AIRPORTS AUTHORITY OF INDIA  Vs MEENAMBAKKAM REALTY PRIVATE LIMITED -Judgment by Delhi High Court

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* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision:- 4th January, 2024.
+ O.M.P. (T) (COMM.) 107/2023, I.A. 23404/2023 & 23405/2023
AIRPORTS AUTHORITY OF INDIA ….. Petitioner
Through: Mr. K.M. Nataraj, ASG with Mr. Digvijay Rai, Mr. Vinayak Sharma & Mr. Archit Mishra, Advocates along with Sunil Prabhu, Vivek Gupta & Narain Prasad – Officers of Airports Authority of India (M: 9412636726).

versus

MEENAMBAKKAM REALTY
PRIVATE LIMITED ….. Respondent
Through: Mr. Rajshekhar Rao, Sr. Adv. with Mr. Ejaz Maqbool, Mr. Raghavendra Mohan Bajaj, Ms. Akriti Chaubey, Ms. Garima Bajaj and Mr. Kumar Karan, Advocates (M: 9810248083).

CORAM:
JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J. (Oral)
1. This hearing has been done through hybrid mode.
2. This is a petition under Section 14 read with Section 15 of the Arbitration and Conciliation Act 1996 (hereinafter �the Act�) seeking the termination of the Arbitral Tribunal constituted for adjudication of the disputes between the parties. The dispute has arisen between the Petitioner- Airport Authority of India (AAI) and the Respondent- Meenambakkam Realty Private Limited, which was awarded a contract for construction of a multi-level car parking complex with integrated commercial complex at the Chennai Airport.
3. Initially an arbitral tribunal of three Arbitrators was constituted. However, due to various reasons, two of the Arbitrators had recused leading to constitution of a second arbitral tribunal. In the meantime, the Airport Authority of India had an objection with the fact that its nominee Arbitrator was not nominated by itself but by the International Centre for Alternate Dispute Resolution (ICADR).
4. Ld. Counsel for the Respondent submits that since AAI failed to nominate the Arbitrator within 30 days, the ICADR Rules were triggered which led to the ICADR nominating an Arbitrator on behalf of the AAI.
5. Section 14 and 15 of the Act are set out below:
�14. Failure or impossibility to act.�(1) The mandate of an arbitrator shall terminate and he shall be substituted by another arbitrator, 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 his mandate.
(2) If a controversy remains concerning 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 the mandate.
(3) If, under this section or sub-section (3) of section 13, an arbitrator withdraws from his office or a party agrees to the termination of the mandate of an arbitrator, it shall not imply acceptance of the validity of any ground referred to in this section or sub-section (3) of section 12.
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�
(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 according to the rules that were applicable to the appointment of the arbitrator being replaced.
(3) Unless otherwise agreed by the parties, where an arbitrator is replaced under sub-section (2), any hearings previously held maybe repeated at the discretion of the arbitral tribunal.
(4) Unless otherwise agreed by the parties, an order or ruling of the arbitral tribunal made prior to the replacement of an arbitrator under this section shall not be invalid solely because there has been a change in the composition of the arbitral tribunal.�

6. It is clear from the submission of the parties that the present tribunal as constituted is not acceptable to the AAI as there are various objections which are being raised. The Respondent also has objection to the manner in which AAI delayed the constitution of the tribunal.
7. One of the principal objectives of the Act is to institute an arbitral procedure that embodies fairness and efficiency in equal measure. In addition, two of the arbitrators had recused leading to a fresh nominee arbitrator being appointed by the Respondent. In such a situation the Court feels that the tribunal ought to be constituted afresh. Given the facts and circumstances of the present case, in accordance with the provisions of Section 14 and 15 of the Act, in order to ensure that the present arbitration proceedings can be completed in an efficient manner, with the mutual trust and confidence of the parties in the tribunal, this Court deems it appropriate to put to the parties if they both would agree to a solution to the present impasse, if the Court intervenes in the matter and facilitates the constitution of a new arbitral tribunal. This course of action is acceptable to both parties.
8. On behalf of the Petitioner, Mr. KM Nataraj, ld. ASG and Mr. Digvijay Rai, ld. Counsel and on behalf of the Respondent, Mr. Rajshekhar Rao, ld. Sr Counsel and Mr. Raghavendra Mohan Bajaj, ld. Counsel, have consented to the reconstitution of an arbitral tribunal. Accordingly, the Nominee Arbitrator already nominated by the Respondent shall be retained and Mr. Digvijay Rai, ld. Counsel for the Petitioner shall give a list of 3-4 Arbitrators out of which the Court shall appoint one as the Nominee Arbitrator from the Petitioner.
9. With the consent of all parties, in the peculiar facts of this case, the Arbitral Tribunal is constituted in the following terms:-
i) Justice (Retd.) V. Ramasubramanian is appointed as the Presiding Arbitrator;
ii) Justice (Retd.) S. Ravindra Bhat is appointed as the Nominee Arbitrator on behalf of the Petitioner;
iii) Justice (Retd.) Najmi Waziri is the Nominee Arbitrator on behalf of the Respondent;
10. The Tribunal shall be paid fee with the consent of parties in terms of Schedule 4 of the Arbitration and Conciliation Act, 1996.
11. The procedural rules of ICADR for the conduct of the proceedings of the Arbitral Tribunal shall continue to be followed.

12. Petition is disposed of in the above terms. All pending applications are disposed of.�

PRATHIBA M. SINGH
JUDGE
JANURARY 04, 2024/mr/am

O.M.P. (T) (COMM.) 107/2023 Page 2 of 2