High Court appoints arbitrator to settle dispute between firm, Southern Railway

What is the course left for an industrial unit which had entered into a deal for carrying out doubling of railway track with the railways (Southern Railway) to amicably settle a dispute that had developed between them?

The Madras High Court has carved out a solution by appointing a retired judge of the Supreme Court (Mr Justice P.K. Balasubramanian) as an independent arbitrator to decide the dispute.

According to an original petition preferred by Best Cast Constructions P Ltd, Arakkonam, following tenders floated by the Southern Railway for doubling of track between Shoranur and Mangalore Cannanore-Mangalore section, it had entered into a contract on June 28, 1999 with the Railway for carrying out the work.

Disputes arose in February 2001 between the petitioner and the respondent (S Rly) with regard to payment of bills, etc. As there was no response from the respondent, a notice was sent on June 18, 2007 by the petitioner invoking the arbitration clause, and the respondent was requested to refer the claims of the petitioner to arbitration.

Though arbitrators were appointed as per the arbitration clause and they entered upon the reference on December 5, 2008, the proceeding could not be continued for various reasons, the petitioner contended.

The petitioner, therefore, filed the present original petition for appointment of an independent arbitrator to decide the dispute and to give an award.

According to the respondent, on December 14, 2009 it had sent a panel of officials to the petitioner to select their nominee to be appointed as arbitrator in terms of conditions of the contract.

The Chief Justice Mr M.Y. Eqbal, who heard the petition, observed that a question had arisen for consideration whether persons so nominated by the respondent could be directed to act as arbitral tribunal or an independent arbitrator could be appointed to decide on the disputes. It was clear, the Chief Justice noted, that proceedings could not be concluded for the reason, inter alia , that in the midst of proceedings, some of officers were transferred from one place to another.

The Chief Justice held that in the aforesaid premises, he appointed Mr Justice P.K. Balasubramanian, retired Judge of Supreme Court, as an independent arbitrator. He was requested to give an award within a reasonable time.