratio P n process within specified time schedule. .

9. The petitioners approached this Court b H y way of present petitions, which were clubbed together f a nd listed on various dates, for ascertaining the maintai na o bility of the same and jurisdiction of this Court. Keeping i r n vi t ew the reliefs prayed for in the present petition, learned counsel representing the petitioners was repeatedly asked to justify the maintainability as well as

jurisdiction of this Court. At thue very outset, it may be noticed that

since this Court w C as primoa facie of the view that present petitions are not maintai nable, in their present form, suggestion was made to the learned counsel representing the petitioners that in case petiti g oners h agree, direction can be issued to the learned Arbitrator to i conclude the arbitration proceedings within a stipulated time. H However, the fact remains that the learned counsel representing the petitioners remained adamant on getting the matter decided on merits and insisted that the controversy at hand may be decided by this Court, on the basis of material already adduced on record by

the respective parties before the Arbitrator, while exercising powers

under Articles 226 and 227 of the Constitution of India. Apart from

making oral submissions, which would be referred to herein below,

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petitioners also filed written arguments as well as response to the query of this Court, on the point of jurisdiction. But a bare perusal of written submissions, which have been taken on record, suggests that these are mere repetitions of oral submissions having been .

made by the learned counsel representing the petitioners. P

10. The petitioners filed written submissions H reitera.ting that the matter be adjudicated by this Court, as arbitration proceedings have become infructuous since the f sa me were not

conducted by the sole Arbitrator within sti o pulated time, despite

request of the petitioners. Learn r ed t co unsel representing the petitioners, prays that the matter be decided on 'as-is-where-is' stage, since they have lost faith u in the Sole Arbitrator.

11. Learned coun o sel representing petitioners vehemently argued that respondent No.3, i.e. Arbitrator has failed to make final awards pursua nt C to the references made to him, arbitration proceeding h s stand automatically terminated in terms of Section 29B( g 4) of the Arbitration & Conciliation Act, 1996 (hereafter, 'Act') an i d as such same is required to be decided by this Court in light of H Section 28(3) read with Section 29B (3) of the Act. 12. Learned counsel for the petitioners further contended that since pleadings as well as evidence in support thereof were submitted in due course of time, respondent No.3 i.e. Arbitrator

was required to make the requisite award within the period as

provided under Section 29A. As per the petitioners, reference was

made to the Arbitrator on 15.7.2015 and as such he was required

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to pass award on or before the expiry of twelve months i.e. 20.7.2016. Learned counsel for the petitioners specifically invited the attention of this Court to the communication dated 10.6.2015, whereby petitioners, in terms of Article 27 of the Agreement inter se .

parties, invoked dispute resolution process. Learned counsel for . th P e petitioners further contended that vide Annexure H P-13, i.e. communication dated 15.7.2015, Municipal Commissioner, Shimla, who happened to be second party, in terms of agr f eem ent inter se

parties, sent a communication to Secr o etary (Law) to the

Government of Himachal Pradesh, r who t is the named Arbitrator in the agreement as per Article 27.3 of the Agreement, to conduct

arbitration proceedings. W u hile referring to the aforesaid communication dated 15 o .7.2015, learned counsel representing the petitioners, stated C that the Arbitrator is deemed to have entered upon reference o n 15.7.2015, because, as per explanation provided under Sec h tion 29A of the Act, Arbitral Tribunal shall be deemed to have g entered upon reference on the date, on which Arbitrator rec i eived notice, in writing, of his appointment. Learned counsel for H the petitioners also invited attention of this Court to various documents annexed with the petition to demonstrate that the pleadings were filed within stipulated time, but, despite that, no steps, whatsoever, were taken by the learned Arbitrator to pass

award within stipulated period, as such, mandate of the Arbitrator

stands terminated, because, admittedly, at no point of time, time

was either extended as provided under Section 29A (3) of the Act,

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with the consent of the parties, or, thereafter, by a Court, in terms of Section 29A (4) of the Act. To substantiate aforesaid argument, with regard to repeated requests for completion of arbitration proceedings, on or before the stipulated period i.e. 20.7.2016, .

attention was invited to Annexure P-21 i.e. Misc. Application havin P g been moved by the petitioners praying therein that the H arbitra.tion proceedings may be concluded within specified time schedule. However, it is another matter that the respo f nde nt-Municipal

Corporation, while filing reply to the aforesaid o application, disputed

that undue delay is being caused by r th t e A rbitrator in dealing with the matter and claimed that procedure is going on as per law. In the aforesaid background, le u arned counsel for the petitioners submitted that since Ar o bitrator has failed to pass award within stipulated period as prescribed under Section 29A of the Act, instant matter i s C required to be decided by this Court exercising powers un h der Articles 226 and 227 of the Constitution of India, in light g of the provisions contained in Section 28(3) read with Section 29 i B(3) of the Act, because statement of claim as well as reply H /counter claim filed by the opposite party including Misc. Application, moved before Arbitrator from time to time, are on record. While concluding his arguments, learned counsel representing the petitioners, stated that the High Court's power to

issue prerogative writs of certiorari, mandamus or prohibition to

any person, authority or quasi judicial tribunal under Article 226

falls under its original jurisdiction, whereas power under Article

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227 is both, administrative and of judicial superintendence over all subordinate courts and tribunals, and as such powers under Articles 226 and 227 are discretionary, equitable and are required to be exercised in larger interests of justice. He further contended .

that the very purpose of empowering High Courts with powe P rs under Articles 226 and 227, is to advance justice and to up.root injustice, rather than thwarting justice itself and no man H should be subjected to injustice by violation of law. Learned f co unsel for the petitioners further contended that under Ar o ticle 226, High Court can take cognizance of entire facts r an t d circumstances and may pass appropriate orders to do complete and substantial justice to promote equity, honesty and fa u ir play, because, as per the law laid down by the Apex Co o urt, High Court must interfere where subordinate tribu C nal r authority or officer acts without jurisdiction, act s in excess of jurisdiction, violates natural justice, refuses to exercise jurisdiction as vested by law, where there is error g appa h rent on the face of record, or where such act, omission, err i or or excess has resulted in manifest injustice. While seeking H adjudication of claim, which was originally filed before the Arbitrator, learned counsel representing the petitioners submitted that Sections 11 and 15 of the Act are not applicable in as much as neither the appointment nor substitution of Arbitrator is involved,

rather it is a simple case of deemed termination of mandate of the

Arbitrator by application of Section 29A of the Act and as such,

petitioners are entitled to invoke Constitutional remedy, because,

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petitioners' fundamental right under Articles 14, 19(g) and right of tangible/intangible property under Article 300A is violated by respondents No. 1 and 2, and respondent No.3 has failed/ refused to make arbitral award. In support of his aforesaid contention P , .learned counsel representing the petitioners placed reliance upon following case law: .

1. (1996) 5 SCC 54 Shangrila Food Prod f ucts Ltd. v. LIC 2. (2001) 8 SCC 97, Estralla Rubber v. Dass HEstate (P) Ltd. 3. (2002) 1 SCC 100, Roshan Deen v. Preeti Lal

4. (2008) 14 SCC 58, Ramesh o Chandra Sankla v. Vikram Cement

5. (2010) 8 SCC 329, Shali ni Shyam Shetty v. Rajendra Shankar Patil

6. (2015) 5 SCC 423, Radh r ey tShyam v. Chhabi Nath 7. (2003) 2 SCC 107, Harbanslal Sahnia v. Indian Oil Corpn. Ltd.

8. (2011) 5 SCC 697, Union of India v. Tantia Construction o (P) Lutd. 13. Mr. Ha C mender Chandel, learned counsel representing respondent No . 1 (Municipal Corporation), refuted aforesaid contentions having been made by the learned counsel representing the g petitio h ners and stated that present petitions are wholly mi i sconceived and deserve to be rejected. Mr. Chandel, further H contended that instant petitions are sheer abuse of process of law by the petitioners, because, by filing the instant petitions, they are trying to get out of the arbitration proceedings, which are still in progress. Mr. Chandel, further contended that if, for the sake of

arguments, contentions, with regard to automatic termination of

award, in terms of Section 29A of the Act, as projected by the

learned counsel representing the petitioners, are accepted, even

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then, present petitions are not maintainable, because, this Court can not be asked to decide claims and counter-claims, having been filed by the respective parties in arbitration proceedings. Mr. Chandel, further contended that the only fall-out of the non-

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compliance of Section 29A, wherein time frame has been fi . xe P d, would be termination of mandate of Arbitrator bu H t, in that eventuality, remedy available to the petitioners is to approach appropriate court of law under Sections 11 and 15 f of the Act, and

not this Court under Articles 226 and 22 7 o of the Constitution of India. Mr. Chandel, while concluding his arguments also stated

that in no eventuality, dispute i r ntert se parties, pursuant to

Concession Agreement, can be resolved /adjudicated by this Court,

while exercising powers o unduer Articles 226 and 227 of the Constitution of I C ndia and law cited by the learned counsel representing th e petitioners, is not applicable to the present petitions, a h s such, same deserve to be dismissed. In support of his afore g said claim, he also placed reliance upon judgments passed by Ap i ex Court in Shailesh Dhairyawan v. Mohan Balkrishna Lulla H reported in (2016) 3 SCC 619 and in Huawei Technologies Co. Ltd. v. Sterlite Technologies Ltd. reported in (2016) 1 SCC 721. 14. We have heard the learned counsel representing the parties and gone through the record.

15. Perusal of the documents available on record certainly suggests that pursuant to dispute between the parties, matter was referred to the Arbitral Tribunal (Secretary Law to the Government

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of H.P.), in terms of Article 27.3 of the Agreement inter se parties, on 15.7.2015. Similarly, perusal of agreement placed on record, suggests that as per Article 27.1 of the Agreement, any dispute/difference or controversy of whatever nature regarding the .

validity, interpretation, implementation of rights and obligation P s arising out of, or in relation or howsoever under or in relatio.n to Concession Agreement between the parties, shall be H subject to dispute resolution procedure, as provided un f der Article 27. Similarly, Article 27.3.a suggests that, if p o arties are unable to resolve the dispute, through direct discus sion as provided under Article 27.2, they shall submit r ditspute for arbitration, in accordance with Arbitration & u Conciliation Act, 1996, before the Sole Arbitrator i.e. Secre o tary Law, Government of H.P. It would be profitable to reprod C uce af resaid Article: "27.1 Disp ute Resolution h Any dispute, difference or controversy of whatever nature regarding the validity, interpretation, implementation or the rights and obligations arising out of, or in relation to, or g

howsoever arising under or in relation to this Concession i

Agreement between the parties, and so notified by either Party to the other Party (the "Dispute") shall be subject to the dispute resolution procedure set out in Article 27. It is H

specially clarified that in case of any ambiguity regarding the Works, the practices existing at the time of submission of proposal as per Good Industry Practice would prevail. "27.3 Arbitration or Adjudication a. In the event that the parties are unable to resolve the Dispute through Direct Discussion under Article 27.2, the parties shall submit the Dispute for arbitration in accordance with the Arbitration & Conciliation Act, 1996. The arbitration

proceedings shall be conducted by the "Secretary, Law,

GoHP" as the Sole Arbitrator (the "Sole Arbitrator")."

16. Bare perusal of dispute resolution process as provided under Article 27, clearly suggests that dispute, if any, between the

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parties, is to be decided by the Sole Arbitrator namely Secretary Law, but, admittedly, this Court sees no provision/Rule providing therein for filling up the vacancy, if any, caused due to recusal by the Arbitrator or due to termination of mandate of the Arbitrator .

before passing of final award. Perusal of communication date P d 15.7.2015 clearly suggests that respondent No.1 (Munic.ipal Corporation), on the request having been made by the p H etitioners, referred the matter to the Sole Arbitrator for a f rbit ration under Article 27.3 of the Agreement and requested h o im to fix suitable date and venue to conduct arbitration pr r ocee t dings. At this stage, it may be relevant to reproduce Section 29A of the Arbitration & Conciliation Act, 1996:

"29A. Time Limit o for arbuitral award.-- (1) The award shall be made within a period of twelve months from the date the arbitral tribunal enters upon the reference. Expla nat C ion.—For the purpose of this sub-section, an arbitral tribunal shall be deemed to have entered upon the reference on the date on which h the arbitrator or all the arbitrators, as the case may be, have received notice, in writing, of their appointment. g

(2) If the award is made within a period of six months from the date the i

arbitral tribunal enters upon the reference, the arbitral tribunal shall be entitled to receive such amount of additional fees as the parties may agree. H

(3) The parties may, by consent, extend the period specified in sub-section (1) for making award for a further period not exceeding six months. (4) If the award is not made within the period specified in sub-section (1) or the extended period specified under sub-section (3), the mandate of the arbitrator(s) shall terminate unless the Court has, either prior to or after the expiry of the period so specified, extended the period:

Provided that while extending the period under this sub-section, if the

Court finds that the proceedings have been delayed for the reasons

attributable to the arbitral tribunal, then, it may order reduction of fees of

arbitrator(s) by not exceeding five per cent. for each month of such delay.

(5) The extension of period referred to in sub-section (4) may be on the application of any of the parties and may be granted only for sufficient cause and on such terms and conditions as may be imposed by the Court.

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(6) While extending the period referred to in sub-section (4), it shall be open to the Court to substitute one or all of the arbitrators and if one or all of the arbitrators are substituted, the arbitral proceedings shall continue from the stage already reached and on the basis of the evidence and material already on record, and the arbitrator(s) appointed under this section shall be deemed to have received the said evidence and material.

(7) In the event of arbitrator(s) being appointed under this section, t P he .arbitral tribunal thus reconstituted shall be deemed to be in continuation of the previously appointed arbitral tribunal.

(8) It shall be open to the Court to impose actual or exemplary costs . upon any of the parties under this section.

(9) An application filed under sub-section (5) shall be d isp H osed of by the Court as expeditiously as possible and endeavour shall be made to dispose of the matter within a period of sixty days o from t f he date of service of notice on the opposite party." 17. Perusal of explanation to Sec t tio n 29 A suggests that the arbitral tribunal would be deemed t r o have entered upon reference, on the date, on which arbitrat u or or all the arbitrators, as the case may be, receive notice, o in writing, of their appointment. Hence, after perusal of communication dated 15.7.2015, it can be inferred that the Sole Ar bit C rator, in the instant case, entered upon reference on 15.7.20 h 15, and as such, he was required to pass Award within stipu g lated period i.e. twelve months, as prescribed under Section 29 i A. However, it is another matter that time, as referred above, H could be enlarged, either with the consent of the parties, or with the intervention of the Court, on the request of respective parties. But, in the instant case, there is nothing on record, suggestive of the fact that aforesaid time was ever extended, either with the consent of the parties in terms of Section 29A(3) or by a court of

law under Section 29A(4) or Section 29A(5) of the Act.

18. Before adverting to the claim of the petitioners, with regard to determination of their claim by this Court invoking

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powers under Articles 226 and 227 of the Constitution of India, it may be noticed that aforesaid Sections 29A and 29B of the Act were inserted by Arbitration & Conciliation (Amendment) Act, 2015 (hereafter, 'amending Act, 2015'), which admittedly came into .

operation on 23.10.2015. It would be profitable to refer to Sect . ion P s 1 and 2 of the amending Act, 2015:

"THE ARBITRATION AND CONCILIATION (AMENDMENT) ACT, 2015

NO. 3 OF 2016 H

[31st December, 2015.] An Act to amend the Arbitration and Conciliation f Act, 1996. BE it enacted by Parliament in the Sixty-sixth Year of the Republic of India as follows:—

1. Short title and commencement. -- t (1) Th o is Act may be called the Arbitration and Conciliation (Amendment) Act, 20 15. (2) It shall be deemed to have come into f r orce on the 23rd October, 2015. 2. Amendment of Section 2.--In the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the prin u cipal Act), in section 2,— (I) in sub-section (1),— (A) for c o lause (e), the following clause shall be substituted, namely:— '(e) "Court" means— C

(i) in the case of an arbitration other than international commercial arbitration, the principal Civil Court of original Short title and commencement. jurisdiction in a district, and h

includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of g

the arbitration if the same had been the subject- i

matter of a suit, but does not include any Civil Court of a grade inferior to such principal Civil Court, or any Court of Small Causes; H

(ii) in the case of international commercial arbitration, the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, and in other cases, a High Court having jurisdiction to hear appeals from decrees of courts subordinate to that High

Court;';

(B) in clause (f), in sub-clause (iii), the words "a company or" shall be omitted;

(II) in sub-section (2), the following proviso shall be inserted, namely:—

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"Provided that subject to an agreement to the contrary, the provisions of sections 9, 27 and clause (a) of sub-section (1) and sub-section (3) of section 37 shall also apply to international commercial arbitration, even if the place of arbitration is outside India, and an arbitral award made or to be made in such place is enforceable and recognised under the provisions of Part II of this Act.""

.

19. If, claim with regard to automatic termination P of mandate of Arbitrator, as is being projected by the learned cou . nsel representing the petitioners, is examined and analy H zed, it is revealed that reference to the Arbitrator was made o f n 1 5.7.2015 i.e. admittedly before the date of coming into operation newly inserted Sections 29A and 29B, wherein, for the fir st o time, stipulation with

regard to passing of award within s t tipulated time was made.

Section 1 (2) of the amending A u ct, 20r15, specifically provides that it shall be deemed to have o come into force on 23.10.2015, meaning thereby that provisions as contained under Sections 29A and 29B would come int o o C peration only after 23.10.2015 and time frame, as prescrib h ed in the aforesaid Sections, would not be applicable to a cas g e, where reference was made prior to aforesaid amendment. Sin i ce, in the instant case, reference to the Arbitrator was made on H 15.7.2015, it seems that newly inserted Sections 29A and 29B have no application qua the dispute pending before Sole Arbitrator, who admittedly, entered upon reference on 15.7.2015. 20. It is well settled law that amendment, if any, is always prospective, unless specifically provided that it shall be effective

retrospectively.

21. At this stage, it may be apt to reproduce Section 26 of the amending Act, 2015, as under:

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"26. Act not to apply to pending arbitral proceedings. -nothing contained in this Act shall apply to the arbitral proceedings commenced, in accordance with the provisions of section 21 of the principal Act, before the commencement of this Act unless the parties otherwise agree but this Act shall apply in relation to arbitral proceedings commenced on or after the date of commencement of this Act."

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22. Careful perusal of aforesaid Section 26 clearly sugges P ts that provisions contained in amending Act, 2015, whereby Sect . ions 29A and 29B, came to be inserted, would not apply t o t H he arbitral proceedings commenced before the date of commencement of the amended Act, save and except, where part ies o other

fwise agree. This Act would apply in relation to arbitrati t on pr ceedings commenced on or after date of commencement of this Act.

23. Close scrutiny of u aforresaid provisions of law as contained in Section 26 o o f the amending Act, 2015, leaves no doubt in the mind of this Court that newly inserted Sections 29A and 29B are not applic ab C le in the present case, where admittedly, arbitration proceedings had commenced on 15.7.2015 i.e. prior to

prom g ulgat h ion of amending Act, 2015. Section 21 of the principal Ac i t, is reproduced herein below: H

"21. Commencement of arbitral proceedings.—Unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent." . 24. Section 21 specifically provides that arbitral proceedings in respect of a particular dispute commence from the

date on which a request for that dispute to be referred to

arbitration is received by the respondent. In the instant case,

petitioners, vide communication dated 10.6.2015 (Annexure P-12),

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invoked dispute resolution process in terms of Article 27 of the Concession Agreement inter se parties. On receipt of aforesaid notice, respondent No.1 sent a communication to the sole arbitrator i.e. Secretary Law, Government of H.P., in terms of .

Article 27.3 of Concession Agreement. P

25. Careful examination of Annexure P-13, .i.e. communication dated 15.7.2015, suggests that arbitrat H or entered upon reference on 15.7.2015 i.e. before 23. f 10. 2015, when amending Act, 2015 came into operation. o

26. Hence, this Court has n r o h t es itation to conclude that newly inserted Sections 29A and 29B have no application in the present arbitration proceeding u s, which admittedly commenced on 15.7.2015. Otherwise als o o, as per Section 21, reproduced herein above, arbitration proceedings in respect of a particular dispute commence from t C he date on which request is received by the responden h t from the claimant for referring the same to arbitration. In th g is case, request for referring the dispute to the arbitrator was rec i eived on 10.6.2015 i.e. approximately four months prior to the H date of coming into operation of the amending Act, 2015. 27. Section 26 of the amending Act, 2015 clearly suggests that no provision of the amended Act would apply to those arbitral proceedings, which had commenced in accordance with provisions

of Section 21 of principal Act, before commencement of amending

Act, unless otherwise agreed upon by the parties.

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28. In the instant case, neither letter dated 10.6.2015 nor letter dated 15.7.2015, whereby dispute was raised and thereafter request was sent to the arbitrator for adjudication, respectively, suggests that parties had agreed to be governed by the provisions .

of amending Act, 2015, meaning thereby arbitral proceedings, P in the instant case, were to be governed by the provisions o H f princ.ipal Act, without looking into the amendments made in the amending Act, 2015. Hence, in view of discussion made he f rei n above, this

Court is of view that newly inserted Section s o 29A and 29B, have no application and as such it can not be said that since Arbitrator failed to pass award within spec r ifiedt time of twelve months,

mandate of Arbitrator stands te u rminated automatically.

29. This Court ex o amined the matter from yet another angle. If it is presumed t C hat arbitral proceedings were to be governed in terms of provis ions contained in the amending Act, 2015, even then, pres h ent petitions do not appear to be maintainable, for the reaso g ns stated herein below. i

30. True it is, that Section 29A prescribes time limit of H twelve months for the arbitral tribunal to decide and pass award after entering into reference, but careful perusal of Section 29A(3) suggests that parties may, by consent, extend period specified under sub-section (1) for making award for further period, not

exceeding six months. Sections 29A(4) and 29A(5) suggest that if

award is not made within period specified under sub-section (1) or

extended period as per sub-section (3), mandate of arbitrator shall

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terminate unless court extends period on the application of any of the parties. Section 29A(5) clearly suggests that competent court may, on the application having been filed by any of the parties, extend period, subject to certain terms and conditions, as may be .

imposed by the Court. Similarly, Section 29A (6) suggests tha P t, while extending period referred to in sub-section (4), H it shal.l be open to the court to substitute one or all of the Arbitrators and in the event of substitution, arbitral proceedings sha f ll c ontinue from

stage already reached and on the basis of th e o evidence and material already on record. Section 29A, if is read in its entirety, it contains complete mechanism to deal with si r tuattion, which may arise after

termination of mandate of Arbitrator, on account of delay in

passing award. At the o first iunstance, time can be extended by Arbitrator himself, C not exceeding six months, with the consent of the parties and, and thereafter, any party can move application for extension h of tim e to the competent court of law, which may, while cons g idering prayer for extension of time, substitute Arbitrator. In i terestingly, in the instant case, there is nothing on record H suggestive of the fact that either of the parties ever consented for enlargement of time in terms of Section 29A(3). Similarly, there is nothing on record that any of the parties moved appropriate application before competent court for enlargement of time as well

as substitution of Arbitrator, whose mandate allegedly stood

terminated because of non-compliance of Section 29A, whereby he

21

was supposed to pass award within a period of twelve months from the date of entering upon reference.

31. After carefully examining Section 29A, as has been discussed herein above, this Court sees no force in the arguments .

having been made by the learned counsel representing the partie P s that since mandate of Arbitrator has terminated due to violatio.n of Section 29A, dispute, as was pending before the Arb H itrator, is required to be adjudicated by this Court, while ex f erc ising powers under Articles 226 and 227 of the Constitu ti o on of India, in light of Section 28(3) read with Section 29B( r 3) o t f the Act. Careful perusal of Sections 28 and 29 of the Act clearly suggests that these provisions relate to rules applicable to sub u stance of dispute as well as decision making by the panel o o f arbitrators. Sections 28 and 29B are reproduced herein C below: "28. Rules applicable to substance of dispute.—(1) Where h the place of arbitration is situate in India,— (a) in an arbitration other than an international commercial arbitration, the arbitral tribunal shall g

decide the dispute submitted to arbitration in i

accordance with the substantive law for the time being in force in India; (b) in international commercial arbitration,— H

(i) the arbitral tribunal shall decide the dispute in accordance with the rules of law designated by the parties as applicable to the substance of the dispute; (ii) any designation by the parties of the law or legal system of a given country shall be construed, unless otherwise expressed, as directly referring to the substantive law of that country and not to its conflict of laws rules;

(iii) failing any designation of the law under clause (a) by the parties, the arbitral tribunal shall apply the rules of law it considers to be appropriate given all the circumstances surrounding the dispute.

22

(2) The arbitral tribunal shall decide ex aequo et bono or as amiable compositeur only if the parties have expressly authorised it to do so.

[(3) While deciding and making an award, the arbitral tribunal shall, in all cases, take into account the terms of the contract and trade usages applicable to the transaction.] 29B. Fast track procedure.—(1) Notwithstanding anything .

contained in this Act, the parties to an arbitration agreement, may, at any stage either before or at the time of appointment of the arbitral tribunal, agree in writing to haPve their dispute resolved by fast track procedure specifie.d in sub-section (3).

(2) The parties to the arbitration agreement, while agreeing for resolution of dispute by fast track procedureH, may agree that the arbitral tribunal shall consist of a sole arbitrator who shall be chosen by the parties. f

(3) The arbitral tribunal shall follow the following procedure while conducting arbitration proceedings under sub-section (1):— o

(a) the arbitral tribunal shal l decide the dispute on the basis of written p t leadings, documents and submissions filed b r y the parties without any oral hearing;

(b) the arbitral tribunal shall have power to call for any fur o ther u information or clarification from the parties in addition to the pleadings and documents filed by them; (c C ) an oral hearing may be held only, if, all the parties make a request or if the arbitral tribunal considers it necessary to have oral hearing for clarifying certain issues; h

(d) the arbitral tribunal may dispense with any technical formalities, if an oral hearing is held, and g

adopt such procedure as deemed appropriate for expeditious disposal of the case. i

(4) The award under this section shall be made within a period of six months from the date the arbitral tribunal H

enters upon the reference.

(5) If the award is not made within the period specified in sub- section (4), the provisions of sub-sections (3) to (9) of section 29A shall apply to the proceedings. (6) The fees payable to the arbitrator and the manner of payment of the fees shall be such as may be agreed between

the arbitrator and the parties.]"

32. Aforesaid provisions of law, nowhere provide that High Court, while exercising powers under Articles 226 and 227 of the

23

Constitution of India can decide the dispute, which has been subject matter of arbitration proceedings under Section 28(3) and 29B(3) of the Act, because provisions contained in sections referred herein above, are with regard to procedure to be followed by .

arbitral tribunal, while conducting arbitration proceedings. P

33. Though, this Court, in view of detailed discus H sion m.ade herein above, is of the view that mandate of Arbitrator has not been terminated as claimed by the petitioners in the p f res ent petitions,

because arbitral proceedings, in the ins ta o nt case, were to be covered by unamended Act/principal Act and not by amending Act, 2015. Otherwise also, as emerges f r romt close scrutiny of Sections

29A and 29B of the Act, remedy, if any, after termination of

mandate of arbitrator, is o /wasu under Arbitration and Conciliation Act, 1996, and no C t by way of instant petitions under Articles 226 and 227.

34. h At th e cost of repetition, it may be stated that even if plea g of petitioners is accepted that mandate of arbitrator had ex i pired automatically in terms of Section 29A (4) since he failed to H pass award within a period of twelve months, from the date of entering upon reference, petitioners herein were required to move appropriate application in the competent court of law, as prescribed under sub-sections 29A (4), 29A(5) and 29A(6) of the

Act, seeking therein enlargement of time as well as substitution of

sole Arbitrator as named in the concession agreement. Apart from

Section 29A, as discussed above, petitioners, in the event of

24

termination of mandate of Arbitrator, could resort to Section 15 of the Arbitration and Conciliation Act, 1996. Section 15 of the Act reads as under:

"15. Termination of mandate and substitution of .

arbitrator.—(1) In addition to the circumstances referred to in section 13 or section 14, the mandate of an arbitrator shall terminate— P

(a) where he withdraws from office for any reason; . or

(b) by or pursuant to agreement of the parties.

(2) Where the mandate of an arbitrator terminates, a substitute arbitrator shall be appointed accor H ding to the rules that were applicable to the appoin tment of the arbitrator being replaced.

(3) Unless otherwise agreed by the pfarties, where an arbitrator is replaced under sub-section (2), any hearings previously held may be repeated a o t the discretion of the arbitral tribunal.

(4) Unless otherwise agreed b y the parties, an order or ruling of the arbitral tribun r al mtade prior to the replacement of an arbitrator unde u r this section shall not be invalid solely because there has been a change in the composition of the arbitral tribunal."

35. Aforesa C id pro o vision of law clearly suggests that where mandate of Arbitrator terminates, a substitute Arbitrator is be appointed acco rding to Rules, which are applicable to the

appo g intme h nt of Arbitrator being replaced. Since, in the instant ca i se, as clearly emerges from the Agreement, there is no provision H with regard to filling up of vacancy caused due to termination of mandate of Arbitrator appointed pursuant to agreement, petitioners could always resort to provisions contained in Section 11 of the Arbitration and Conciliation Act, which is reproduced herein below:

"11 Appointment of arbitrators. —

(1) A person of any nationality may be an arbitrator, unless otherwise agreed by the parties.

(2) Subject to sub-section (6), the parties are free to agree on a procedure for appointing the arbitrator or arbitrators.

25

(3) Failing any agreement referred to in sub-section (2), in an arbitration with three arbitrators, each party shall appoint one arbitrator, and the two appointed arbitrators shall appoint the third arbitrator who shall act as the presiding arbitrator.

(4) If the appointment procedure in sub-section (3) applies and—

(a) a party fails to appoint an arbitrator within .

thirty days from the receipt of a request to do so from the other party; or

(b) the two appointed arbitrators fail to agree oPn the third arbitrator within thirty da H ys from. the date of their appointment, the appointment shall be made, upon request of a party, by the Chief Justice or any person or institution designated by him.

(5) Failing any agreement referred f to in sub-section (2), in an arbitration with a sole arbitrator, if the parties fail to agree on the arbitrator within thirty days from receipt of a r t equesot by one party from the other party to so agree t he appointment shall be made, upon request of a party, by the Chief Justice or any person or institu r tion designated by him. (6) Where, un u der an appointment procedure agreed upon by the parties,— (a o ) a party fails to act as required under that procedure; or (b) the parties, or the two appointed arbitrators, C fail to reach an agreement expected of them under that procedure; or (c) a person, including an institution, fails to perform any function entrusted to him or it h

under that procedure, a party may request the Chief Justice or any person or institution g

designated by him to take the necessary measure, unless the agreement on the i

appointment procedure provides other means for securing the appointment. (6A) The Supreme Court or, as the case may be, the H

High Court, while considering any application under sub-section (4) or sub-section (5) or sub-section (6), shall, notwithstanding any judgment, decree or order of any Court, confine to the examination of the existence of an arbitration agreement. (6B) The designation of any person or institution by the Supreme Court or, as the case may be, the High Court, for the purposes of this section shall not be

regarded as a delegation of judicial power by the

Supreme Court or the High Court.

(7) A decision on a matter entrusted by sub-section (4) or sub-section (5) or sub-section (6) to the Chief Justice or the person or institution designated by him is final.

26

(8) The Chief Justice or the person or institution designated by him, in appointing an arbitrator, shall have due regard to—

(a) any qualifications required of the arbitrator by the agreement of the parties; and

(b) other considerations as are likely to secure the appointment of an independent and impartial arbitrator. .

(9) In the case of appointment of sole or third arbitrator in an international commercial arbitration, the Chief Justice of India or the person or institutioPn designated by him may appoint an arbitrator .of a nationality other than the nationalities of the parties where the parties belong to different f nationalities. (10) The Chief Justice may make such scHheme as he may deem appropriate for dealing with matters entrusted by sub-section (4) or o sub-section (5) or sub-section (6) to him. (11) Where more than t one request has been made under sub-section (4) or sub-section (5) or sub-section (6) to the Chief Jus r tices of different High Courts or their designates, the Chief Justice or his designate to whom the request has been first made under the relevant sub- u section shall alone be competent to decide on the request. (12) (a) W o here the matters referred to in sub-sections (4), (5), (6), (7), (8) and (10) arise in an international commercial arbitration, the reference to ''Chief J C ustice'' in those sub-sections shall be construed as a reference to the ''Chief Justice of India''. (b) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and (10) arise in any h

other arbitration, the reference to "Chief Justice" in those sub-sections shall be g

construed as a reference to the Chief Justice of the High Court within whose local limits the i

principal Civil Court referred to in clause (e) of sub-section (1) of section 2 is situate and, where the High Court itself is the Court referred H

to in that clause, to the Chief Justice of that High Court. (13) An application made under this section for appointment of an arbitrator or arbitrators shall be disposed of by the Supreme Court or the High Court or the person or institution designated by such Court, as the case may be, as expeditiously as possible and an endeavour shall be made to dispose of the matter

within a period of sixty days from the date of service of

notice on the opposite party.

(14) For the purpose of determination of the fees of the arbitral tribunal and the manner of its payment to the arbitral tribunal, the High Court may frame such rules as may be necessary, after taking into consideration the rates specified in the Fourth Schedule.

27

Explanation.—For the removal of doubts, it is hereby clarified that this sub-section shall not apply to international commercial arbitration and in arbitration (other than international commercial arbitration) in case where parties have agreed for determination of fees as per the rules of an arbitral institution.)"

.

36. Provisions contained in aforesaid section clear P ly suggest that parties are free to agree to a procedure . for appointment of Arbitrator or Arbitrators and in case pa H rties fail to appoint an Arbitrator in terms of agreement, entere f d b etween them, request can be made by either of parties, to competent court of law, be it Supreme Court or High Court, fo r aoppointing Arbitrator.

Section 11 (5) specifically deals with app t ointment of sole Arbitrator

named in the agreement. It suggestrs that if parties fail to appoint

sole Arbitrator as named in th u e agreement, within stipulated time,

request can be ma C de by e o ither of the parties, to competent court of law for appointm ent of Arbitrator. 37. At this stage, it would be relevant to refer to law laid down g by h Apex Court, in Shailesh Dhairyawan v. Mohan Ba i lkrishna Lulla reported in (2016) 3 SCC 619, as under: H

"19. The scheme of Section 8 of the 1940 Act and the scheme of Section 15(2) of the 1996 Act now needs to be appreciated. Under Section 8(1)(b) read with Section 8(2) if a situation arises in which an arbitrator refuses to act, any party may serve the other parties or the arbitrators, as the case may be, with a written notice to concur in a fresh appointment, and if such appointment is not made within 15 clear days after service of notice, the Court steps in to appoint such fresh arbitrator who, by a deeming fiction, is to

act as if he has been appointed by the consent of all parties.

This can only be done where the arbitration agreement does

not show that it was intended that the vacancy caused be

not supplied. However, under Section 15(2), where the

mandate of an arbitrator terminates, a substitute arbitrator

"shall" be appointed. Had Section 15(2) ended there, it would be clear that in accordance with the object sought to be

28

achieved by the Arbitration and Conciliation Act, 1996 in all cases and for whatever reason the mandate of an arbitrator terminates, a substitute arbitrator is mandatorily to be appointed. This Court, however, in the judgments noticed above, has interpreted the latter part of the Section as including a reference to the arbitration agreement or arbitration clause which would then be "the rules"

applicable to the appointment of the arbitrator being .

replaced. It is in this manner that the scheme of the repealed Section 8 is resurrected while construing Section 15(2). The arbitration agreement between the parties haPs now to be seen, and it is for this reason that unless .it is clear that an arbitration agreement on the facts of a particular case excludes either expressly or by H necessary implication the substitution of an arbitrator, whether named or otherwise, such a substitution must take place. In fact,

sub-sections (3) and (4) of Section f 15 also throw

considerable light on the correct construction of sub- section

(2). Under sub-section (3), when an arbitrator is replaced,

any hearings previously held by the oreplaced arbitrator may

or may not be repeated at the discretion of the newly

appointed Tribunal, unless pa t rties have agreed otherwise.

Equally, orders or rulings r of the earlier arbitral Tribunal are not to be invalid only because there has been a change in the composition of the earlier Tribunal, subject, of course, to

a contrary agreement by parties. This also indicates that the

object of speedy resoulution of disputes by arbitration would

best be sub-se o rved by a substitute arbitrator continuing at the poin C t at which the earlier arbitrator has left off." 38. Afor esaid exposition of law, as laid down by Apex Court clearly su h ggests that, if a situation arises in which Arbitrator refus g es to act, any party may serve the other parties or the Ar i bitrators, as the case may be, with a written notice to concur in a H fresh appointment, and if such appointment is not made within 15 days after service of notice, the Court steps in to appoint such fresh Arbitrator who, by a deeming fiction, is to act as if he has been appointed by the consent of all parties. This can only be done where the arbitration agreement does not show that it was intended

that the vacancy caused be not supplied. Apex Court has further

concluded that Section 15(2) specifically provides for substitution

29

of arbitrator, whether named or otherwise, meaning thereby substitution must take place in the event of termination of mandate of award but, definitely, that can be attained within frame work of provisions contained under the Act and, certainly, not by resorting .

to powers as contained under Articles 226 and 227 of th P e Constitution of India. .

39. This Court, after bestowing thoughtful consi H deration to the material available on record as well as provisio f ns contained in the Arbitration and Conciliation Act, 1996 , i o s of the view that the petitioners have a specific remedy r u t nder the Act to get Sole Arbitrator substituted, after termination of his mandate. Learned counsel appearing for the petitioners, during arguments, pressed

into service law as referred tuo herein above, to substantiate his

plea, that this Cou C rt haso power under Articles 226 and 227 of the Constitution of India to decide the controversy at hand in these proceeding h s, after looking into claims and counter-claims of the parti g es. But after careful examination of law cited by the learned co i unsel for the parties, we are afraid that the same can be made H applicable to the facts and circumstances of the present case. Needless to say that, High Court, while exercising powers under Article 226, has a prerogative of issuing writs to any person, authority or quasi-judicial authority, under its original jurisdiction,

whereas power under Article 227 is more of administrative and

judicial superintendence over all subordinate courts and tribunals.

True it is that constitutional powers vested in High Courts under

30

Articles 226 and 227 can not be fettered by any alternative remedy, as has been laid down by Apex Court, in the judgments in cases referred herein above by the learned counsel for the petitioners. But in the facts and circumstances, where petitioners have alread P y .subjected themselves to arbitration proceedings, in terms of agreement, and which are still pending before the arbitra H l tribu.nal, as has been discussed in detail, this Court has no power to interfere in the same, while exercising powers un f der Articles 226

and 227 of the Constitution of India. o

40. No doubt, High Court, r whi t le e xercising powers under Articles 226 and 227 of the Constitution of India, having regard to entire facts and circumstances u and, keeping in mind, principles of equity, may pass appropriate orders to do complete and substantial justice and to prom C ote hoonesty and fair play, but, certainly, can not use this power t o thwart proceedings, which are underway, that too under stat h ute i.e. Arbitration & Conciliation Act. g 41. Similarly, this Court sees no dispute with the principles of i law that arbitration clause is not a bar to invoke writ jurisdiction H when injustice is caused and rule of law is violated. But, in the instant case, as has been stated above, petitioners have already availed alternative remedy available to them in terms of agreement, as such, present petitions filed under Articles 226 and 227, can not

be allowed to be used to undo proceedings already underway before

the Arbitrator under Arbitration and Conciliation Act. Apex Court,

while discussing scope of Articles 226 and 227, has repeatedly held

31

that powers under Articles 226 and 227 are to advance justice and not to thwart it. Apex Court has specifically laid down that, even where justice is by-product of erroneous interpretation of law, High Court ought not to wipe out such justice in the name of correcting .

the error of law. (Ramesh Chandra Sankla v. Vikram Cemen P t

reported in (2008) 14 SCC 58) .

42. Similarly, Apex Court in Estralla R f ub be H r v. Dass Estate (P) Ltd. reported in (2001) 8 SCC 97 has held that power under Articles 226 and 227 of the Constitut o ion of India does not

confer an unlimited prerogative u r pon H igh Court to correct all wrong decisions or to prevent hardshtips caused thereby. Power under Article 227 can be exerc u ised to interfere with orders of lower courts and tribunals only o in cases of serious dereliction of duty and flagrant violation of fundamental principles of law or justice, where, in the absence of C intervention by the High Court, grave injustice would rem h ain unchecked and uncorrected. g 43. Apex Court in Shalini Shyam Shetty v. Rajendra Sh i ankar Patil, reported in (2010) 8 SCC 329, has held that High H Court, while exercising powers under Article 226 can interfere if there is violation of statutory duty on the part of some statutory authority or any infraction of statute or it can be shown that a private individual is acting in collusion with a statutory authority.

44. But, in the facts and circumstances of the present case, neither there is any document available on record, suggestive of the fact that learned Arbitrator violated some statutory duties, nor the

32

learned counsel representing the petitioners was able to point out any infraction of statute. Moreover, since, this Court has come to conclusion that provisions contained in Sections 29A and 29B(3)can not be made applicable to the arbitral proceedings .

commenced before promulgation of amending Act, 2015, there wa P s no time limit to be adhered to by the arbitrator and as such, .this Court, sees no violation of statutory duties cast up f on the H arbitrator under the Arbitration and Conciliation Act.

45. Apex Court in Radhey Shyam v. o Chhabi Nath reported in (2015) 5 SCC 423, has also held r tha t t orders of civil court stand on different footing from the orders of authorities or tribunals or courts other than judicial/ civ u il courts. There are no precedents in India for the High Courts to issue writs to the subordinate courts, thus, judicial orde C rs of coivil courts are not amenable to a writ of certiorari under Article 226. Apex Court has held as under:

"27. h Thus, we are of the view that judicial orders of civil courts g are not amenable to a writ of certiorari under Article 226. We are i

also in agreement with the view of the referring Bench that a writ of mandamus does not lie against a private person not discharging any public duty. Scope of Article 227 is different from Article 226.

H

28. We may also deal with the submission made on behalf of the respondent that the view in Surya Dev Rai stands approved by larger Benches in Shail, Mahendra Saree Emporium and Salem Advocate Bar Assn and on that ground correctness of the said view cannot be gone into by this Bench. In Shail, though reference has been made to Surya Dev Rai, the same is only for the purpose of scope of power under Article 227 as is clear from para 3 of the said

judgment. There is no discussion on the issue of maintainability of

a petition under Article 226. In Mahendra Saree Emporium,

reference to Surya Dev Rai is made in para 9 of the judgment only

for the proposition that no subordinate legislation can whittle

down the jurisdiction conferred by the Constitution. Similarly, in

Salem Bar Assn. in para 40, reference to Surya Dev Rai is for the

same purpose. We are, thus, unable to accept the submission of

learned counsel for the respondent."

33

46. Learned counsel for the petitioners specifically laid emphasis on judgment passed by Apex Court in Harbanslal Sahnia

v. Indian Oil Corpn. Ltd. reported in (2003) 2 SCC 107, to suggest that present petitions are maintainable, because inspite of .

availability of alternative remedy, High Court can still exercise i P ts jurisdiction, but we are not in agreement with the afore.said submissions of the learned counsel representing the p H etitioners, because, Apex Court while holding that, in ap f pr opriate case, inspite of availability of alternative rem ed o y, High Court may exercise its jurisdiction has also l r aid t down three contingencies, where court can interfere: (i) where the writ petition seeks enforcement of any of the fun u damental rights; (ii) where there is failure of principles of natural justice; or (iii) where the orders or proceedings are wh C olly woithout jurisdiction or the vires of an Act is challenged. Apex Court has held as under: "7. S h o far as the view taken by the High Court that the remedy by way of recourse to arbitration clause was available to the g appellants and therefore the writ petition filed by the appellants i

was liable to be dismissed, suffice it to observe that the rule of exclusion of writ jurisdiction by availability of an alternative remedy is a rule of discretion and not one of compulsion. In an H

appropriate case in spite of availability of the alternative remedy, the High Court may still exercise its writ jurisdiction in at least three contingencies: (i) where the writ petition seeks enforcement of any of the Fundamental Rights; (ii) where there is failure of principles of natural justice or, (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act and is challenged [See Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and Ors., (1998) 8 SCC 11. The present case attracts

applicability of first two contingencies. Moreover, as noted, the

petitioners' dealership, which is their bread and butter came to be

terminated for an irrelevant and non-existent cause. In such

circumstances, we feel that the appellants should have been

allowed relief by the High Court itself instead of driving them to the

need of initiating arbitration proceedings."

34

47. In the instant case, none of the contingencies, as have been pointed out by the Apex Court, has arisen, because, neither there is any violation of fundamental right nor there is any violation of principles of natural justice. .

48. Similarly, no orders/proceedings, which can be terme P d without jurisdiction or ultra vires the Act, are challenged be.fore this Court. Apex Court, in case Lalitkumar V. Sa H nghavi v. Dharamdas V. Sanghavi reported in (2014) 7 f S CC 255 has specifically dealt with issue with regard t o p o owers of High Courts to intervene in the proceedings/orde r rs p t assed by Arbitral Tribunal. Apex Court, in the aforesaid case, while placing reliance upon law laid down in SBP & Co. v. Pate u l Engg. Ltd., (2005) 8 SCC 618, has held that intervention b o y High Courts in the proceedings under Articles 226 and 2 C 27, with the orders of arbitral tribunal, is not permissible. Ape x Court has held as under: h "8. Within a couple of weeks thereafter, the original g

applicant died on 7.10.2012. The question is whether the i

High Court is right in dismissing the application as not maintainable. By the judgment under appeal, the Bombay High Court opined that the remedy of the appellant lies in H

invoking the jurisdiction of the High Court under Article 226 of the Constitution. In our view, such a view is not in accordance with the law declared by this Court in S.B.P. & Co. v. Patel Engineering Ltd., (2005) 8 SCC 618. The relevant portion of the judgment reads as under: "45. It is seen that some High Courts have proceeded on the basis that any order passed by an arbitral

tribunal during arbitration, would be capable of being

challenged under Article 226 or 227 of the

Constitution of India. We see no warrant for such an

approach. Section 37 makes certain orders of the

arbitral tribunal appealable. Under Section 34, the

aggrieved party has an avenue for ventilating his

grievances against the award including any in-

between orders that might have been passed by the

35

arbitral tribunal acting under Section 16 of the Act. The party aggrieved by any order of the arbitral tribunal, unless has a right of appeal under Section 37 of the Act, has to wait until the award is passed by the Tribunal. This appears to be the scheme of the Act. The arbitral tribunal is after all, the creature of a contract between the parties, the arbitration agreement, even though if the occasion arises, the .

Chief Justice may constitute it based on the contract between the parties. But that would not alter the status of the arbitral tribunal. It will still be a foruPm chosen by the parties by agreement. We, there.fore, disapprove of the stand adopted by some of the High Courts that any order passed by the f ar bit H ral tribunal is capable of being corrected by the High Court under Article 226 or 227 of the Constitution of India. Such an intervention by the o High Courts is not permissible." That need not, however, nec essarily mean that the application such as the one on hand is maintainable under Section 11 of the Act. t

9. Learned senior coun r sel for the appellants, Shri Shyam Divan, submitted that if application under Section 11 is also held not maintainable, the appellants would be left remediless while thueir grievance subsists. On the other hand, learned o senior counsel for the respondents Shri C.U. Singh C submitted that the appellant's only remedy is to appr oach the arbitral tribunal seeking a recall of its decision to terminate the arbitration proceedings. h 10. Chapter III of the Act deals with the appointment, challenge to the appointment and termination of the g

mandate and substitution of the arbitrator etc. i

10.1 Section 11 provides for the various modes of appointment of an arbitrator for the adjudication of the disputes which the parties agree to have resolved by H

arbitration. Broadly speaking, arbitrators could be appointed either by the agreement between the parties or by making an application to the Chief Justice of the High Court or the Chief Justice of India, as the case may be, as specified under Section 11 of the Act. 10.2 Section 12(3) provides for a challenge to the appointment of an arbitrator on two grounds. They are -

(a) "that circumstances exist" which "give rise to justifiable doubts as to" the "independence or impartiality" of the arbitrator;

(b) that the arbitrator does not "possess the qualification agreed to by the parties".

36

10.3 Section 14 declares that "the mandate of an arbitrator shall terminate" in the circumstances specified therein. They are-

"14. Failure or impossibility to act.—(1) The mandate of an arbitrator shall terminate if—

(a) he becomes de jure or de facto unable to perform his functions or for other reasons fails .

to act without undue delay; and

(b) he withdraws from his office or the parties agree to the termination of the mandate." P

.

(2) If a controversy remains concer H ning any of the grounds referred to in clause (a) of sub-section (1), a party may, unless otherwise agreed by the parties, apply to the Court to

decide on the termination of th f e mandate."

Section 14(2) provides that if there is any controversy

regarding the termination of the maondate of the arbitrator

on any of the grounds refe r rred t to in the clause (a) then an application may be made to the Court - "to decide on the termination of the mandate".

11. Section 32 of the Act on the other hand deals with the termination of arbitral proceedings.[1] From the language of Section 32, it o can ube seen that arbitral proceedings get terminated either in the making of the final arbitral award or by an C order of the arbitral tribunal under sub-Section 2. Sub- section (2) provides that the arbitral tribunal shall issue an order for the termination of the arbitral proceedings in the three contingencies mentioned in sub-clauses (a) to (c) h thereof. g

12. On the facts of the present case, the applicability of i

sub-clauses (a) and (b) of Section 32(2) is clearly ruled out and we are of the opinion that the order dated 29th October, 2007 by which the Tribunal terminated the arbitral proceedings could only fall within the scope of Section 32, H

sub-Section (2), sub-clause (c) i.e. the continuation of the proceedings has become impossible. By virtue of Section 32(3), on the termination of the arbitral proceedings, the mandate of the arbitral tribunal also comes to an end. Having regard to the scheme of the Act and more particularly on a cumulative reading of Section 32 and Section 14, the question whether the mandate of the arbitrator stood legally terminated or not can be examined

by the court "as provided under Section 14(2)".

13. The expression "Court" is a defined expression under Section 2(1)(e) which reads as follows:-

"2. Section 2(1)(e) "Court" means the principal Civil Court of original jurisdiction in a district, and

37

includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject- matter of the arbitration if the same had been the subject- matter of a suit, but does not- include any civil court of a grade inferior to such principal Civil Court, or any Court of Small Causes;" .

14. Therefore, we are of the opinion, the apprehension of the appellant that they would be left remediless is without basis in law." .P

49. Recently, Apex Court, in case Union f of Ind H ia v. M/s Ambica Construction reported in AIR 2016 SC 1441, has specifically held that Arbitrator is not a C ou o rt, but outcome of an agreement. It is held as under:

"6. "Court" has been defi r ned tin section 2(c) of the Act to mean a civil court ha u ving jurisdiction to decide the questions forming the subject- matter of the reference. Section 41 of the Act is extra o cted hereunder: "41. Procedure and powers of Court. - Subject to the provisions of this Act and of rules made thereunder : C (a) The provisions of the Code of Civil Procedure, 1908 (5 of 1908), shall apply to all proceedings before the Court, and to all appeals, under this Act, and h

(b) The Court shall have, for the purpose of, and in relation to arbitration proceedings, the same power of making orders in respect of any g

of the matters set out in the Second Schedule i

as it has for the purpose of, and in relation to any proceedings before the Court: Provided that nothing in CI. (b) shall be taken to H

prejudice any power which may be vested in an Arbitrator or umpire for making orders with respect to any of such matters." The court can exercise the power specified in Second Schedule of the Act. However, Arbitrator is not a court. Arbitrator is the outcome of agreement. He decides the disputes as per the agreement entered into between the parties. Arbitration is an alternative

forum for resolution of disputes but an Arbitrator ipso

facto does not enjoy or possess all the powers

conferred on the courts of law."

50. Division Bench of this Court relying upon judgment having been passed by Apex Court has also held in case M/s CNG

38

Trading Company Pvt. Ltd. Versus H.P. State Electricity Board Ltd. reported in 2017(1) Him L.R. (DB) 423, that intervention of High Court in the proceedings under Articles 226 and 227, with the orders made by the arbitral tribunal is not permissible. .

51. Consequently, in view of detailed discussion as well a P s law discussed herein above, this Court sees no occasion to inter.fere in the matter, while exercising powers under Artic f les 22 H 6 and 227 of the Constitution of India. Though, this Court is of the view, for the reasons stated above, that Sections 2 o 9A and 29B of the

amending Act, 2015, are not applicable to the present arbitral

proceedings since the proceedin r gs thad commenced before

promulgation of the amendin u g Act, 2015. But, even otherwise, there is self contained me o chanism under Sections 29A and 29B to deal with the situation, which may arise after termination of the mandate of the arb C itrator. Section 15 of the Act, 1996 also provides procedure h to deal with a situation, which may arise after term g ination of mandate of the arbitrator and, as such, this Court se i es no reason to interfere in the matter or to decide the dispute in H the present petitions, as prayed for by the petitioners. 52. The writ petitions are dismissed being devoid of merits. Pending applications, if any, are also disposed of.

(Mansoor Ahmad Mir) Chief Justice

(Sandeep Sharma) Judge

April 12, 2017

(vikrant)