Kerala High Court
Cherian Varkey Construction Company ... vs The Additional Secretary To Government on 7 May, 2021
Author: P Gopinath
Bench: P Gopinath
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE GOPINATH P.
FRIDAY, THE 07TH DAY OF MAY 2021 / 17TH VAISAKHA, 1943
AR.No.43 OF 2020
PETITIONER:
CHERIAN VARKEY CONSTRUCTION COMPANY (PVT) LTD.,
ENGINEERS AND CONTRACTORS, V FLOOR, ALFA PLAZA,
K.P. VALLON ROAD, KADAVANTHRA, KOCHI - 682 020,
REPRESENTED BY ITS AUTHORIZED SIGNATORY,
GEORGE VARKEY.
BY ADVS.
SANTHOSH MATHEW
SRI.ARUN THOMAS
SRI.JENNIS STEPHEN
SRI.VIJAY V. PAUL
SMT.KARTHIKA MARIA
SMT.VEENA RAVEENDRAN
SRI.ANIL SEBASTIAN PULICKEL
SMT.DIVYA SARA GEORGE
SMT.JAISY ELZA JOE
SHRI.ABI BENNY AREECKAL
SMT.LEAH RACHEL NINAN
RESPONDENTS:
1 THE ADDITIONAL SECRETARY TO GOVERNMENT,
ADDITIONAL SKILL ACQUISITION PROGRAMME (ASAP),
DEPARTMENT OF HIGHER EDUCATION, 3RD FLOOR,
TRANS TOWER, VAZUTHACAUD P.O.,
THIRUVANANTHAPURAM - 695 014.
2 THE CHIEF EXECUTIVE OFFICER,
ADDITIONAL SKILL ACQUISITION PROGRAMME (ASAP),
3RD FLOOR, TRANS TOWER, VAZUTHACADU,
THIRUVANANTHAPURAM - 695 014.
BY ADVS. SRI.P.M.SHAMEER, GP
SRI.K.V.MANOJ KUMAR, GP
THIS ARBITRATION REQUEST HAVING COME UP FOR ADMISSION ON
07.05.2021, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:
AR.No.43 OF 2020
-2-
ORDER
Dated this the 7th day of May 2021 The petitioner is a contractor engaged in the construction business. Following the successful selection through a tender process, the petitioner entered into an agreement with the 1st respondent for the construction of Additional Skill Acquisition Programme (ASAP) - Community Skill Park at Pandikkad in Malappuram for a total sum of Rs.10,93,48,182/-.
2. The petitioner claims to have completed the work in accordance with the agreement (marked as Annexure A1) on 22.10.2018. Certain disputes that arose were referred to the Dispute Resolution Board (DRB) in terms of Clause 30 of the General Conditions of Contract. A reference to the Clause shows that if either of the parties have a dispute with the decision of the DRB, they may refer such dispute to arbitration within a period of 28 days AR.No.43 OF 2020 -3- of the written decision by the DRB failing which, the decision of the DRB shall be final and binding.
3. The petitioner claims that they received the letter intimating the decision of the DRB on 30.05.2020 and since they had objections regarding the findings and conclusions of the DRB, on 03.06.2020, they had issued notice of arbitration with respect to the findings and conclusions of the DRB. The notice (Annexure A5) also expressed the intention of the petitioner to approach this Court for appointment of an Arbitrator as the arbitration Clause empowering the 1st respondent to appoint an Arbitrator was contrary to the law laid down by the Supreme Court in Perkins Eastman Architects DPC & Anr v. HSCC (India) Ltd. [AIR 2020 SC 59] and that of the Bombay High Court in Lite Bite Foods Pvt Ltd v. Airports Authority of India [2019 SCC OnLine Bom 5163] and that of this AR.No.43 OF 2020 -4- Court in Aculife Healthcare Private Ltd. v. The Kerala Medical Service Corporation Ltd. [ILR 2019(3)Kerala 208]. It is in the background of the aforesaid facts that this petition has been filed seeking the appointment of an Arbitrator for adjudication of disputes that have arisen between the parties.
4. When the above Arbitration Request was pending before this Court, the petitioner filed IA No.1 of 2020 supported by an affidavit dated 24.11.2020, pointing out that apart from the disputes referred to the DRB, there are certain other unresolved disputes between the parties which had arisen much after the adjudication and decision by the DRB regarding the earlier disputes between the parties. It is pointed out in the affidavit dated 24.11.2020 that in respect of various deductions, the petitioner had communicated his objections and had requested that AR.No.43 OF 2020 -5- the matter be placed before the DRB to be constituted afresh, since the earlier constituted DRB had already ceased to function. In respect of an amount of Rs.15,59,150 which according to the petitioner, it was made to believe that there was no dispute, the petitioner had approached this Court through W.P.(C)No.12580 of 2020. In that writ petition, a statement has been filed by the respondents stating that the amount of Rs.15,59,150/- had already been paid, taking into account other deductions effected.
5. It is a case of the petitioner that since the issue in W.P.(C)No.12580 of 2020 is concerned only the payment of amount of Rs.15,59,150/-, this Court did not consider the newly arisen disputes and since the DRB constituted previously had ceased to function, this Court had directed the learned Government Pleader to ascertain whether the DRB could be constituted to consider the AR.No.43 OF 2020 -6- subsequent disputes or whether the petitioner could be permitted to raise new claims also before the Arbitrator to be appointed by this Court in this Arbitration Request. It is a case of the petitioner that it is evident from the judgment in W.P.(C)No.12580 of 2020 that this Court had permitted all disputes including the fresh disputes to be raised before the Arbitrator to be appointed by this Court in this Arbitration Request. It is also the case of the petitioner that, accordingly, the petitioner had issued Annexure A7 calling for the additional disputes or the new disputes also to be referred to the Arbitrator to be appointed by this Court in this Arbitration Request.
6. I have heard the submissions of Sri.Santhosh Mathew, the learned counsel appearing for the petitioner and Sri.K.V.Manoj Kumar, learned Government Pleader appearing for the AR.No.43 OF 2020 -7- respondents.
7. The learned counsel for the petitioner reiterates the contentions in this Arbitration Request and also those set out in the affidavit filed in support of IA No.1 of 2020.
8. The learned Government Pleader appearing for the respondents, on the other hand, submits that in the facts and circumstances of the case, several of the disputes raised are not arbitrable in terms of the provisions contained in the agreement between the parties. However, he does not dispute the legal position settled by Perkins Eastman (supra) and other decisions relied upon by the learned counsel for the petitioner.
9. In the entirety of the facts and circumstances of the case, I am clearly of the opinion that the petitioner is entitled to an order appointing an Arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 r/w the AR.No.43 OF 2020 -8- Scheme for appointment of Arbitrators by the Chief Justice of the High Court of Kerala, however, subject to a right being reserved to the respondents to contend that all or any of the issues that may be raised before the Arbitrator are not arbitrable either on account of failure to refer them to arbitration within the time specified after the decision by the DRB or on account of the fresh disputes having not been raised before the DRB or for any other reason. Obviously these are matters that can be considered by the Arbitrator to be appointed by this Court.
10. Therefore, I deem it appropriate to refer the parties to arbitration for adjudicating the disputes that have arisen between them under Annexure A1 agreement as below:
a) I hereby nominate Justice
(Retd.) A.M.Shafeeque, "Marhaba" ,
House No.CC 33/12, Green Ripple
AR.No.43 OF 2020
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Road, Swamipady, Elamakkara P.O.,
Kochi-682 025, former Judge of this Court, as the sole Arbitrator to adjudicate the disputes or differences between the parties arising out of Annexure A1 agreement between them.
(b) A copy of this order shall be communicated to the sole Arbitrator by the Registry within a period of one week from today.
(c) The Arbitrator is requested to forward the statement of disclosure under Section 11(8) read with 12(1) of the Arbitration and Conciliation Act, 1996 (as amended).
The disclosure statement shall be
placed before this Court for
confirmation of the appointment of
AR.No.43 OF 2020
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the Arbitrator. The Registry shall
retain a copy of the original.
(d) The Arbitrator's fee shall
be governed by the Kerala High Court (Fee Payable to Arbitrators) Rules, 2017 and both parties agreed that the arbitration costs and fees shall be shared equally.
This Arbitration Request is allowed as above. Post on 28.05.2020 for the disclosure statement.
Sd/-
GOPINATH P. JUDGE akv AR.No.43 OF 2020 -11- APPENDIX PETITIONER'S/S EXHIBITS:
ANNEXURE A1 TRUE COPY OF THE AGREEMENT DATED 6.9.2016 ENTERED INTO BETWEEN THE PETITIONER AND THE 1ST RESPONDENT.
ANNEXURE A2 TRUE COPY OF THE DOCUMENT SHOWING DETAILS OF THE ITEMS REFEREED TO BE SETTLED BY DRB.
ANNEXURE A3 TRUE COPY OF THE DECISION REPORT SHOWING DETAILS OF THE DISPUTES REFERRED AND DECISIONS TAKEN BY DRB. ANNEXURE A4 TRUE COPY OF THE LETTER NO.
ASAP/CSP/DRB/02/2019-20 DATED 22.5.2020 SENT BY THE ADJUDICATOR.
ANNEXURE A5 TRUE COPY OF THE LETTER DATED 3.6.2020 SENT BY THE PETITIONER TO THE 1ST AND 2ND RESPONDENTS AND ADJUDICATOR OF THE DRB.
ANNEXURE A6 A COPY OF THE JUDGMENT DATED 12.11.2020 OF THIS HON'BLE COURT IN WP(C)NO.12850 OF 2020.
ANNEXURE A7 A COPY OF THE LETTER DATED 19.11.2020. RESPONDENT'S/S EXHIBITS:NIL.
//TRUE COPY// PA TO JUDGE