In a very significant development, we saw how as early as on January 17, 2022, the Delhi High Court in a refreshing, robust, remarkable, recent and rational judgment titled Panipat Jalandhar National Highway 1 Tollway Pvt Ltd v. NHAI in ARB.P. No. 820/2021 has held that multiple arbitrations with regard to existing claims on same contract are to be avoided. The Single Judge Bench comprising of Justice Suresh Kumar Kait held that permitting the parties to have multiple arbitrations for the adjudication of the existing disputes related to the same contract would entail multiple observations. The Court further held that there is no absolute bar in terms of Entry 22 to the Vth Schedule against the appointment of the same person as the arbitrator in more than two arbitrations within a period of three years.

To start with, this learned, laudable and landmark judgment authored by a single Judge Bench comprising of Justice Suresh Kumar Kait of Delhi High Court sets the pitch in motion by first and foremost putting forth in para 1 that:
The present petition under the provisions of Section 11(6) of the Arbitration and Conciliation Act, 1996 has been filed by the petitioner seeking appointment of the respondent’s Arbitrator upon its failure to appoint the same, for adjudication of disputes with regard to Concession Agreement dated 9th May, 2008. In addition, prayer is also made to declare that the purported appointment of Justice (Retd.) G.P. Mathur, former Judge, Supreme Court by the respondent is non est and bad in the eyes of law.

To put things in perspective, the Bench then envisages in para 2 that:
The petitioner- Panipat Jalandhar NH-1 Tollway Private Limited had entered into a Concession Agreement dated 9th May, 2008 with respondent - National Highway Authority of India (NHAI) for Six-Laning of Panipat-Jalandhar Section of NH-1 from Km 96.00 to Km 387.10 (length of 291.10 Km) in the State of Haryana and Punjab to be executed on Built-Operate-Transfer (Toll) basis on Design- Build-Finance- Operate (DBFO) pattern under NHDP Phase-V. The duration of the Concession Agreement was 15 years commencing from 11th May, 2009 till 11th May, 2024.

While referring to the petitioner’s version, the Bench then states in para 3 that:
According to petitioner, subsequent to entering into the Concession Agreement, petitioner started the work, however, certain disputes arose between the parties and those disputes pertaining to the year 2013 are pending before an independent arbitral tribunal.

While elaborating more, the Bench then notes in para 4 that:
Petitioner has claimed that out of the 291.1 km, the work on 269 km was completed when respondent took a decision to delink 22.1 km out of the total length, for the delay and failure on the part of respondent to hand over the stretch and consequently, due to this delinking, petitioner suffered severe loss to the tune of more than INR 2,000 crores. Accordingly, petitioner sent a Notice of Dispute dated 25th October, 2019 to the respondent. Since the parties failed to resolve the disputes, petitioner invoked arbitration under clause 44.3 of the Concession Agreement and issued a notice dated 7th February, 2020 calling upon the respondent to confer a set of Arbitrators. However, on 4th December, 2020 respondent suspended the Concession Agreement, (against which petitioner preferred a petition under Section 9 of Arbitration and Conciliation Act, 1996 [OMP (I) (COMM) 421/2020].

Furthermore, the Bench then specifies in para 5 that:
According to petitioner, the disputes with regard to suspension and termination of aforesaid Concession Agreement are pending adjudication before the second arbitral tribunal comprising of Justice (Retd.) M.K. Sharma, Presiding Arbitrator, Justice (Retd.) A.K. Sikri as petitioner’s nominee Arbitrator and Justice (Retd.) G.P. Mathur as respondent’s nominee.

Truth be told, the Bench then discloses in para 6 that:
During the course of hearing, Ms. Meenakshi Arora, learned senior counsel appearing on behalf of petitioner submitted that upon respondent’s failure to appoint its nominee Arbitrator, petitioner had preferred a petition under Section 11(6) of the Act, however, vide order dated order dated 4th May, 2021 this Court appointed Justice (Retd.) G.P. Mathur as nominated arbitrator on behalf of the respondent proposed by respondent itself. Further submitted that the said appointment was subject to furnishing of consent by Justice (Retd.) G.P. Mathur and necessary disclosure under Section 12(5) of the Act. Accordingly, a declaration was given on 25th May, 2021 by Justice (Retd.) G.P. Mathur that he has been appointed arbitrator in three other matters by respondent- NHAI in last three years.

Still more, the Bench then reveals in para 7 that:
Further, since parties failed to resolve their differences as highlighted in the Dispute Notice, petitioner issued notice dated 4th June, 2021 to the respondent invoking arbitration and appointed Mr. V.K. Tyagi as its nominee arbitrator and called upon the respondent to appoint its nominee arbitrator within 30 days. It was contended on behalf of petitioner that invocation of arbitration vide notice dated 4th June, 2021 pertains to disputes which are distinct separate and independent of disputes arbitrated by the first and second arbitral tribunal. However, vide its communication dated 17th June 2021, respondent requested to consolidate the second and third arbitration and also vide letter dated 2nd July, 2021 requested Justice (Retd.) G.P. Mathur to consent to act as respondent’s nominee in proposed third arbitration. The aforesaid was objected by the petitioner vide its letter dated 06th July, 2021 explaining how three arbitrations are different from each other and so, cannot be consolidated and also that Justice (Retd.) G.P. Mathur has already been appointed as respondent’s Arbitrator in four matters, including the second arbitration between the parties and all arbitrators have to comply with the requirements of Fifth and Seventh Schedule of the Arbitration Act. However, instead of appointing an alternative arbitrator, respondent vide its communication dated 25th July, 2021 reiterated its appointment of Justice (Retd.) G.P. Mathur and again requested to refer the disputes to the second arbitral tribunal, which was again refused by petitioner vide its letter dated 30th July, 2021 and requested the respondent to nominate its arbitrator. Once again, respondent reiterated its stand vide communication dated 5th August, 2021 and petitioner vide its communication dated 13th August, 2021 rejected the same.

Of course, the Bench then rightly points out in para 28 that:
In the case in hand, the notice invoking arbitration for adjudication of disputes in respect of Concession Agreement dated 9th May, 2008 was sent by petitioner to respondent on 4th June, 2021. The said notice was replied to by the respondent on 17th June, 2021 stating that with respect to Concession Agreement dated 9th May, 2008 an Arbitral Tribunal comprising of Mr. Justice Dr. Mukundakam Sharma, Presiding Arbitrator, Mr. Justice A.K Sikri, Co- Arbitrator and Mr. Justice G.P Mathur, Co-Arbitrator was constituted in May, 2021 and, therefore, these disputes should be referred to the same Arbitral Tribunal. Further, vide its letter dated 2nd July, 2021, the respondent appointed Justice (Retd.) G.P. Mathur as its nominee Arbitrator and sent its copy to petitioner as well as petitioner's nominee arbitrator Mr. V.K. Tyagi. Thereby, it cannot be said that respondent had failed to respond to petitioner’s notice dated 4th June, 2021 invoking arbitration within the stipulated time. However, since the appointment of Justice (Retd.) G.P. Mathur as nominee Arbitrator of respondent as well reference of disputes to the second arbitral tribunal, have been objected to by the petitioner, these are the questions for determination by this Court.

As it turned out, the Bench then observes in para 29 that:
Pertinently, with regard to the Concession Agreement dated 9th May, 2008 petitioner had sent a Notice of Dispute dated 25th October, 2019 to the respondent. Thereafter, respondent had suspended the Concession Agreement on 4th December, 2020, against which petitioner had preferred a petition under Section 9 of Arbitration and Conciliation Act, 1996 [OMP (I) (COMM) 421/2020]. During pendency of the said petition, respondent terminated the Concession Agreement on 5th March, 2021, which was also challenged by the petitioner in O.M.P.(I)(COMM) 98/2021. However, since second Arbitral Tribunal was already constituted on 20th May, 2021 by virtue of order dated 4th May, 2021 passed by this Court in ARB.P.411/2021, therefore, petitioner was directed to approach the arbitral tribunal for grant of interim reliefs.

While citing the relevant case law, the Bench then mandates in para 33 that:
A Coordinate Bench of this Court in Gammon India Ltd. and Another Vs. National Highways Authority of India 2020 SCC OnLine Del 659 while dealing on the aspect of ‘Multiplicity- multiple invocations, multiple references, multiple Arbitral Tribunals, multiple Awards and multiple challenges, between the same parties, in respect of the same contract or the same series of contracts, has observed as under:-

26. Filing of different claims at different stages of a contract or a project is thus permissible in law, inasmuch as the contract can be of a long duration and the parties may wish to seek adjudication of certain disputes, as and when they arise. Despite this permissibility, multiplicity ought to be avoided as discussed hereinafter.

27. The endeavour of Courts in the domain of civil litigation is always to ensure that claims of parties are adjudicated together, or if they involve overlapping issues, the subsequent suit is stayed until the decision in the first suit. It is with the intention of avoiding multiplicity that the principles enshrined in Order 2 Rule 2 CPC, Section 10 CPC and Res Judicata are part of the Code of Civil Procedure from times immemorial. However, since arbitral proceedings are strictly not governed by the Code of Civil Procedure, 1908, it is possible for parties to invoke arbitration as and when the disputes arise, but should the same be permissible without any limitation and ignoring the principles of public policy as enshrined in these provisions.

28. Multiple arbitrations before different Arbitral Tribunals in respect of the same contract is bound to lead to enormous confusion. The constitution of multiple Tribunals in respect of the same contract would set the entire arbitration process at naught, as the purpose of arbitration being speedy resolution of disputes, constitution of multiple tribunals is inherently counter-productive.

29. Typically, in construction contracts, the claims may be multiple in number but the underlying disputes about breach, delays, termination etc., would form the core of the disputes for almost all claims. As is seen in the present case, parties have invoked arbitration thrice, raising various claims before three different Tribunals which have rendered three separate Awards. Considering that a previously appointed Tribunal was already seized of the disputes between the parties under the same contract, the constitution of three different Tribunals was unwarranted and inexplicable. A situation where multiple Arbitral Tribunals parallelly adjudicate different claims arising between the same parties under the same contract, especially raising overlapping issues, is clearly to be avoided.

As a corollary, the Bench then opines in para 35 that:
In view of the above cited decisions, this Court finds that there is no justification for petitioner having invoked third arbitration by virtue of notice dated 4th June, 2021 within less than a month of constitution of second arbitral tribunal on 20th May, 2021 in respect of common Concession Agreement dated 9th May, 2008 and Notice of Dispute dated 25th October, 2019 .

It is worth noting that the Bench then postulates in para 46 that:
This Court also finds that in any agreement or contract, an arbitration clause is maintained with the object to speedy resolution of disputes and in cases where the disputes are of larger magnitude and multiple in number, to avoid any confusion or infirmity, should be referred to the same arbitral tribunal. This Court cannot lose sight of the fact that in response to petitioner’s notice dated 4th June, 2021, vide its reply dated 17th June, 2021 respondent had at the first hand sought reference of the disputes to the second arbitral tribunal and it is only when petitioner agitated to the same, that the respondent vide its letter dated 2nd July, 2021 nominated name of Mr. Justice (Retd.) G.P. Mathur and even thereafter, respondent has maintained the consistent stand to refer the disputes to the second Arbitral Tribunal. The stand of respondent while nominating name of Mr. Justice (Retd.) G.P. Mathur as its Arbitrator is clearly with the intent to refer the disputes to the second arbitral tribunal, of which he is a member. This court fails to understand as to why for one Concession Agreement dated 9th May, 2008 and Notice of Dispute dated 25th October, 2019, petitioner has insisted upon constitution of a separate arbitral tribunal that too within less than one month of constitution of second tribunal.

Most significantly, the Bench then minces no words to unequivocally hold in para 47 that:
In the opinion of this Court multiple arbitrations can exist if the cause of action continues or arises after constitution of a tribunal. This Court is informed that disputes pertaining to the year 2013 are pending before first arbitral tribunal. The suspension and termination of Concession Agreement in question are subject matter of consideration before the second arbitral tribunal. The petitioner has not been able to establish that the disputes, resolution of which is sought under the proposed third arbitral tribunal, cause of action thereof arose post suspension and termination of Concession Agreement. This fact is further substantiated by the language of Notice dated 4th June, 2021 invoking arbitration, which clearly stipulates that for resolution of differences which were subject matter of Notice of Dispute dated 25th October, 2019, the constitution of third arbitral tribunal is sought, which is already under consideration before the second arbitral tribunal and so, in the considered opinion of this court, it would lead to multiple observations and findings by two different tribunals, which cannot be permitted.

Moving on, the Bench then observes in para 48 that:
Consequentially, it is directed that the subject matter of disputes raised in Notice dated 4th June, 2021with regard to Concession Agreement dated 9th May, 2008 and Notice of Dispute dated 25th October, 2019 shall be dealt by the Second Arbitral Tribunal.

Most remarkably, the Bench then holds in para 49 that:
This court is informed that proceedings before the second arbitral tribunal are in progress, however, not yet complete. This Court is conscious that if the disputes raised in the present petition are referred to the second arbitral tribunal, it may result in delay of proceedings before the second arbitral tribunal. However, since the members of the second arbitral tribunal are well conversant with the facts and disputes raised between the parties, having dealt the same Concession Agreement dated 9th May, 2008 and Notice of Dispute dated 25th October, 2019, it would enable to expedite in resolution of disputes rather than delaying it. Moreover, there shall be no confusion or complexity in the outcome of the arbitration, having avoided multiple proceedings.

Finally, the Bench then concludes by holding in para 50 that:
With aforesaid observations, the present petition is accordingly disposed of.

In essence, the Delhi High Court has made it indubitably clear that multiple arbitrations with regard to existing claims on same contract are to be avoided. The Court thus very rightly held that the petitioner was not justified in invoking the third arbitration by virtue of the notice dated 04.06.2021 within less than a month of the constitution of the second arbitral tribunal under the same contract. Very rightly so! The Court also very rightly held that although it is permissible for the parties to have multiple arbitrations as long as the cause of action continues or arises after the constitution of a tribunal, however, all the existing disputes that arises out of the same contract should be decided in the same arbitration. The Delhi High Court also came to the ineluctable conclusion that permitting the parties to have multiple arbitrations for the adjudication of the existing disputes related to the same contract would entail multiple observations. This has to be avoided and so the Delhi High Court also very rightly concluded accordingly! It thus definitely merits no reiteration that all the courts in similar such matters must certainly stick to what the Delhi High Court has so very clearly held in this notable case!

Sanjeev Sirohi, Advocate,
s/o Col BPS Sirohi (Retd), A 82, Defence Enclave,
Sardhana Road, Kankerkhera, Meerut – 250001, Uttar Pradesh