Case Analysis: TRF Ltd. Vs. Energo Engineering Projects Ltd.
- IJLLR Journal
- May 3
- 1 min read
Ria Gulati, BA LLB, Symbiosis Law School, Nagpur (SIU)
CASE TITLE: TRF Ltd. Vs. Energo Engineering Projects Ltd.
CASE CITATION: (2017) 8 SCC 377 (SUPREME COURT OF INDIA)
BENCH: Dipak Misra, A.M. Khanwilkar and Mohan M. Shantanagoudar, JJ.
1. FACTS IN BRIEF
TRF Ltd. (Appellant) and Energo Engineering Projects Ltd. (Respondent) executed and entered into a purchase order which comprised of an arbitration clause, which provided that any disputes which arise would be referred for sole arbitration of the Managing Director of the buyer or his nominee.
Subsequently, a dispute arose regarding encashment of bank guarantees. TRF Ltd. in this regard invoked the arbitration clause and requested the Managing Director of Energo Engineering to appoint a sole arbitrator.
The Managing Director, however, was statutorily incompetent to act as an arbitrator by virtue of the Arbitration and Conciliation (Amendment) Act, 2015, specifically Section 11 and 12(5) which is read with the fifth and seventh schedules. Nevertheless, he nominated a sole arbitrator.
TRF Ltd. challenged this appointment, on the basis of the fact that when the Managing Director himself was ineligible to act as an arbitrator, he should not have been in the position to nominate one either.
The High Court of Delhi upheld this appointment, holding that a statutory modification does not cease the right of a person for contractual appointment.
Aggrieved by this decision of the Delhi High court, TRF Ltd. appealed to the Supreme Court.
