Latest News
SP Singla Constructions Pvt v. State of Himachal Pradesh
SP Singla Constructions Pvt v. State of Himachal Pradesh
Facts
S.P Singla Construction Pvt. Ltd. (appellant) entered into a contract of construction with the State of Himachal Pradesh (respondent) on 19 December 2006. The time period for completion of work was on or before 4 January 2009. The appellant was granted an extension until 30 June 2010. However, the appellant completed the work on 4 June 2011and payment for the performance of the contract was made. The appellant raised a dispute and made a request for the appointment of an arbitrator through a letter on 18 October 2013. On the request of the appellant and pursuant to Clause 65 of General Conditions of Contract, the Chief Engineer of HPPWD appointed the Superintendent Engineer Arbitration Circle, HPPWD, Solan as the arbitrator on 30 October 2013. However, after the appointment of the arbitrator, the appellant either did not attend the proceeding or sought adjournments stating that he intended to challenge the arbitrator’s appointment under the provisions of Arbitration and Conciliation Act, 1996 before the Chief Justice. Subsequent to this no statement of claim was filed by the appellant. Due to this, the arbitration proceedings were terminated on 6 August 2018 under Section 25(a) of the Arbitration and Conciliation Act, 1996. Following this, the appellant filed a petition before the High Court requesting the appointment of an independent arbitrator under s. 11(6) of the Arbitration and Conciliation Act, 1996. The High Court dismissed the petition of the appellant. The appellant further approached the Supreme Court for the same.
Issues
- Whether the appointment of the arbitrator prior to the Amendment Act lead to disqualification under s.12(5) of the act?
- Whether under Section 11(6) of the 1996 Act a party can apply for the appointment of an arbitrator when an arbitrator has been already appointed?
Judgment
The Supreme Court observed that the proceedings on this case commenced back in 2013 much before the Amendment Act came into force on 23 October 2015. The Supreme Court gave reliance to the judgment of Board of Control for Cricket in India v. Kochi Cricket Private Limited where it was decided that provisions of the act cannot have a retrospective effect on the arbitral proceedings which have already been commenced unless the parties agree otherwise. Thus the Supreme Court upheld that s.12(5) does not apply in the present case.
The Supreme Court relied on the decision given in Antrix Corporation Limited v. Devas Multimedia Private Limited where it was upheld that in case a party is not satisfied or aggrieved by the appointment of the arbitrator then their remedy would be under s. 13 and s. 34 of the act. However, the court stated that in the present case the arbitrator has been appointed under Clause 65 of the agreement. The court further stated that once the arbitrator’s appointment has been made at the insistence of the government then the arbitration agreement cannot be invoked again.
The Supreme Court further set aside the termination of the proceedings as ordered by the arbitrator because the arbitrator had terminated the proceedings under s. 25(a) of the act without issuing a notice of warning to the appellant. The court directed the termination of the proceedings set aside pursuant to Clause 65 of the contract the Chief Engineer of HPPWD should appoint an arbitrator and proceed with the matter in accordance with the law.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)A And Other Related Laws Being Force In India, For The Time Being.
- SP Singla Constructions Pvt v. State of Himachal Pradesh
- The Amendment Act has prospective application with relation to arbitral proceedings
- Appointment of Arbitrator cannot be challenged under Section 11 (6) of the Arbitration and Conciliation Act, 1996
