Delhi High Court - Orders
Vidya Infrabuilt Private Limited vs Airports Authority Of India on 29 July, 2022
Author: V. Kameswar Rao
Bench: V. Kameswar Rao
$~5
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB.P. 1021/2021
VIDYA INFRABUILT PRIVATE LIMITED ..... Petitioner
Through: Mr. K.P.S Kohli, Adv.
versus
AIRPORTS AUTHORITY OF INDIA ..... Respondent
Through: Mr. Digvijay Rai, Mr. Aman Yadav
and Mr. Archit Mishra, Advs.
CORAM:
HON'BLE MR. JUSTICE V. KAMESWAR RAO
ORDER
% 29.07.2022
1. This petition has been filed by the petitioner seeking appointment of an Arbitrator.
2. The case of the petitioner as contended by Mr. KPS Kohli, learned counsel appearing for the petitioner is that on August 12, 2016 a contract agreement was executed by the parties for extension of Runway and Strengthening / Re-surfacing of existing runway along with construction of isolated bay, pavement against blast erosion and RESA and other allied works at Rajamundry Airport.
3. The case of the petitioner is, despite many reminders, respondent had failed to provide, to the petitioner the complete unhindered and contiguous site for carrying out the work in terms of the agreement, which resulted in immense loss despite having mobilized the requisite workforce and machinery for carrying out the work. The final work was completed on September 20, 2018.
4. Mr. Kohli states, the petitioner had submitted bills, but wrongful Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:06.08.2022 12:52:17 deductions were made by the respondent. Despite repeated requests and reminders, the respondent has failed to clear the bills of the petitioner.
5. Mr. Kohli states Clause 25 of the agreement which contemplates Dispute Resolution Committee ('DRC', for short) to resolve the disputes between the parties, was invoked by the petitioner on July 1, 2021, but no reply to the same was received.
6. This resulted in the petitioner approaching this Court for appointment of an Arbitrator.
7. Mr. Kohli states, the response to the notice of the petitioner invoking the DRC (Clause 25 (i)) was received only on October 5, 2021.
8. He has also drawn the attention of the Court to the relevant clause contemplating the adjudicating of the disputes through arbitration, i.e., Clause 25 (ii) which reads as under:
"Except where otherwise provided in the contract all questions and disputes relating to the meaning of the specifications, design, drawings and instruction here-in before mentioned and as to the quality of workmanship or materials used on the work or as to any other question, claim, right, matter or thing whatsoever, in any way arising out of or relating to the contract, designs, drawings, specifications, estimates, instructions, orders or these conditions or otherwise concerning the work or the execution or failure to execute the same whether arising during the progress of the work or after the cancellation, termination, completion or abandonment thereof shall be dealt with as mentioned hereinafter:
i) xxxx xxxx xxxx
ii) · Adjudication through Arbitration:- Except where the decision has become final, binding and conclusive in terms of Sub Para (i) above, disputes or differences shall be referred for adjudication through arbitration by a sole arbitrator appointed by the Member (Planning) / Chairman, AAI. If the arbitrator so appointed is unable or unwilling to act or resigns his appointment or vacates his office due to any reason Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:06.08.2022 12:52:17 whatsoever, another sole arbitrator shall be appointed in the maimer aforesaid. Such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor.
It is also a term of contract that if the contractor does not make any demand for appointment of Arbitrator in respect of any claim in writing within 120 (One hundred Twenty) days of receiving the decision / award from Dispute Resolution Committee, the claim of contractor(s) will be deemed to have been waved and absolutely barred and the AAI shall be discharged and released of all liabilities under the contract in respect of these claims.
It is term of this contract that the party invoking arbitration shall give a list of disputes with amounts claimed in respect of each such disputes alongwith the notice for appointment of arbitrator and giving reference to the rejection of their claims by the Dispute Resolution Committee.
It is also a term of this contract that no person, other than a person appointed by above mentioned appointing authority, should act as arbitrator and if for any reason that is not possible, the matter shall not be referred to arbitration at all. The arbitration shall be conducted in accordance with the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) or any statutory modification or re-enactment thereof and the rules made thereunder and for the time being in force shall apply to the arbitration proceeding under this clause. It is also a term of this contract that the arbitrator shall adjudicate on only such disputes as are referred to him by the appointing authority and give separate award against each dispute and claim referred to him and in all cases where the total amount of the claims by any party Rs.1,00,000/- the arbitrator shall give reasons for the award.
It is also a term of the contract that if any fees are payable to the arbitrator, these shall be paid equally by both the parties. It is also a term of the contract that the arbitrator shall be deemed to have entered on the reference on the date he issues notice to both the parties calling them to submit their statement of claims and counter statement of claims. The venue of the Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:06.08.2022 12:52:17 arbitration shall be such place as may be fixed by the arbitrator in his sole discretion. The fees, if any, of the arbitrator shall, if required to be paid before the award is made and published, be paid half and half by each of the parties. The cost of the reference and of the award (including the fees, if any, of the arbitrator) shall be in the discretion of the arbitrator who may direct to any by whom and in what manner, such costs or any part thereof shall be paid and fix or settle the amount of costs to be so paid.
9. On October 12, 2020, notice on this petition was issued to the respondent. A reply has been filed by the respondent. The reply primarily refers to the fact that the petitioner had issued a letter dated July 1, 2021 invoking Clause 25 (i) of the "Dispute Resolution Mechanism and Arbitration" with a request that in terms of this Clause, a DRC be constituted but not later than July 10, 2021. It is a conceded case because of COVID-19, DRC could not be constituted in time.
10. During the hearing, on March 23, 2022, this Court had passed the following order:
"The hearing has been conducted through hybrid mode (physical and virtual hearing).
1. Without prejudice to the rights and contentions of the parties, it is agreed between them that in terms of the procedure prescribed in the agreement, the matter shall be referred to the Dispute Resolution Committee ('DRC'), which has been appointed by the respondent/AAI.
2. In view of the above, with the consent of the parties, the matter is referred to DRC, to look into the disputes referred to it. The parties shall appear before the DRC on 30.03.2022 at 11 a.m.
3. The matter be listed before the court on 26.05.2022."
11. The above order clearly reveals that the parties were relegated to the Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:06.08.2022 12:52:17 DRC. The same was without prejudice to their and contentions.
12. On July 18, 2022, this Court had also stated as under:
"1. Mr. Digvijay Rai has drawn my attention to minutes of second DRC meeting dated June 29, 2022, wherein, according to him, even the representative of the petitioner was present, and in terms of the said minutes certain details/documents were sought from the petitioner by July 04, 2022. He also states no such details/documents have been submitted.
2. Mr. K.P.S. Kohli, learned counsel appearing for the petitioner states without prejudice the required information has been submitted by the petitioner along with the claims before the DRC. In other words, the petitioner has nothing to add in respect of details / documents.
3. If that be so, Mr. Rai states that a final view shall be taken by the DRC within one week from today.
4. Noting the above submissions made by the counsel for the parties, I deem it appropriate to adjourn the proceedings by ten days."
13. The petitioner through Mr. Kohli had expressed itself that it had submitted all the details / documents which were required to be submitted and nothing further to be added, in the conciliation proceedings.
14. It is the submission of Mr. Rai that out of 17 claims submitted by the petitioner before the DRC one claim has been accepted. Rest of the claims have been rejected for various reasons.
15. Today, Mr. Rai states that in view of the fact that the conciliation proceedings have come to an end, he has no objection with regard to the appointment of an Arbitrator. But the reference has to be with regard to those claims which have not been accepted by the DRC. He also states that the invocation of the arbitration was not in terms of the Clause 25 (ii) of the agreement inasmuch as the petitioner has not submitted the claims as Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:06.08.2022 12:52:17 stipulated in the said clause.
16. On the other hand, Mr. Kohli would contest the submissions made by Mr. Rai by stating that the petitioner is at liberty to either increase or decrease the claims as long as the claims arise from the agreement.
17. He also contest the second submission of Mr. Rai to state that the invocation of the arbitration clause was in accordance with the agreement.
18. Noting the submissions made by the learned counsel for the parties, there cannot be any dispute that the parties are governed by the agreement which contains an arbitration clause which I have reproduced above. There are disputes which have arisen between the parties which need to be adjudicated through the process of arbitration as contemplated in the agreement.
19. If that be so, this Court deem it appropriate to appoint Justice Pradeep Nandrajog, retired Chief Justice of the Bombay High Court (Mobile No. 9818000130) as the Sole Arbitrator who shall adjudicate the disputes between the parties through claims and counter-claims, if any. The fee of the learned Arbitrator shall be regulated in terms Schedule IV of the Act of 1996. He shall give his disclosure under Section 12 of the Act.
20. All the pleas of the parties both on facts and in law including the one noted above are left open to be decided by the learned Arbitrator.
21. A copy of this order be sent to the learned Arbitrator.
22. Petition stands disposed of.
V. KAMESWAR RAO, J JULY 29, 2022/jg Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:06.08.2022 12:52:17