Para 9.7.9 - Arbitral Tribunal | KartavyaDesk
Original Rule Text
i) In cases where the total value of all claims in question added together does not exceed ₹ 1,00,00,000/- (Rupees One Crore), the Arbitral Tribunal shall consist of a Sole Arbitrator who shall be a serving officer of the procuring organisation, not below Junior Administrative Grade, nominated by the Appointing Authority. The sole arbitrator shall be appointed within 60 days from the day when a written and valid demand for arbitration is received by the designated Appointing Authority. ii) In cases not covered by sub-para i) above, the Arbitral Tribunal shall consist of a panel of three serving officers not below Junior Administrative Grade or two serving officers not below Junior Administrative Grade and a retired officer (retired not below the rank of Senior Administrative Grade Officer), as the arbitrators. For this purpose, the Appointing Authority shall send a panel of at least four (4) names of Officers, which may also include the name(s) of retired Officer(s) empanelled to work as Arbitrator, to the Contractor within 60 days from the day when a written and valid demand for arbitration is received by the Appointing Authority. The contractor will be asked to suggest at least 2 names out of the panel for appointment as the Contractor’s nominee within 30 days from the date of dispatch of the request to him. The Appointing Authority shall appoint at least one out of them as the Contractor’s nominee and shall also simultaneously appoint the balance number of arbitrators either from the panel or from outside the panel, duly indicating the ‘presiding arbitrator’ from amongst the 3 arbitrators so appointed. The Appointing Authority shall complete this exercise of appointing the Arbitral Tribunal within 30 days from the receipt of the names of the Contractor’s nominees. While nominating the arbitrators, it shall be necessary to ensure that one of them is from the Finance/ Accounts Department (officer of Selection Grade of the Finance/ Accounts Department shall be considered as of equal status to the officers in Senior Administrative Grade of other departments for appointment of an arbitrator).
What This Means
Para 9.7.9 of the Manual for Procurement of Non-Consultancy Services outlines the rules for setting up an Arbitral Tribunal to resolve disputes with contractors. Think of it like a court specifically designed to handle disagreements about contracts. The size and composition of this tribunal depend on the total value of the claims being disputed. This rule ensures a fair and structured process for resolving disagreements, saving time and resources compared to traditional court proceedings.
If the total value of all claims is ₹1 crore or less, the Arbitral Tribunal will consist of a single arbitrator. This arbitrator must be a serving officer of the government organization doing the procurement, holding a rank not below Junior Administrative Grade (JAG). If the claims exceed ₹1 crore, the tribunal will have three arbitrators. These arbitrators will be serving officers (at least JAG rank) or a mix of serving officers and a retired officer (retired at least as a Senior Administrative Grade officer). The rule also mandates that at least one arbitrator must be from the Finance/Accounts Department to ensure financial expertise is considered during the arbitration process.
This rule directly affects government departments involved in procuring non-consultancy services and the contractors they work with. It provides a clear framework for resolving disputes through arbitration, specifying the qualifications and appointment process for arbitrators based on the value of the claims. Understanding this rule is crucial for government employees involved in procurement and contract management, as well as for contractors seeking to resolve disputes with government agencies.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- •Deals with the composition of the Arbitral Tribunal for resolving disputes in non-consultancy service procurement.
- •For claims up to ₹1 crore, a single arbitrator (serving officer, not below JAG) is appointed.
- •For claims exceeding ₹1 crore, a three-member tribunal is formed, including serving and/or retired officers (retired not below Senior Administrative Grade).
- •At least one arbitrator must be from the Finance/Accounts Department.
- •The Appointing Authority is responsible for nominating and appointing the arbitrators within specified timelines.
Practical Example
The Department of Rural Development has a dispute with M/s Construction Co. regarding a road construction project. M/s Construction Co. has raised claims amounting to ₹75 lakhs due to delays in land acquisition. Since the claim amount is less than ₹1 crore, the Appointing Authority, the Director of Rural Development, will nominate a single arbitrator. The Director nominates Mr. Sharma, a serving officer of Junior Administrative Grade in the department, as the sole arbitrator. Mr. Sharma is appointed within 60 days of receiving the written demand for arbitration.
In another scenario, the Ministry of Textiles has a dispute with M/s Textile Mills Ltd. regarding the supply of uniforms. The total value of the claims is ₹1.5 crore. The Appointing Authority, the Joint Secretary, sends a panel of four names to M/s Textile Mills Ltd. within 60 days. M/s Textile Mills Ltd. suggests two names from the panel. The Joint Secretary appoints one of them as the contractor's nominee and appoints two other officers, including one from the Finance Department, as the remaining arbitrators, also designating the Presiding Arbitrator.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What happens if the contractor doesn't suggest any names from the panel provided for a three-member tribunal?▼
Can a retired officer below the rank of Senior Administrative Grade be appointed as an arbitrator?▼
What is the timeline for appointing the Arbitral Tribunal?▼
Why is it necessary to have an arbitrator from the Finance/Accounts Department?▼
What constitutes a 'valid demand for arbitration'?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Test Your Knowledge
Question 1 of 3
According to Para 9.7.9 of the Manual for Procurement of Non-Consultancy Services, what is the composition of the Arbitral Tribunal when the total value of all claims in question does not exceed ₹ 1,00,00,000/-?
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