Kalpana Chemicals Ltd. vs Oil and Natural Gas Corporation Ltd. and Others

Barin Ghosh, C.J.

Delay Condonation App. No. 10473 of 2010:

The learned Counsel for the Petitioner does not object to the Application for condonation of delay, in preferring the Review Application, to be allowed. Taking the same into consideration and also after considering the averments made in the Application, the same is allowed.

Review App. No. 1053 of 2010:

By consent of the parties, the Review Application is taken up for hearing. In the Review Application, it has been pointed out that while passing the order under review, notice of Clause (42) of the agreement was taken note of, which applied to a contract between ONGC and a public sector enterprise and, accordingly, the provisions of the Arbitration and Conciliation Act, 1996 do not apply to the arbitration contemplated under the said clause. It appears that the contention is correct.

In the circumstances, the order under review is recalled. The Application stands disposed of.

Arbitration Application No. 16 of 2008:

There cannot be any dispute that disputes and differences between the parties hereto have arisen in relation to a contract in writing. The said contract incorporates an arbitration clause and, thereby, directs settlement of such disputes through arbitration, but arbitrator has not been named, nor mode of appointment of arbitrator has been prescribed. Therefore, no sooner the disputes and differences in the instant case arose, it was obligatory on the part of the applicant to approach Oil and Natural Gas Corporation Ltd. to agree to appointment of an arbitrator. The applicant, however, moved the Respondent - Oil and Natural Gas Corporation Ltd. and requested the said Respondent to appoint an arbitrator. On refusal on the part of the Oil and Natural Gas Corporation Ltd., the applicant approached the Chief Justice of Hon''ble Andhra Pradesh High Court u/s 11 of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator. When the matter was, thus, pending before the Chief Justice of the Hon''ble Andhra Pradesh High Court, Oil and Natural Gas Corporation Ltd., on 6th December, 2007, purported to nominate Sri Y.B. Sinha, former Director (Exploration)-O.N.G.C. to act as sole arbitrator in the case. Subsequent thereto, on 19th December, 2007, the application of the applicant, which was pending before the Chief Justice of Hon''ble Andhra Pradesh High Court, was, on contest, rejected on the ground that the jurisdiction pertaining to the said application vests in Uttarakhand.

The agreement of arbitration is provided in Clause (41) of the agreement. In terms thereof, no Arbitrator has been chosen by the parties, nor mode of appointment of arbitrator has been provided. The applicant / contractor sought to invoke the arbitration clause contained in the agreement and, in pursuance therewith, Respondent ONGC belatedly appointed one Sri Y.B. Sinha as Arbitrator. The arbitration agreement did not authorise ONGC to do what it did. It could ask the applicant to agree to appointment of Sri Y.B. Sinha. It did not do so. Applicant also did not agree to the said appointment. In a situation of that nature, the only recourse available is what has been provided in Sub-section (6) of Section 11 of the Act. The same is being sought for in the instant case and, accordingly, I appoint Hon''ble Mr. Justice Irshad Hussain, since retired, as Arbitrator to adjudicate upon the disputes inter se the parties.

The Application is, accordingly, disposed of.