DEEPAK KUMAR BANSAL v. UNION OF INDIA AND ANR. INSC 344
NAME OF THE CASE: Deepak Kumar Bansal v Union of India and ANR.
FACTS: The respondent did not nominate an arbitrator under Clause 64 of the contract. Thereafter, the appellant submitted an application under Section 11 of the Act before the High Court of Rajasthan at Jaipur Bench praying for the nomination of an arbitrator. The High Court dismissed the application based on the argument that a circular issued by the respondent restricted arbitration proceedings to claims below 20% of the contract value. Held the High Court that since the claim of the appellant was above 20% of the contract value, the disputes could not be referred to arbitration.
ISSUE: Whether the High Court rightly rejected the appellant's application for appointment of arbitrator on the ground that the claim value exceeds 20% of the contract value and also on the respondent's circular whereby arbitration is confined to claims less than 20% of the contract value.
HOLDING: The decision of the High Court was set aside and appeal allowed. The application was directed to be posted to the concerned Judge of the High Court for appointment of an arbitrator under Clause 64 of the contract.
RATIONALE: The High Court, therefore, committed an error of law in relying on the ground that the claim value exceeded 20% of the contract value and the circular of the respondent as grounds for refusing the appointment of an arbitrator. The court held that disputes were to be referred to arbitration under Clause 64 of the contract without regard to the fact that the claim value exceeded 20% of the contract value.
- [2] Deepak Kumar Bansal vs Union Of India & Anr, AIRONLINE 2009 SC 98