Concept Of Appointing Named Arbitrator Who Is An Interested Party Is No Longer Sustainable: Uttarakhand High Court

Brief Facts:

The dispute arose with respect to a contract executed between the parties for the construction and renovation of the Jummagad Small Hydro Project. The period of completion was fixed at 15 months from the date of the Agreement.

Due to the failure of the applicants to complete the execution of the Project within the agreed period, the applicant invoked arbitration. The main issue was whether the applicants are entitled to appointment of an Arbitrator dehors the stipulation in Clause 28.0, wherein it had been agreed that the Principal Secretary/Secretary, Department of Energy, Government of Uttarakhand, Dehradun shall act as the sole arbitrator or any person nominated by him is entitled to act as the sole arbitrator,

The applicant relied on the case of the Supreme Court in Perkins Eastman Architects DPC and another vs. HSCC (India) Limited (2020). However, the respondent relied on the judgment in S.P. Singla Constructions Private Limited vs. State of Himachal Pradesh and another (2019).

Observations:

The court relied on the judgment in Perkins Eastman Architects DPC and another vs. HSCC (India) Limited (2020) and held that in the light of the law declared by the Apex Court, the concept of named Arbitrator, who himself is an interested party, is no more sustainable. Thus, the court allowed the application and appointed an arbitrator.

Case Title: M/s SPDD VDPPL JV and another v. State of Uttarakhand and others

Case Number: ARBITRATION PETITION NO. 78 OF 2023

Counsel for the Applicants: Mr. B.D. Pande and Mr. Rajesh Sharma, learned counsel.

Counsel for the Respondent: Mr. B.S. Parihar, learned Standing Counsel with Ms. Rajni Supyal, learned Brief Holder for the State. Mr. Rohit Arora learned counsel for respondent Nos. 2 to 4 virtually.

Date of Judgment: 07.01.2025

Citation: 2025 LiveLaw (4) UTT