Kar HC | Party to contract displaying repeated non-exercise of right to appoint arbitrator shows waiver of the same by conduct

Karnataka High Court: John Michael Cunha, J. disposed of the petition by appointing a sole arbitrator to adjudicate the said matter in accordance with law.

In the present case, the respondent firm failed to complete the construction work within the stipulated time as per the Joint Development and Supplemental Agreement. Due to the undue delay of over four years and to avoid the development project from going to waste the petitioner sent the firm a legal notice in 2017 demanding the fulfillment of the legal obligations. Since the petitioner was in an urgency to proceed with the construction work, he wrote emails to the respondent regarding the same and went on to proceed with the work on his own. Since the agreement had fallen flat, the petitioner claimed that the respondent was liable to refund him a huge amount out of which a very meagre percentage was actually given back.

According to the said Agreement, a clause categorically made out that in event of a dispute, the matter would be referred for arbitration. The respondent despite repeated notices did not exercise his right to appoint an arbitrator.

S.R Kamalachapan, counsel on behalf of the petitioner submitted that since the respondent had not responded to the notices or even shown a sliver of interest in appointing an arbitrator, a sole arbitrator of the petitioner’s choice should be appointed to resolve the said matter.

Taking note of the submissions, the Court stood by the arbitration clause in the said Agreement and directed the sole arbitrator suggested by the petitioner to take charge of the said issue as the respondent by his conduct had shown clear disinclination towards appointing one.[Mohammed Gafoorur Rahman v. JM Associates, CMP No. 12 of 2019, decided on 27-08-2020]

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