Gujarat High Court
Scg Contracts India Private Limited vs M/S Gandhinagar Railway And Urban ... on 18 February, 2022
Author: Aravind Kumar
Bench: Aravind Kumar
C/IAAP/173/2021 ORDER DATED: 18/02/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/PETN. UNDER ARBITRATION ACT NO. 173 of 2021
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SCG CONTRACTS INDIA PRIVATE LIMITED
Versus
M/S GANDHINAGAR RAILWAY AND URBAN DEVELOPMENT
CORPORATION LTD.
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Appearance:
MR R G DWIVEDI(6601) for the Petitioner(s) No. 1
MS DHARA P BHATT(7530) for the Respondent(s) No. 1
MR. PARTH H BHATT(6381) for the Respondent(s) No. 1
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CORAM:HONOURABLE THE CHIEF JUSTICE MR. JUSTICE
ARAVIND KUMAR
Date : 18/02/2022
ORAL ORDER
1. This application is filed under Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of sole arbitrator.
BRIEF BACKGROUND :
2. Respondent invited tender for execution of Interior work for "Development of 300 Rooms Hotel at the Airspace at Gandhinagar Railway Station", Gandhinagar, Gujarat and petitioner was the successful bidder resulting in Letter of Acceptance dated 10.07.2018 being issued. Clause 1.66 of the contract provides for resolving the dispute, if any, arising between the parties to the said agreement finally by Page 1 of 7 Downloaded on : Sun Apr 24 13:26:31 IST 2022 C/IAAP/173/2021 ORDER DATED: 18/02/2022 arbitration. It is also agreed that the Arbitral Tribunal would consist of sole Arbitrator to be appointed by the mutual agreement of the parties.
3. It is stated in the petition that an agreement came to be entered into on 15.10.2018 between the parties and the value of the contract was Rs.57,49,12,396/- which was later revised to Rs.57,48,74,763/-. It is stated that time was the essence of the contract and as such petitioner deployed all its resources and there was hindrance on the part of the respondent in providing free vacant site to petitioner, as a result of which the contract was extended by communication dated 07.02.2019. It is also stated that the respondent by communication dated 24.10.2019 has admitted that the extension was necessitated and despite such extensions, respondent is alleged to have not provided work front to petitioner. It is further alleged by the petitioner that several communications were exchanged between petitioner and respondent as a prelude to the dispute and many emails came to be exchanged. Petitioner has alleged that respondent unilaterally terminated the contract on 05.02.2020 and also sought 'No Objection Page 2 of 7 Downloaded on : Sun Apr 24 13:26:31 IST 2022 C/IAAP/173/2021 ORDER DATED: 18/02/2022 Certificate' from petitioner as a pre-condition for release of the Bank Guarantee which was furnished with a note that same was issued on the request of the respondent. Contending that dispute had arisen between the parties and invoking arbitration clause petitioner is said to have forwarded a communication on 07.12.2020 to the respondent for arriving at an amicable settlement. An attempt made to resolve the dispute did not yield result. Hence, petitioner is said to have got issued notice on 12.03.2021 seeking for resolution of the dispute through arbitration as provided under Clause 1.66 of the contract. Since no reply was received, reminder is also said to have been forwarded by the petitioner on 10.02.2021. On 23.06.2021, petitioner is said to have given 'No Claim Certificate' and contends that it was due to the pressure exerted by the respondent. Hence, petitioner is said to have forwarded the communication dated 16.08.2021 (Annexure-Q) seeking resolution of the dispute by arbitration whereunder four names of the Arbitrators were suggested. On account of there being no response from the respondent, the present petition has been filed.
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C/IAAP/173/2021 ORDER DATED: 18/02/2022
4. On respondents being notified, they have appeared and they have not filed any statement of objection.
5. Having heard Shri R.G.Dwivedi, learned counsel for petitioner and Shri Parth Bhatt, learned counsel appearing for the respondent, this Court is of the considered view that petitioner is entitled to the relief sought for due to following reasons.
6. As per the contract dated 15.10.2018 entered into between petitioner and respondent, it is agreed between the parties that instructions issued to the bidders, general and special conditions of the contract etc. would form part and parcel of the contract. As per the terms of the contract, the parties have agreed that if any dispute or difference of any kind whatsoever arises between the parties, they would try to negotiate and amicably settle the dispute amongst themselves and in the event of no amicable solution or settlement is reached within a period of 30 days from the date on which the dispute or difference would arise, such dispute would be settled by arbitration. The Arbitration Agreement so agreed between the parties reads thus : Page 4 of 7 Downloaded on : Sun Apr 24 13:26:31 IST 2022
C/IAAP/173/2021 ORDER DATED: 18/02/2022 "1.66 Arbitration If any dispute or difference of any kind whatsoever arises between the parties in connection with or arising out of or relating to or under this Contract, the parties shall promptly and in good faith negotiate with a view to its amicable resolution and settlement. In the event no amicable resolution or settlement is reached within a period of thirty (30) days from the date on which the above-mentioned dispute or difference arose, such dispute or difference shall be finally settled by arbitration.
The arbitral tribunal shall consist of a sole arbitrator appointed by mutual agreement of the parties. In case of failure of the parties to mutually agree on the name of a sole arbitrator, the arbitral tribunal shall consist of three arbitrators. Each party shall appoint one arbitrator and the two arbitrators so appointed shall jointly appoint the third arbitrator. The seat of arbitration shall be Gandhinagar, Gujarat and the arbitration shall be conducted in the English language. The Arbitration and Conciliation Act, 1996, shall govern the arbitral proceedings. The award rendered by the arbitral tribunal shall be final and binding on the parties.
The reference to arbitration proceeding under this clause shall not;
(i) Affect the right of the employer to take possession of all or any tolls plants materials and stores in or upon the works of site thereof belonging to the contractor or procured by him and intended to be used for the execution of the work or any part thereof.
(ii) Preclude the employer from utilizing the materials purchased by the contractor in any work or from removing such materials to other places, Page 5 of 7 Downloaded on : Sun Apr 24 13:26:31 IST 2022 C/IAAP/173/2021 ORDER DATED: 18/02/2022 during the period the work is stopped or suspended in pursuance of notice given to the contractor.
(iii) Entitle the contractor to stop the progress of the work or the carrying out the additional or altered work."
7. On account of disputes or differences that have arisen between the parties at the first instance i.e. on 12.03.2021 (Annexure-N), petitioner has intimated the respondent about submission of the claim. On account of alleged delay and disruption on the part of the respondent and alleging causing loss to petitioner, on account of increased overheads and additional management cost at the site office and the head office. This was followed by yet another communication from petitioner to the respondent on 04.06.2021 (Annexure-O). Thereafter, on 16.08.2021 (Annexure-Q), petitioner has sought for dispute being resolved through arbitration and has suggested four names who are all retired officials of the Railways. Same has not been accepted by the respondent. In view of there being an agreement between the parties to resolve the disputes through arbitration, petition deserves to be allowed.
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C/IAAP/173/2021 ORDER DATED: 18/02/2022
8. Hence, the following ORDER
(i) Petition is allowed.
(ii) Hon'ble Justice J.M.Panchal (Retired), former Judge of Supreme Court of India, is hereby appointed as the sole Arbitrator to resolve the disputes between the parties in accordance with the Arbitration Centre (Domestic and International), High Court of Gujarat Rules, 2021. Both Parties would be governed by said Rules.
(iii) Registry to communicate this order to the sole Arbitrator forthwith by Speed Post.
(ARAVIND KUMAR, CJ) GAURAV J THAKER Page 7 of 7 Downloaded on : Sun Apr 24 13:26:31 IST 2022