Summary
The Court set aside appointment of an independent sole arbitrator where the railway contract prescribed a three-member tribunal selected through a panel procedure. On the facts, the Railways had not forfeited its appointment right. Retired railway officers were not ineligible merely because of former employment, and the contractor’s participation in selecting nominees distinguished cases involving unilateral appointment by an interested person.
Issues
- Whether an independent sole arbitrator could be appointed contrary to the agreed panel procedure.
- Whether retired railway officers were ineligible and the General Manager lacked power to nominate the tribunal.
- Whether the Railways had forfeited its contractual right of appointment.
Held
- Where the contractor had not waived Section 12(5), clause 64(3)(b) provided for a three-member tribunal constituted through a panel of retired railway officers. Appointment of an independent sole arbitrator disregarded the agreed mechanism. (¶¶ 18, 19, 20, 38)
- Former railway employment did not by itself render retired officers ineligible. The decisions concerning an ineligible arbitrator appointing a substitute or unilateral appointment of a sole arbitrator were distinguishable: the contractor could select two names from a panel of four, and at least one selected name had to be appointed as its nominee. (¶¶ 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37)
- The Railways supplied panels before the contractor applied under Section 11(6), and the contractor did not communicate its choices. On this record, the Railways had not forfeited its right to constitute the tribunal. (¶¶ 12, 13, 14, 15, 16, 17)
- The Railways was directed to supply a fresh panel of four retired officers within thirty days of judgment. The contractor must select two within thirty days of receipt; the tribunal must be constituted within thirty days of receipt of that response. (¶ 39)
Result
Appeal allowed; the High Court orders of 3 January and 29 March 2019 appointing an independent sole arbitrator were set aside. A fresh panel and three-member tribunal were directed under clause 64(3)(b), within the specified successive thirty-day periods. Parties to bear their own costs.