Poysha Goyal Jain v. M. Shivakumar

CORAM: HON'BLE MR. JUSTICE SANJEEV NARULA

The present petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 [hereinafter referred to as the 'Act'] seeking appointment of a Substitute Arbitrator. At the outset, Mr. S. Nandakumar, learned counsel for the Petitioner states that the present petition be treated as one under Section 15 of the Act. Mr. Tarun Singla, learned counsel for the Respondents does not oppose the request for appointment of a Substitute Arbitrator, however, raises an objection on the ground of maintainability of the present petition in respect of two separate arbitration proceedings. In view of broad consensus between the parties, the Court allows the request of the Petitioner and directs the Registry to re-number the present petition as one under Section 15 of the Act.

The undisputed facts of the case are that the parties have entered into the following two separate Agreements: -

(a) Slump Sale Agreement dated 24th November, 2014 executed between the Petitioner and Respondent No. 1 for sale of 11 Wind Turbine Generators (WTGs) along with the lands admeasuring 49.11 acres, located at Ayyanaruthu Village, Pirancheri Village, Kayathar, Tamil Nadu for consideration of Rs. 4,40,00,000/-;

(b) Slum Sale Agreement dated 24th November, 2014 executed between the Petitioner and Respondent No. 2 [M/s. Gopal Wind Farm, A- 38, First Floor, Mohan Co-operative Industrial Estate, Main Mathura Road New Delhi – 110044] for sale of 3 Wind Turbine Generators (WTGs) along with the lands admeasuring 11.67 acres, located in Pirancheri Village, Kayathar, Tamil Nadu for consideration of Rs. 1,20,00,000/-.

On the basis of the Arbitration Clause contained in afore-said two Agreements, two separate Arbitration proceedings were initiated, one titled as- Poysha Goyal Jain Vs. M. Shivakumar and other titled as- Goyal MG Gases Private Limited Vs. M. Shivakumar and were being conducted before Mr. Manish Kumar Shrivastava, Advocate and upon his recusal, before Mr. Pallav Saxena, Advocate. Subsequently, in view of the decision of the Supreme Court in Perkins Eastman Architects DPC & Ors. Vs. HSCC (India) Ltd.¹, the learned Sole Arbitrator vide Order dated 20th February, 2020, observed that he was de jure incapacitated to continue with the arbitral reference and accordingly, withdrew from the office of the Arbitrator.

In view of the afore-going, the Petitioner has preferred the present petition for appointment of a Substitute Arbitrator.

Mr. Tarun Singla, learned counsel for the Respondents states that he has no objection to the prayer made by the Petitioner, however, since there are two separate arbitration proceedings, it should be clarified that the appointment of the Substitute Arbitrator is in respect of both the proceedings which are independent of each other.

Accordingly, Dr. Shahabuddin (Retd.) former Additional District Judge [Contact No.: +91 8527044844] is appointed as the common Sole Arbitrator with respect to the afore-noted arbitration proceedings. It is made clear that the appointment of the Substitute Arbitrator is in respect of both the Arbitration Agreements/ proceedings which are independent of each other.

With the consent of parties, it is further directed that the learned Arbitrator shall conduct the arbitration proceedings under the aegis of Delhi International Arbitration Centre [hereinafter referred to as 'DIAC'] and in accordance with the DIAC Rules.

The parties are directed to appear before the learned Sole Arbitrator as and when notified. This is subject to the Arbitrator making the necessary disclosure under Section 12(1) of the Act and not being ineligible under Section 12(5) of the Act.

Both the counsels agree that the Arbitration proceedings are at the stage of final hearing and accordingly, it is directed that the proceedings already conducted shall not be repeated and the learned Sole Arbitrator would commence the proceedings from the stage the erstwhile Arbitrator recused himself.

The learned Arbitrator shall fix the fee in consultation with both the parties/ counsels, having regard to the fact that the proceedings are at advanced stage.

Accordingly, the petition is allowed in the above terms.

JUNE 2, 2021