JOIN USIn the July 5 edition of this newspaper, on page 5, we published a report under the headline, “High Court unseats judge Raveendran as arbitrator.”
The said report pertained to a Karnataka High Court order of July 4, appointing Justice V Jagannathan in place of retired judge of the Supreme Court Justice R V Raveendran as the sole arbitrator in a case involving Deepak Cables India Limited (DCIL) and Chamundeshwari Electricity Supply Company (CESC).
Facts of the case
The court order came after a hearing on an interlocutory application (IA No 1/2014) filed by the CESC wherein it had made a plea to replace Justice Raveendran as the sole arbitrator and appoint any other arbitrator who would conduct the arbitration proceedings as per the Karnataka Arbitration Centres rules.
The CESC had approached the High Court in the wake of Justice Raveendran’s observation at an arbitration hearing on January 22, 2014, that if the CESC continued to entertain reservations about the ad hoc arbitration proceedings he was undertaking, it was free to approach the High Court to get appropriate remedies.
Justice Raveendran made it clear that he was well within his rights to conduct the arbitration proceedings in an ad hoc manner, different from the stipulations of the Karnataka Arbitration Centre rules since he was not on the panel of the Arbitration Centre.
Hence, Justice Raveendran also pointed out in the January 22 hearing that by virtue of the recognition of his position by the High Court wide its two orders – August 8, 2013 and January 3, 2014 – and the seeming acceptance of these orders by the two parties to the arbitration, it was open for him to decide on the venue, fee structure and the time schedule of the arbitration proceedings.
But at the said hearing, the CESC stated that it, being a Karnataka PSU entity, could not agree to any fee structure other than what was stipulated in the Karnataka Arbitration Centre rules– which being Rs eight lakh for the entire arbitration exercise.
This position of CESC was contrary to what had emerged in the High Court on January 3, 2014, the day the court requested Justice Raveendran to continue arbitration on the premise that “the two parties have reconciled over the venue, arbitration fee and also the period within which the arbitration is to be concluded.”
The court order was significant in that the cause for the order arose after Justice Raveendran expressed his inability to undertake the arbitration process in view of CESC’s objections over the fee structure he had suggested at a preliminary hearing on September 16, 2013.
CESC communicated its objection over the fee structure in a letter its managing director addressed to Justice Raveendran on October 28, 2013.
The DCIL, the petitioner party to the arbitration took exception to the letter from CESC, stating that CESC’s representative had agreed to the fee structure and other matters at the preliminary hearing on September 16, 2013.
In view of this difference between the two parties, Justice Raveendran asked them to resolve their differences within two weeks. But this did not happen as there was no further communication to him from CESC.
Upon this, on November 20, Justice Raveendran stated in his letter addressed to the two parties that he was no longer willing to continue the arbitration work as the two parties were not in agreement over the venue, fee structure and time frame for the whole exercise.
It was following this that the court requested him, through its order on January 3, 2014, to relent and take up the arbitration work, observing that the two parties were now agreed on ad hoc arbitration.
However, the CESC continued to raise its reservation over the fee issue on the ground that it could not pay more than what was stipulated in the Karnataka Arbitration Centre Rules.
Our report of July 4 did not reflect these factual positions of the case. The report also stated that Justice Raveendran had filed objection in the High Court.
This is not factually correct. He, in fact, had filed no objections as such at any stage since his appointment as the arbitrator on August 8, 2013. We regret the factual inaccuracies in the said report.