NHAI Vs Progressive Construction: Supreme Court Appoints Justice(Rtd.) GS Singhvi As Sole Arbitrator

The Supreme Court while allowing an appeal filed by National Highways Authority of India (NHAI), directed the parties to the arbitral proceedings to approach the Indian Council of Arbitration within 2 weeks for the adjudication of the disputes in accordance with ICA Rules of Domestic Commercial Arbitration & Conciliation, 2016.

The order came from a division bench of Justice Indu Malhotra and Justice Ajay Rastogi which set aside the earlier order of the Delhi High Court dated 04.12.2019.

A single bench of the High Court vide order dated 10.04.2019 had set aside the arbitral award passed by a three member tribunal in view of incorrect inferences drawn by the tribunal.

Aggrieved by the judgment, cross appeals were filed by both the parties i.e. NHAI and Progressive Construction Ltd. under sec. 37 of the Arbitration and Conciliation Act, 1996 before the division bench of the High Court.

The division bench thereafter directed that the appeals must be confined only to the findings of selective number of claims and counter claim. Therefore, challenging this order, the NHAI had preferred an appeal to the Apex Court.

While dealing with the facts of the case, the Court while setting aside the High Court order dated 04.12.2019, ordered thus:

"We direct that the arbitral proceedings be conducted afresh by the Indian Council of Arbitration, Federation House, Tansen Marg, New Delhi in accordance with its Rules. The Indian Council of Arbitration will have the entire record of the arbitral proceedings collected from the previous arbitral tribunal."

The Court appointed former Supreme Court Judge, Justice G.S. Singhvi as the Sole Arbitrator in the matter who will be adjudicating all the claims and counter claims of the parties afresh.

"If the Sole Arbitrator requires the assistance of qualified Engineer/s or Expert/s, he may appoint such person/s under Section 26 of the Arbitration and Conciliation Act, 1996. The Ld. Arbitrator is free to fix his fees after consultation with the parties, which will be borne equally by them." The Court observed at the outset.

However, the Court went ahead to clarify that the appointment of the Sole Arbitrator is subject to the declarations made under sec. 12 of the Arbitration and Conciliation Act, 1996 with respect to the independence and impartiality of the arbitrator, and the ability to devote sufficient time to complete the proceedings within the statutory period of 12 months under Section 29A of the Act.

Order Dated: 12.02.2021

CITATION: LL 2021 SC 94

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