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North Eastern Railway v. Tripple Engineering Works

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 6275 of 2014)Decided 13 Aug 2014
Civil Appeal No. 6275 of 2014
Justice Ranjan Gogoi · Justice M.Y. Eqbal

Background

A contractor's two railway contracts were terminated in 1994. A railway-officer arbitration panel appointed in 1996 had produced no award, and arbitration on the second contract had not even begun following a railway reorganisation. The Railways challenged the High Court's appointment of a retired Chief Justice outside the contractual panel procedure.

Decision Breakdown

The Court dismissed the Railways' appeal and upheld the independent arbitrator's appointment. Courts should ordinarily respect agreed appointment procedures, but can depart from them in appropriate circumstances to make arbitration effective. Nearly two decades had passed without an award; there was no supporting material for the claim that one arbitration had been completed, and the other remained unstarted. The contractual process had become futile. Appointing a retired judge therefore caused no legal error or failure of justice and was justified by the exceptional delay.

Lesson Learnt

An arbitration clause should provide an effective remedy. When the agreed appointment process leaves disputes unresolved for extraordinary periods, a court may appoint an independent arbitrator to move matters forward.

Official source (sci.gov.in)View Judgment (PDF)

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