S.N. Prasad, J.

1. The instant application has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, (hereinafter referred to as the 'Act') 1996, by which, the prayer for appointment of an independent sole Arbitrator has been made in terms of Clause-30 of the Contract dated 31.07.2015.

2. The brief facts of the case, as per the pleadings made in the application, which are required to be enumerated herein, read as under:-

It is the case of the petitioner/applicant that the parties have entered into an agreement dated 31.07.2015 for Design, Site Preparation, Supply, Installation Commissioning of the State Data Centre and Operation & Maintenance. The said contract provided the detailed scope of work. The entire scope of work has bifurcated into two phases, i.e., Schedule-I and Schedule-II. Schedule-I of the scope of work comprised of design, supply, installation and commissioning phase and Schedule-II comprised of Operation and Maintenance phase.

The process of setting up of State data Centre was to be undertaken by the petitioner/applicant, however, the respondent was contractually obliged to obtain regulatory and other clearances for setting up Data Centre, provide State data centre building space, provide raw power, site preparation of State data centre facilities and provisioning of internet bandwidth. The obligations were in the nature of a precondition and the respondent has failed to provide those fundamental facilities, the petitioner/applicant could not have undertaken the process of setting up of State data Centre. As per the contract, the time schedule for implementation of the State data centre was 22 weeks w.e.f. 31.07.2015, i.e., the date of signing of the contract.

In absence of a site to work and electricity, the petitioner/applicant despite its expertise and availability of men and machine, was not in a position to commence its work. The commencement of work by the petitioner was upon those two obligations to be fulfilled by the respondent i.e., providing site and availability of three phase power.

The respondent miserably failed to adhere to the timelines with regard to providing a clean site and three-phase raw power. Thereafter, a meeting was held between the parties on 10.08.2015 followed by letter dated 13.08.2015 of the petitioner/applicant with a request to handover clean data centre site for initiation of civil works by the petitioner.

The respondent has provided clean site to petitioner/applicant on 21.08.2015 i.e., almost after three weeks of signing of the contract.

The delay and lack of urgency on the part of the respondent also spilled over to the second obligation of the respondent under Clause 3.3 and despite repeated meeting, e-mails and requests, the respondent has provided three-phase 1000 KVA raw power on 26.03.2016, i.e., almost of the 33 weeks of the scheduled estimated timeline as per Clause 3.3.

Further, the respondent also took more than six weeks in carrying out inspection of the installing equipment's in order to enable the petitioner/applicant to undertake the final phase of work i.e., commissioning of non-IT & IT components, design document & manual hand over and project sign of.

After completion of the first phase of the scope of work, i.e., Schedule-I, the second phase of the scope of work (Schedule-II) commenced on 15.11.2016 and thus, after successful completion of the first phase, the petitioner raised its final bill of Rs. 5,34,28,825/- against which, an amount of Rs. 2,92,10,130/- was paid by the respondent.

Upon receiving the said amount, an enquiry was made by the petitioner/applicant for an amount of Rs. 2,09,73,674/- which was deducted by the respondent upon penalty of an alleged delay of 31 weeks. The petitioner/applicant, vide its letter dated 01.06.2017, represented before the respondent and intimated that the delay caused in completion of the said project was not on account of the petitioner/applicant and requested the respondent to review its decision to deduct the said payment as the delay was not caused from the end of the petitioner. Upon the said representation, no response was given by the respondent, thereafter, the petitioner/applicant sent reminders dated 01.09.2017 and 14.09.2017 to the respondent requesting for immediate release of the balance outstanding payment. In pursuant to those reminders, the respondent vide its letter dated 20.09.2017, without dealing with the representation of the petitioner/applicant, wrote a cryptic letter merely intimating that the amount has been deducted towards implementation delay penalty.

Aggrieved by the action of the respondent, the petitioner/applicant has sent fresh representation and request dated 03.10.2017 to the respondent informing that the delay in implementation of the contract was not account of any failure on the part of the petitioner/applicant and the delay was squarely on account of failure of respondent to fulfill its obligation as per the timelines and its failure to provide electricity. The petitioner/applicant again sent reminder letters dated 24.10.2017 and 01.12.2017 to the respondent. Since, no response was being given by the respondent, therefore, the petitioner/applicant sent a letter to the Chief Secretary, Government of Jharkhand dated 12.12.2017 requesting him to intervene in the matter and direct the respondent to release the balance payment to the petitioner but all the efforts to amicably resolve the dispute between the parties have failed.

The petitioner/applicant, vide its legal notice dated 31.05.2018, invoked the Arbitration Clause as per the said contract for reference of disputes to the Arbitrator for their adjudication. As per the agreed terms, the petitioner/applicant nominated Mr. Shiv Narayan Singh, Retd. Distt. & Sessions Judge on their behalf and called upon the respondent to nominate their arbitrator. Thereafter, a notice was sent to the respondent on 04.06.2018 which was delivered on 07.06.2018. A legal notice was also sent through speed post being No. ED775770267 IN dated 04.06.2018. However, despite due receipt of the said notice, even more than 30 days have been lapsed, the respondent has not nominated its Arbitrator.

3. When the dispute arose, one application under Section 11 of the Act, 1996 has been filed being Arbitration Application No. 23 of 2018 which was disposed of vide order dated 13.06.2019 by taking into consideration the fact that in course of pendency of the said application, as per the contract, both the parties have nominated their arbitrators. One Shri P.P. Sharma, the deceased, retired Chief Secretary of the State of Jharkhand was appointed to act as Arbitrator on behalf of the respondent-State of Jharkhand, while, Mr. Shiv Narayan Singh, Retd. Distt. & Sessions Judge has nominated to act as Arbitrator on behalf of the petitioner/claimant.

A proceeding was commenced as would appear from the order dated 27.01.2020, wherein, the Arbitrators have passed an order giving suggestion therein to the parties to approach before the High Court for appointment of sole Arbitrator by considering the argument and discussion made before it. Thereafter, a fresh application by invoking the jurisdiction conferred under Section 11(6) of the Arbitration and Conciliation Act has been filed.

4. Mrs. Sidhi Jalan, learned counsel for the petitioner has submitted that both the Arbitrators, in terms of the Arbitration Clause have been nominated on behalf of both the parties, one Mr. Shiv Narayan Singh, Retd. Distt. & Sessions Judge was nominated on behalf of the petitioner and second Sri. P.P. Sharma, retired Chief Secretary of the State of Jharkhand was nominated on behalf of the respondent. It has been submitted that the proceeding has been commenced but due to some dispute arose, the arbitrators, so appointed, passed an order on 27.01.2020, suggesting the parties to approach before the High Court and thereby, the instant application has been filed.

It has been contended that since the dispute has not been resolved, therefore, the instant application has been filed for appointment of Arbitrator, otherwise the dispute will remain unresolved.

5. Mr. Atanu Banerjee, learned counsel, has put his appearance on behalf of the respondent-State of Jharkhand and has filed an affidavit on 12.04.2022. He submits that he is having no opposition in appointing the Arbitrator and as such, no rebuttal reply has been filed, rather, the factual aspect has been brought to the notice of this Court by way of the affidavit.

6. This Court has considered the submission advanced on behalf of the parties.

7. The fact which is not in dispute in this case is that in terms of the Arbitration Clause 30.3 as contained in Contract dated 31.07.2015, the parties have invoked the jurisdiction conferred under Section 11(6) for appointment of Arbitrator and accordingly, the Arbitrators have been appointed on behalf of both the parties, for ready reference, Clause 30 of the Contract reads as under:-

"30. Dispute Resolution

30.1 JAP-IT and the DCO will make effort to resolve amicably by direct informal negotiations any disagreement or disputes arising between them under or in connection with the Contract.

30.2 If, after thirty days from the commencement of such direct informal negotiations, JAP-IT and the DCO has been unable to resolve amicably a Contract dispute, either party may require that the dispute as be referred for resolution to the formal mechanism specified under Clause 30.3 and 30.4.

30.3 In the case of a dispute or difference arising between JAP-IT and the DCO relating to any matter arising out of or connected with this Contract, such dispute or difference shall be referred to two Arbitrators, one Arbitrator to be nominated by JAP-IT and the other to be nominated by the DCO or in case of the said Arbitrators not agreeing then an Umpire to be appointed by the Arbitrators in writing before proceeding with the reference. In case the Arbitrators cannot agree to the Umpire, he may be nominated by the Secretary, Indian Council of Arbitration, New Delhi. The decision of the umpire appointed by the Secretary, Indian Council of arbitrary New Delhi shall be final and binding on the parties.

30.4 The Arbitration and Conciliation Act 1996, the rules there under and any statutory modification or reenactments thereof, shall apply to the arbitration proceedings.

30.5 The venue of arbitration shall be Ranchi, Jharkhand.

30.6 Subject to the Arbitration and Conciliation Act 1996, JAP-IT may terminate this contract by giving a written notice of termination of minimum 30 days to the DCO, if the DCO fails to comply with any decision reached consequent upon arbitration proceedings pursuant to Clause 30.

30.7 Continuance of the Contract:

30.7.1 Notwithstanding the fact that settlement of dispute(s) (if any) under arbitration may be pending, the parties hereto shall continue to be governed by an perform the work in accordance with the provisions under the Scope of Work to ensure continuity of operations."

8. The arbitration proceeding has commenced but due to some dispute therein, the arbitration proceeding remain unresolved and as such, both the Arbitrators have passed an order on 27.01.2020 suggesting the parties to approach before this Court, accordingly, the instant application has been filed.

9. It has been informed in course of argument that one of the arbitrator, namely, Sri. P.P. Sharma, retired Chief Secretary of the State of Jharkhand has died.

10. This Court, from perusal of the material available on record has found that the Arbitrators were appointed, in terms of the contract but the dispute has remained unresolved, therefore, the instant application has been filed.

11. The question herein is that admittedly, the instant application has been filed twice for appointment of fresh arbitrator on the background that the dispute could not have been resolved by the Arbitrator appointed conferring the arbitration clause as contained under Clause 30.3 of the Contract. Since, the dispute admittedly has not been resolved and that is the reason, no opposition has been made on behalf of the State, since, no rebuttal reply to the averment made in the application has been filed, rather, the State is also of the opinion that an Arbitrator is required to be appointed for resolution of the dispute.

12. This Court, considering the aforesaid submission is of the view that the instant application is required to be allowed, accordingly, the instant application is allowed.

13. Learned counsel for the parties have suggested the name of Hon'ble Mrs. Justice (Retd.) Jaya Roy, Former Judge of this Court, to act as sole Arbitrator and as such, the same is being accepted.

14. Considering the aforesaid suggestion, this Court, therefore, appoints Hon'ble Mrs. Justice (Retd.) Jaya Roy, Former Judge of this Court, presently residing at Roy Compound, Dr. Fatullah Road, Near Lower Bazar Thana, Ranchi, to act as sole Arbitrator for resolution of dispute between the parties.

15. The proposed Arbitrator is required to submit a declaration in terms of Section 12 of Arbitration and Conciliation Act, 1996.

16. Learned Arbitrator would be free to lay down fees and other expenses towards conduct of the arbitration proceedings, however, keeping into account the ceiling prescribed under Schedule IV of the of 1996 as amended.

17. Learned Arbitrator would endeavour to conclude the proceedings preferably within the period of six months, also taking into regard the mandate of the Legislature under Section 29A of theof 1996.

18. Let photocopy of the entire pleadings along with copy of the entire order sheet be sent to the learned Arbitrator by the Registry.

19. Pending Interlocutory Application(s), if any, stands disposed of.