Director General, Bangladesh Water Development Board and Ors. vs. Md. Abul Hossain

IN THE SUPREME COURT OF BANGLADESH (HIGH COURT DIVISION)

Civil Revision No. 2138 of 2018

Decided On: 02.11.2020

Appellants: Director General, Bangladesh Water Development Board and Ors.
Vs.
Respondent: Md. Abul Hossain

**Hon’ble Judges/Coram:**Mahmudul Hoque, J.

Counsels:
For Appellant/Petitioner/Plaintiff: Md. Abdun Nur, Advocate

For Respondents/Defendant: Md. Wahiduzzaman Sohel, Advocate

Head Note:
Arbitration - Legality of - Appointment of arbitrator - Section 12 of Arbitration Act, 2001- Appeal against impugned judgment and order whereby K appointed as arbitrator for petitioner and F as Arbitrator for opposite party -Whether lower court justified in appointing K appointed as arbitrator for petitioner and F as Arbitrator for opposite party? - Held, in application under Section 12 of Act petitioner also took shortcut way in getting appointment of arbitrator on behalf of opposite party - All steps adopted by petitioner is really unwarranted and not in accordance with law -Long standing dispute between opposite party and petitioner - Purpose will be served and justice will be met, if arbitrator appointed by District Judge on behalf of opposite party is changed as agreed by petitioner - Appointed as arbitrator for opposite party in place of F - Both Arbitrators shall constitute Arbitration Tribunal by appointing chairman of their choice - Arbitration Tribunal shall initiate arbitration proceedings afresh - With above modifications Rule disposed of. [15], [16],[17], [18]

JUDGMENT

Mahmudul Hoque, J.

1. In this revision Rule was issued calling upon the opposite party to show cause as to why the impugned judgment and order dated 24.04.2018 passed by the learned District Judge, Dhaka, in Arbitration Miscellaneous Case No. 410 of 2017 should not be set aside and/or pass such other or further order or orders as to this Court may seem fit and proper.

2. Facts relevant for disposal of this Rule, in short, are that the opposite party, as petitioner, filed Arbitration Miscellaneous Case No. 410 of 2017 in the court of District Judge, Dhaka stating, inter alia, that the petitioner in miscellaneous case was awarded notice of award by the opposite parties for dredging Teesta Barrage and for the work he submitted Bank Guarantee for an amount of Tk. 68,01,000/-. A contract was signed on 30.03.2011 and petitioner completed the work with 30% additional work and submitted final bill for an amount of Tk. 13,53,39,248,64/-, but the opposite parties paid him Tk. 2,05,18,613/- only leaving an amount of Tk. 6,48,02,741.48 as due to the petitioner. Hon’ble Appellate Division by order dated 14.12.2015 directed to dispose of the matter through arbitration under clause 82.3 of the contract agreement, consequently, by serving a notice upon the opposite party, he appointed Mr. Md. Wahiduzzaman Sohel, Advocate, Bangladesh Supreme Court, as his Arbitrator on 02.10.2016, but the opposite parties did not appoint their Arbitrator as yet. As such, the petitioner filed the application under section 12 of the Arbitration Act, 2001 for appointment of Arbitrator on behalf of the opposite parties.

3. The opposite parties contested the miscellaneous case by filing written objection denying almost all material allegations made in the petition, contending enter alia, that the petitioner has filed this case for appointment of an Arbitrator without observing the terms of the contract and as such, there is no scope for appointment of Arbitrator. The opposite parties made full and final payment of the work done; petitioner is claiming payment of alleged additional work for which no contract was signed and no work order was issued, as such, the bill claimed is not within the purview of contract. Moreover, preliminary steps before going for arbitration, i.e. amicable settlement and adjudication was not complied with by the petitioner and as such, the petition is liable to be rejected.

4. The learned District Judge by the impugned judgment and order dated 24.04.2018 allowed the Miscellaneous Case No. 410 of 2017 and appointed two Arbitrators for the parties. At this juncture, the petitioner moved this Court by filing this revisional application and obtained the present Rule and order of stay.

5. The opposite party contested the rule by filing counter affidavit supporting the judgment and order of the learned District Judge.

6. Mr. Md. Abdun Nur, learned Advocate appearing for the Petitioner, at the very outset submits that in an application under section 12 of the Arbitrator Act, Learned District Judge ought to have decided first the matter in dispute is arbitrable and to see that whether the procedures contain in the contract in respect of any dispute has been complied with, before seeking arbitration but in the instant case learned District Judge utterly failed to find and observe that the dispute is arbitrable under the contract and before seeking arbitration the contractor complied with other procedures for settlement of dispute under the contract. He further submits that the petitioner filed the case under section 12 of the Arbitration Act for appointment of an arbitrator on behalf of opposite party employer, but the learned District Judge without complying the provision of section 12 on his own motion appointed two arbitrators for both the parties which was not at all asked for. It is also argued that learned District Judge appointed the arbitrators by its order dated 24.04.2018, after one day, both the arbitrators appointed by the court met and set in a meeting on 26.04.2018 hurriedly without serving any notice upon the employer opposite party and appointed a chairman of the arbitration tribunal on the same date.

7. He further submits that the learned court did not afford any opportunity to the employer to choose their arbitrator to be appointed fixing any date for supplying the name as per sub-section (1) of section 12 of the Arbitration Act, as such, the learned District Judge committed an error of law occasioning failure of justice.

8. Mr. Md. Wahiduzzaman Sohel, learned Advocate appearing for the opposite party submits that the contractor after completion of work and extra work to the satisfaction of the employer submitted final bill and repeatedly requested the employer to settle the same, but the employer did not pay any heed to the request and remain silent about the claim of the contractor. Consequently, the contract party filed Writ Petition No. 1317 of 2014 before this Court in which rule was made absolute directing the employer Bangladesh Water Development Board (“BWDB”) to make payment of the bill within 30 days from the date of receipt of the judgment after assessment of the account on the basis of paper, Against the judgment and order of this Court, BWDB preferred C.P.L.A. No. 3343 of 2014 before the Appellate Division in which judgment and order of the High Court Division was set aside on the observation that there is an arbitration clause in the contract and the dispute is amenable by way of arbitration and it cannot be decided under writ jurisdiction. Thereafter, the contractor served a notice upon the employer appointing his arbitrator Mr. Md. Wahiduzzaman Sohel and requesting the employer to appoint their arbitrator within 30 days from the date of receipt of the notice. The employer did not response the notice, consequentially, the contractor filed the application under section 12 of the Arbitration Act before the District Judge, Dhaka on 01.08.2017 and in the case learned District Judge by the impugned judgment and order dated 24.04.2018 appointed Mr. Kazi Habibul Awal retired Secretary of the Ministry of Law, Justice and Parliamentary Affairs and Ex District Judge, as Arbitrator for the petitioner contractor and Mr. Md. Fazlul Karim, retired Registrar of Bangladesh Supreme Court as Arbitrator for the opposite party employer and there was no illegality at all, as such, the rule is liable discharged.

9. Beard the learned Advocates of both the parties, have gone through the revisional application, application under section 12 of the Arbitration Act, written objection filed by the opposite party employer, contract executed in between the parties and the impugned judgment and order of the learned District Judge.

10. Admittedly, the contractor was awarded a work for dredging the right bank channel of Teesta Barrage by BWDB by a contract agreement dated 30.03.2011. Contract agreement in its clause 82.1 provides provision for settlement of dispute. Clause 82.2 provides a provision for adjudication of the dispute and clause 82.3 is an arbitration clause which run thus;

“82.3 (a) If the parties are unable to reach a settlement as per GCC Clause 82.1(a) within twenty-eight (28) days of the first written correspondence on the matter of disagreement, then, either party may give notice to the other party of its intention to commence arbitration in accordance with GCC Sub-Clause 82.3(b).

(b) The arbitration shall be conducted in accordance with the Arbitration Act (Act No. 1 of 2001) of Bangladesh as at present in force and in the place shown in the PCC.”

11. The contractor without taking any resort under the contract as per clause 82.1 and 82.2 directly invoked writ jurisdiction by filing Writ Petition No. 1317 of 2014 before this Court, in which Rule was made absolute, directing the employer BWDB to make payment of the bill to the contractor subject to scrutiny and assessment of the bill on the basis of papers. Thereafter, in CPLA No. 3343 of 2014 filed by BWDB against the judgment and order of the High Court Division, the Appellate Division set aside the judgment and observed that the dispute can be determined and settled by way of arbitration as per contract on determination of the actual works done by the contractor by proper measurement by an expert. Thereafter, the contractor giving a go bye to clause 82.1 and 82.2 directly served a notice upon the employer seeking arbitration under clause 82.3 appointing Advocate Md. Wahiduzzaman Sohel as their Arbitrator requesting BWDB to appoint an arbitrator on their behalf, but the employer BWDB failed to response the said notice and did not appoint their arbitrator in time as requested by the contractor.

12. Consequently, the contractor filed an application under section 12 of the Arbitration Act before the District Judge, Dhaka, which was opposed by BWDB by filing written objection. The learned District Judge, ought not to have changed the arbitrator appointed by the contractor and in appointing an arbitrator for and on behalf of the employer BWDB fixed a date asking and affording an opportunity to the employer to propose and suggest name of their arbitrator, if there be any. But from the order sheets nowhere it is found that learned District Judge afforded any opportunity to BWDB asking them to submit the name of their arbitrator. Not only this, learned District Judge instead of appointing an arbitrator for the employer has changed the arbitrator already appointed by the contractor and appointed two arbitrators of his own choice in violation of section 12 (1) of the Arbitration Act. It is true that the learned District Judge can appoint an arbitrator for opposite party if they failed to suggest any name of their arbitrator as asked by the court, but in the instant case no such opportunity was given to the opposite party.

13. At the time of hearing of this Rule, the learned District Judge did not see and observe whether there is a dispute between the parties to be arbitrated upon and whether the dispute between the parties arising out of the agreement executed in between them. From the very conduct of the contractor this Court finds that in all the steps he adopted a shortcut way to achieve the goal, but in all the attempts he failed. Finally, when he approached the learned District Judge for appointment of arbitrator on behalf of employer, the learned District Judge also adopted a shortcut procedure in disposing the application. It is to be noted that the contractor for last eight years moved here and there haphazardly to achieve their goal without observing the procedures under the contract and spoiled a countable period in moving haphazardly. Considering long pendency of the matter this Court asked the petitioner’s counsel suggesting that, from the conduct of the parties apparently it appears that there is a dispute between them in respect of payment of bill arising out of the contract and ultimately, the matter has to be decided by an arbitration proceeding upon compliance of the provisions contain in the contract and to save unnecessary expenses of the parties and killing time anymore, the matter can be disposed of by changing an arbitrator for the employer of their choice.

14. Learned Advocate Mr. Abdun Nur agreeing with the change of their arbitration has submitted the name of arbitrator by a supplementary affidavit dated 13.10.2020. But the learned counsel for the opposite party No. 1, contractor opposed the proposed name and submits that the employer for changing their arbitrator can take recourse to section 13 of the Arbitrator Act. Because of opposing the name of arbitrator suggested by the employer BWDB, learned advocate for the petitioner prays for disposing the Rule on merit as the court thinks fit.

15. This Court considered submissions made by the learned counsels for the parties and finds that the conduct of the contactor in getting the dispute settled always not under the provision of contract. But he tried to achieve the result and recover bill amount by adapting various shortcut way which in fact, dragged the matter for more than 08 years which is most unfortunate and not at all desirable from a party to the contract. It may be for the reason of ill advise of his lawyer. In the instant case the contractor at the first instance without resorting and adopting the procedures provided in the contract directly invoked writ jurisdiction in which they become successful but finally, the Appellate Division set aside the judgment observing that the matter in dispute may be settled by way of arbitration as provided in the contract. Thereafter, the contractor did not take recourse to the provisions of the contract under clause 82.1 and 82.2 and directly served a notice seeking arbitration under clause 82.3.

16. In the application under section 12 of the Arbitration Act, the contractor also took a shortcut way in getting appointment of arbitrator on behalf of employer, BWDB. All the steps adopted by the contractor is really unwarranted and not in accordance with law. However, considering long standing dispute between the employer and contractor and ultimate way or procedures to be followed by both the parties under the contract for settlement of the dispute and to save time and expenses of the parties, I think that the purpose will be served and the justice will be met, if the arbitrator appointed by the learned District Judge on behalf of the employer, BWDB is changed as agreed by the learned advocate for the contractor directing them to the dispute within a short possible time.

17. In view of the above, the rule may be disposed of with the modification in the following manner;

“Md. Abdur Rahman Akand, Additional Director General (Planning), Bangladesh Power Development Board, Dhaka, is appointed as arbitrator for the employer, BWDB in place of Mr. Md. Fazlul Karim, retired Registrar, Supreme Court. Both the Arbitrators shall constitute Arbitration Tribunal by appointing a chairman of their choice. The Arbitration Tribunal shall initiate arbitration proceedings afresh with due notices to the parties to the proceedings and conclude the proceedings as early as possible.”

18. With the above modifications the Rule is disposed of, however, without any order as to costs.

The order of stay granted at the time of issuance of the Rule stands vacated.

Communicate a copy of this judgment to the court concerned at once.