IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.7186-7189 OF 2008 [arising out of SLP [C] Nos.27491-27494 of 2008]

M/s. Universal Insulators & Ceramics Ltd. … Appellant Vs. U.P.Power Corporation Ltd. & Anr. … Respondents

O R D E R

Leave granted.

2. Certain disputes between the appellant and the first respondent were referred to arbitration. Second respondent was the Arbitrator. A five member Committee was appointed by the State Government to examine the long pending claims of  the  appellant  (said  to  be  pending  since  1985).  The Committee  made  certain recommendations regarding  payment. This  Court  by  order  dated  19.1.2004  directed  that  the Arbitrator will decide whether the recommendations of the said Committee should be accepted or not. The Arbitrator gave  an  interim  award  on  24.2.2004  holding  that  the recommendations by the committee were binding on the first

respondent and directed payment by the first respondent to the appellant in terms of it. That was challenged by the first respondent by filing a petition under Sections 30 and 33  of  the  Arbitration  Act,  1940  (‘Act’  for  short).  The trial  court  rejected  the  objections  raised  by  the  first respondent in the said petition and made the award, the rule  of  the  court.  The  first  respondent  challenged  it before the High Court and the High Court (by its majority decision)  set  aside  the  interim  award  and  directed  the Arbitrator to decide the application under section 27 of the  Act  for  interim  award,  afresh  after  giving  due opportunity to the parties. The appellant has filed these appeals by special leave, challenging the said decision.

3. In  the  meantime,  the  Arbitrator  (second  respondent) died  and  a  fresh  Arbitrator  has  been  appointed.  The appointment of the new Arbitrator has been stayed.

4. In this background, the parties, after arguing this matter for sometime on the last date, felt that instead of again  spending  time  and  energy  on  the  issue  of  interim award,  they  may  as  well  proceed  with  and  complete  the process of arbitration in regard to the main disputes by referring  the  dispute  to  a  mutually  agreeable  sole

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Arbitrator. On their request the matter was adjourned to today, so that the parties seek instructions.  

5. They  took  instructions  and  when  the  matter  came  up today, submitted that Justice Saghir Ahmed, a former Judge of this Court who is currently based at Lucknow, may be appointed  as  the  sole  Arbitrator  in  place  of  the  new Arbitrator, by consent for deciding the disputes. In view of the above, it is unnecessary to examine the matter on merits.  

6. We  accordingly  dispose  of  these  appeals  with  the following directions :

(i) All disputes between appellant and first respondent which  were  pending  before  the  deceased  second respondent, are referred to Justice Saghir Ahmed, sole Arbitrator.    

(ii) All  records  of  arbitration  (which  were  in  the custody  of  the  deceased  Arbitrator  or  with  the subsequently  appointed  Arbitrator)  shall  be transferred to Justice Saghir Ahmed.  

(iii)Having regard to the chequered history of the case, both the parties shall cooperate with the Arbitrator hereby appointed (Justice Saghir Ahmed) for early disposal.  We  request  the  learned  Arbitrator  to decide the matter as early as possible preferably within six months. The Arbitrator may fix the fee payable by the parties.  

(iv) It is needless to say that all questions are left open and the Arbitrator will decide the matter and

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make  his  award  on  merits  uninfluenced  by  any observation  made  by  the  High  Court  or  previous Arbitrator.  

(v) Parties agree that there is no need to consider the issue of interim award and the disputes shall be decided finally.  

(vi) This  order  will  supersede  any  previous  order regarding  appointment  of  Arbitrator.  The  parties will bring this order to the notice of the court/s where  the  issue  relating  to  appointment  of Arbitrator  is  pending  and  get  those  proceedings closed.

_________________J. (R. V. Raveendran)

New Delhi; _________________J. December 5, 2008. (D. K. Jain)  

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