Manipur High Court
M/S. Simplex Infrastructures Ltd vs The State Of Manipur on 11 February, 2022
Author: Sanjay Kumar
Bench: Sanjay Kumar
Item No. 11
(Through Video Conferencing)
LAIREN Digitally signed
by
MAYUM LAIRENMAYUM IN THE HIGH COURT OF MANIPUR
INDRAJE INDRAJEET
SINGH AT IMPHAL
ET Date:
2022.02.14
SINGH 15:14:30 +05'30'
Arb. P.(J2) No. 1 of 2021
M/s. Simplex Infrastructures Ltd.,
through its Assistant General Manager,
"SIMPLEX HOUSE"
27, Shakeshpeare Sarani
Kolkata - 700017.
....Petitioner
- Versus -
1. The State of Manipur, represented by the Chief
Secretary/Commissioner (Works), Government of
Manipur, Secretariat, P.O. & P.S. Imphal, Imphal
West District, Manipur - 795001.
2. The Public Works Department, through its Chief
Engineer (Building), Manipur, Khuyathong, P.O. &
P.S. Imphal, Imphal West District,
Manipur - 795001.
3. The Executive Engineer, office at Executive
Engineer, Building Division No. I, PWD, Manipur,
Khuyathong, Imphal 795001.
...Respondents
BEFORE HON'BLE THE CHIEF JUSTICE MR. SANJAY KUMAR ]]]]]]]]]]]]] For the petitioner : Mr. S.D. Singh, Advocate Mr. Tayenjam Momo, Advocate For the respondents : Mr. R.K. Umakanta, G.A. Date of Order : 11.02.2022 [ [1] The petitioner company seeks appointment of a competent arbitrator to resolve its disputes with the State of Manipur and its Public Works Department, under Section 11(6) of the Arbitration & Conciliation Act, 1996.
Arb.P. (J2) No. 1 of 2021 Page 1 [2] The petitioner company is represented by Mr. Soumen Podder, its
Assistant General Manager. Resolution dated 15.02.2021 of the Board of Directors of the petitioner company authorizing him to deal with its arbitration matters before the Courts is placed on record.
[3] The petitioner company entered into Agreement dated 09.05.2006 with the State of Manipur for 'Design and Construction of the Capital Complex (High Court Component) at Mantripukhri, Imphal'. Clause 38 of the said agreement is titled 'Settlement of Disputes and Arbitration'. It provides to the effect that in the event the contractor, viz., the petitioner company, has any dispute as to a matter connected with or arising out of the agreement, it has to approach the Engineer-in-charge in the first instance and if his decision is found unacceptable, it has to request the Superintending Engineer in writing for his decision. This decision is to be rendered within a period of one month from the receipt of the contractor's letter. In the event the Superintending Engineer fails to give his decision within this time frame or if the contractor is dissatisfied with such decision, the contractor is provided with the remedy of appeal to the Chief Engineer against the decision of the Superintending Engineer. The Chief Engineer, in turn, is to offer an opportunity of hearing to the contractor and render his decision within 30 days of the receipt of the appeal. Thereafter, if the contractor is dissatisfied with such decision, he is given 30 days to give notice to the Chief Engineer for appointment of an arbitrator. The clause further provides that no one other than a person appointed by the Chief Engineer, PWD, Manipur, or the Works Department, Government of Manipur, should act as an arbitrator and if, for any reason, that is not possible, the matter should not be Arb.P. (J2) No. 1 of 2021 Page 2 referred to arbitration at all. However, the clause also states that the arbitration should be conducted in accordance with the provisions of the Arbitration & Conciliation Act, 1996 (hereinafter, 'the Act of 1996'), or any statutory modifications or re-enactment thereof and the rules made thereunder. [4] A dispute having arisen vis-à-vis the amounts allegedly due to it under various heads after completion of the work, the petitioner company addressed Notice dated 14.01.2020 to the Executive Engineer, Building Division No. 1, PWD, Government of Manipur, raising a claim for a sum of ₹. 3,605.62 Lakh. As there was no response thereto, the petitioner company addressed letter dated 08.10.2020 to the Superintending Engineer-II, PWD, Government of Manipur, complaining of inaction on its letter dated 14.01.2020 and requesting his decision in terms of Clause 38 of the agreement. The petitioner company then addressed letter dated 11.11.2020 to the Chief Engineer, PWD, Government of Manipur, referring to its earlier letters dated 14.01.2020 and 08.10.2020 and stating that no action had been taken thereon. The petitioner company solicited an early decision from the Chief Engineer, but to no avail. Finally, Arbitration Notice dated 22.12.2020 was addressed by the petitioner company to the Chief Engineer, PWD, Government of Manipur. Therein, the petitioner company referred to the earlier correspondence on the issue and stated that as it had not received any response from the Chief Engineer within 30 days, the dispute may be referred to a sole arbitrator for resolution. The petitioner company also pointed out therein that the Act of 1996 had undergone amendment and a departmental officer could not act as an arbitrator. The petitioner company asked the Chief Engineer to suggest a panel of arbitrators Arb.P. (J2) No. 1 of 2021 Page 3 so that a sole arbitrator could be selected therefrom. As no action was taken pursuant to its plea, the petitioner company filed the present application under Section 11(6) of the Act of 1996.
[5] Affidavit-in-opposition dated 16.11.2021 was filed by the Under Secretary (Works), Government of Manipur, Therein, while admitting the existence of an arbitration agreement in Clause 38, the Under Secretary asserted that the delay on the part of the petitioner company in seeking settlement of its disputes warranted rejection of its prayer for appointment of an arbitrator.
Rejoinder dated 21.01.2022 was filed by the petitioner company contesting this claim and reiterating its prayer.
[6] Heard Mr. S.D. Singh, learned counsel, assisted by Mr. Tayenjam Momo, learned counsel, appearing for the petitioner company; and Mr. R.K. Umakanta, learned Government Advocate, appearing for the respondents. [7] Given the consensus between the parties as to the existence of an arbitration agreement in Clause 38, referred to hereinabove, the only point that remains for consideration is whether an arbitrator can be appointed by this Court in exercise of power under Section 11(6) of the Act of 1996.
Mr. R.K. Umakanta, learned Government Advocate, would contend that the delay on the part of the petitioner company in seeking resolution of its disputes would be fatal to its claim. However, it is not for this Court to examine the validity of such a plea while exercising power under Section 11(6) of the Act of 1996. It may be noted that the Act of 1996 was amended by the Arbitration and Conciliation (Amendment Act), 2015 (Act 3 of 2016), with retrospective effect from 23.10.2015 and Section 11 (6-A) was inserted therein. It provides Arb.P. (J2) No. 1 of 2021 Page 4 to the effect that the High Court, while considering an application under Section 11(6), shall confine itself to the existence of an arbitration agreement. In Uttarakhand Purv Sainik Kalyan Nigam Limited Vs. Northern Coal Field Limited [(2020) 2 SCC 455], the Supreme Court made it clear that after the insertion of Section 11(6-A) in the Act of 1996, the Court dealing with an application under Section 11(6) of the Act of 1996 should confine itself only to examination of the existence of an arbitration agreement and no more. Therefore, all other issues are to be left open to be decided by the arbitrator, including his/her own jurisdiction and any other preliminary issue. That being so, the respondents would be at liberty to raise all such issues, including the question of limitation, before the arbitrator as this Court cannot go into the tenability or otherwise of the petitioner company's claims at this stage. [8] Further, in the light of the amendment of the Act of 1996 by Act 3 of 2016, a departmental or internal arbitrator cannot be appointed. This issue stands settled by the Supreme Court's edict in Perkins Eastman Architects DPC and another Vs. HSCC (India) Ltd. [AIR 2020 SC 59]. Therefore, it is no longer open to the respondents to appoint an internal arbitrator to resolve the issues raised by the petitioner company. Notably, when the Chief Engineer was asked by the petitioner company to suggest a panel of arbitrators so that the parties could choose a sole arbitrator therefrom, he failed to respond thereto and it is this inaction that constrained the petitioner company to come before this Court by way of the present petition. Therefore, this Court would be at liberty to appoint an external arbitrator, as prayed for by the petitioner company, in exercise of power under Section 11(6) of the Act of 1996.
Arb.P. (J2) No. 1 of 2021 Page 5 [9] This petition is accordingly allowed. Hon'ble Mr. Justice R. Subhash
Reddy (Retired), Judge, Supreme Court of India, is appointed as the sole arbitrator to resolve the disputes and differences between the parties, arising out of and/or relating to their Agreement dated 09.05.2006, as per the provisions and procedure of the Act of 1996. It is made clear that all issues are left open, including the issue of limitation.
Registry is directed to forthwith communicate a copy of this order to Hon'ble Mr. Justice R. Subhash Reddy (Retired), Judge, Supreme Court of India, residing at Plot No.193, Road No. 10C, MLAs & MPs Colony, Jubilee Hills, Hyderabad - 500033 (Contact Number: 040-23545058).
CHIEF JUSTICE
Indrajeet
Arb.P. (J2) No. 1 of 2021 Page 6