Delhi High Court - Orders
M/S Ag Construction-Rajendra Singh ... vs Chief Engineer (Nh), Maharashtra State ... on 8 May, 2023
Author: Chandra Dhari Singh
Bench: Chandra Dhari Singh
$~2
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB.P. 1420/2022
M/S AG CONSTRUCTION-RAJENDRA SINGH BHAMBOO
INFRA PRIVATE LIMITED (JV) ..... Petitioner
Through: Mr.Suvir Sharma, Mr.Prakhar
Khanna and Mr.Sahil Manganani,
Advocates
versus
CHIEF ENGINEER (NH), MAHARASHTRA STATE ROAD
DEVELOPMENT CORPORATION LIMITED ..... Respondent
Through: Mr.Sushil and Mr.Chirag, Advocates
CORAM:
HON'BLE MR. JUSTICE CHANDRA DHARI SINGH
ORDER
% 08.05.2023
1. The petitioner vide the present petition under Section 11(6) (a) and (c) of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as 'the Act') seeks the following prayers:
"A. Appoint a nominee on behalf of the Respondent, to enable adjudication of disputes and claims arising between the Parties to the Contract Agreement; B. Reinstate the appointment of the nominee arbitrator of the Applicant;
C. Award the cost of the Application to the Applicant and against the Respondent; and/or D. Pass any further order(s) as this Hon'ble Court may deem fit, proper and necessary in the facts and circumstances of the present case and in the interest of justice."
2. The applicant of the instant petition is a joint venture of M/s A.G Construction and M/s Rajendra Singh Bhamboo Infra Pvt. Ltd., having its registered office at AG-Tower, Plot No. 303, N-3, CIDCO Aurangabad - 431 003, Maharashtra, who have individually completed various Signature Not Verified Digitally Signed By:SARIKA BHAMOO VERMA Signing Date:11.05.2023 18:45:02 infrastructure development projects across India.
3. The respondent is Maharashtra State Road Development Corporation Limited, a State Government Undertaking, having its administrative office at Opp. Bandra Reclamation Bus Depot, Near Lilavati Hospital, K.C. Marg, Bandra (West) Mumbai - 400050, Maharashtra, who had been entrusted to develop, maintain and manage the National Highways across the State of Maharashtra by Ministry of Road Transport & Highways (hereinafter referred to as ' MoRTH'), which acts as a principal to the respondent.
4. Learned counsel for the petitioner submitted that on 16th April 2018, a Contract Agreement was executed between the petitioner and the respondent for the Project for a contract price of Rs.146,73,05,362/- with the scheduled completion period of 18 (eighteen) months from the appointed date and maintenance period of 48 (forty eight) months from the date of issuance of Provisional Certificate or Completion Certificate, whichever was earlier.
5. Learned counsel for the petitioner submitted that the appointed date for the completion of the project declared by the authority/respondent was 30th June, 2018, with a delay of approximately 60 days/2 months from the scheduled appointed date, in terms of the definition of term "Appointed Date" given under Article 28 and Sub-Clause 4.3.1 (a) of the Contract Agreement.
6. It is submitted that the respondent, however, delayed giving the appointed date which ultimately, resulted in delay in completion of the project.
7. Learned counsel for the petitioner submitted that during the entire construction phase, the contractor had to face certain hindrances in executing the construction works on the Project Site, on account of reasons Signature Not Verified Digitally Signed By:SARIKA BHAMOO VERMA Signing Date:11.05.2023 18:45:02 which were solely attributable to the respondent/authority. It is also submitted that the delay in completion of project is solely caused by the respondent, due to which the petitioner suffered severe financial losses. As a result, several disputes arose between the parties.
8. It is submitted that subsequently, disputes and differences arose between the parties, the parties preferred to invoke arbitration under the arbitration clause i.e. clause 26.3 of the Contract Agreement.
9. It is further stated that the arbitration is required to be conducted as per the Arbitration Rules of the Society for Affordable Resolution of Dispute (SAROD Arbitration Rules), which includes the mechanism for appointment of arbitrators by the parties herein from a panel of arbitrators curated and maintained by SAROD.
10. It is submitted that the petitioner is prejudiced not only with number of empanelled arbitrators being slashed to 98 (ninety eight) from 104 (one hundred four), since the representation of the judicial members in the panel of arbitrators maintained by SAROD was anyway below 5% (five per cent) of the total number of arbitrators within the panel, but also with the introduction of a new Sub-Rule 11.6 under the amended SAROD Arbitration Rules, such actions of the Governing Body of SAROD would have a consequential impact over the principles of party autonomy, which is a grundnorm of arbitration.
11. It is stated that the petitioner vide its email dated 8th June 2022 issued the notice invoking arbitration but to no avail. In view of the aforesaid, and failure of the respondent to nominate its nominee arbitrator. It is further submitted that since the institution failed to perform its functions on behalf the respondent to nominate a nominee arbitrator, the instant petition may be Signature Not Verified Digitally Signed By:SARIKA BHAMOO VERMA Signing Date:11.05.2023 18:45:02 allowed and a sole arbitrator may be appointed by this Court.
12. Per contra, learned counsel for the respondent vehemently opposed the instant petition and submitted that the instant petition is devoid of merits and this Court may be pleased to dismiss the present petition. It is however not disputed that there exists an arbitration agreement/clause in the agreement between the parties and that the subject matter of dispute is arbitrable.
13. Heard learned counsels for the parties and perused the record.
14. This Court, without going into the merits of the case, is prima facie of the view that there is an arbitrable dispute between the parties and the same must be adjudicated by the Arbitral tribunal which would be the competent authority as per the kompetenz-kompetenz principle.
15. The appointment of a sole arbitrator by this Court has been objected to by the learned counsel for the respondent. However, in view of the existence of an arbitral dispute between the parties and the arbitration clause 26.3 of the Contract Agreement being in place, and the requirement of notice invoking arbitration already being fulfilled, this Court finds no reason to abstain from appointing a sole arbitrator.
16. This Court is of the opinion that if there is an arbitration agreement between the parties, which is sought to be negated by other party, then the Court, in line with the letter and spirit of the Act, must lean towards referring the matter to arbitration.
17. Therefore, in the facts and circumstances of this case, this Court refers the dispute raised herein to an Arbitral Tribunal. Hence, the following Order:
Signature Not Verified Digitally Signed By:SARIKA BHAMOO VERMA Signing Date:11.05.2023 18:45:02ORDER
(i) Justice (Retd.) T.S. Thakur, former Chief Justice of India is appointed as the sole arbitrator to adjudicate the disputes which have arisen between the parties;
(ii) The learned sole arbitrator, before entering the arbitration reference, shall ensure the compliance of Section 12(1) of the Arbitration and Conciliation Act, 1996;
(iii) The learned sole arbitrator shall be paid fees as prescribed under the Delhi International Arbitration Centre (DIAC) (Administrative Cost and Arbitrators Fees) Rules, 2018 as amended on 15th November, 2022;
(iv) At the first instance, the parties shall appear before the learned sole arbitrator within 10 days from today on a date which may be mutually fixed by the learned sole arbitrator;
(v) All contentions of the parties are expressly kept open.
18. In the aforesaid terms, the instant petition stands allowed.
19. Pending applications, if any stand disposed.
20. A copy of the order be forwarded to the learned sole arbitrator on the following addresses:
Justice (Retd.) T.S. Thakur Address- A-160, New Friends Colony, New Delhi-110025 Phone No.- +91 8800309969 CHANDRA DHARI SINGH, J MAY 8, 2023 SV/AK Click here to check corrigendum, if any Signature Not Verified Digitally Signed By:SARIKA BHAMOO VERMA Signing Date:11.05.2023 18:45:02