ISSUING OF LETTER TO OPPOSITE PARTY TO WAIVE THE EMBARGO GIVEN U/S 12(5)OF THE ARBITRATION CANNOT BE DEEMED AS A WAIVER

The Single Bench of Chief Justice Aravind Kumar held that the embargo placed u/s 12 (5) of the Arbitration and Conciliation Act, 1995 ('Act') will be attracted unless it is waived off by the parties. Merely issuing a letter calling the opposite party to waive the embargo cannot be deemed as a waiver. 

FACT

Railway issued a tender and the petitioner, MN Trapasia, was accepted and the parties entered into a contract. A dispute arose between the parties and the petitioner issued a notice u/s 21 of the Act calling the respondent to appoint an Arbitrator. The respondent failed to appoint an Arbitrator and hence, the petitioner filed a petition u/s 11(6) of the Act. Thereafter, the respondent issued section 12 (5) of the Act, which was issued by the petitioner.

ARGUMENTS

Counsel for the petitioner submitted that the petition should be allowed and a sole Arbitrator must be appointed to resolve the issue. Counsel for the respondent submitted that even if the petitioner did not waive section 12 (5) of the Act, the respondent had the power to appoint an Arbitrator. The right of the respondent could not be taken away and hence, the petition should be dismissed.

HELD

The Court ruled that there cannot be a waiver of provisions section 12 (5) merely by issuing a letter to the opposite party to waive the embargo given under section 12(5).