Daneil Proprietary v. Ministry of Defence.FACTSThe Ministry of Defence, Government of India (MoDS) placed an order on Denel Proprietary Limited (Denel) for the supply of certain units of an equipment. Some of the units supplied by Denel were rejected by MoD. Subsequently, MoD put hold to all the contracts with Denel. Denel contended that the rejected units failed due to the use of improper items by MoD. Disputes arose. Clause 19(4), the arbitration clause in the contract, provided:"All the disputes and difference arising out of or in any way touching or concerning the agreement (matters for which the decision of a specific authority as specified in the contract shall be final under this agreement, shall not be subject to arbitration) shall be referred to the sole arbitration of the Director General, Ordnance Fys. Govt. of India for the time being or a Government servant appointed by him. The appointee shall not be a Govt. Servant who had dealt with the matters to which this agreement relates and that in the course of his duties as Govt. Servant has had not expressed views on all or any of the matter is in dispute or difference. In case the appointed Govt. Servant in place of the incumbents."

Apprehending bias, Denel wrote to the arbitrator invoking Section 14 of the 1996 Act and terminating the mandate of the arbitrator. The arbitrator nevertheless proceeded with the arbitration. Consequently, Denel applied to the District Court which terminated the mandate of the arbitrator and ordered the Director General, Ordnance Factory, Govt. of India to either act as the arbitrator or nominate the arbitrator as per the contract. The Director General, Ordnance Factory, Govt. of India did not take any action pursuant to the said direction within thirty days. Hence, Denel approached the Supreme Court of India under Section 11(6) of the 1996 Act on 02.03.2011 for the appointment of an independent arbitrator.

Brief FactsWhen disputes arose out of a Collaboration agreement entered into by the parties, Karmayogi Shelters Pvt. Ltd (M/s Karmayogi) approached the Delhi High court to appoint a Sole arbitrator u/s 11 of the Arbitration and Conciliation Act 1996( 1996 Act). Accordingly, a Sole arbitrator was appointed by the High Court to resolve the disputes. After considering the materials brought on record, the Sole arbitrator passed an award holding that M/s Karmayogi had committed breach of the terms of Collaboration Agreement and directed Benarsi Committee to refund the sum of Rs 41 lakhs received from M/s Karmayogi. The award was passed on 12th May 2004 and a duly signed copy of the award was received by Advocate of M/s Karmayogi on 13th May 2004. However, M/s Karmayogi received the copy of the signed award only in December 2004 and in February 2005, they filed an application u/s 31 (5) and 34 of 1996 Act to set aside the award.

Assesment criteria for marking the Arbitration Exercises

Students Must: Specific Outcomes:

Students must demonstrate that, given a set of facts they can identify the nature of a disputes and the path that the conflict has followed and then indicate, with reasons, the substantive provisions of law applicable to the same. The ability to analyze a conflict situation by determining issues and to identify the provisions relating to arbitration Act and and demonstrate adequate knowledge of Law governing Arbitration.

Students must be able to identify core issues from the evidence; probe and clarify issues; apply the law of evidence Ability to appreciate application of procedural law, such as the Evidence Act.

Students must participate in arbitration exercises and based on documents ask relevant questions within the framework of accepted norms, for example not asking leading question in examination in chief. Be able to appreciate and admit relevant documents based on rules of evidence. question witnesses effectively in the adducing of their evidence, both in examination in chief and in cross-examination.

Students must be able to summarize facts and the evidence, determine with reasons what evidence is relevant and reliable and what evidence is not relevant or not reliable; and write an award.

Ability to understand the scheme ofArbitration as an ADR mechanismand to expeditiously and effectivelydispose of case on hand.

Be able to write an award and chair a hearing effectively.

To demonstrate that time management is the essence of any Arbitration proceedings.