Calcutta High Court
Hindustan Construction Company ... vs Kolkata Metropolitan Development ... on 29 November, 2016
Author: Soumen Sen
Bench: Soumen Sen
ORDER SHEET
AP No.957 of 2016
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
HINDUSTAN CONSTRUCTION COMPANY LIMITED
Versus
KOLKATA METROPOLITAN DEVELOPMENT AUTHORITY
BEFORE:
The Hon'ble JUSTICE SOUMEN SEN
Date : 29th November, 2016.
Appearance:
Mr. Samrat Sen, Sr.Adv.
Mr. Ayan Banerjee, Adv.
Mr. Arijit Bhowmick, Adv.
...for the petitioner.
Mr. Sirsanya Bandhopadhyay, Adv.
The Court : This is an application for appointment of an Arbitrator. There is no
dispute either as to the existence of the arbitration or that the disputes arisen out of the
said arbitration agreement are decided and required to be resolved. It is not in dispute
that the petitioner has raised certain disputes and a notice dated 23rd August, 2016 for
appointment of an Arbitrator has duly been received by the respondent. The
respondent, however, did not reply to the said notice nor has concurred to the said appointment and as a result whereof, this application is filed for appointment of an Arbitrator on the basis of the arbitration agreement.
Mr. Sirsanya Bandhopadhyay, learned Advocate representing the respondent, submits that the dispute is not referable to arbitration as the petitioner has accepted the contract price and after having accepted the said price is not entitled to raise any objection with regard to additional claims. Mr. Bandhopadhyay has also referred to a 2 proceeding pending before the Writ Court whereof a tender with regard to the construction of the fly over is pending. It is submitted that the petitioner has also submitted its claim before the Writ Court and the said proceeding is pending. In addition to the above, Mr. Bandhopadhyay submits that by reason of deletion of Clause 41.3, the parties have clearly waived their rights to have the dispute resolved through the mechanism of arbitration. In order to appreciate the said objection, it is necessary to refer to the settlement of dispute clause, namely, Clause 41.1, 41.2 and 41.3 which reads as follows:
SETTLEMENT OF DISPUTES 41.1 Employer's Decision: If a dispute of any kind whatsoever arises between the Employer and the Contractor in connection with, or arising out of the Project or the execution of the Construction Works, whether during the execution of the Works or after their completion and whether before or after repudiation or other termination of the Contract Agreement, including any dispute as to any opinion, instruction, determination, certificate or valuation of the Engineer In Charge, the matter in dispute shall, in the first place, be referred in writing to the Engineer In Charge, with a copy to the other party. All the disputes will be settled by the Employer with the help of Engineer In Charge and Employer's decision will be final and binding to all.
41.2 Amicable Settlement: Where notice of intention to commence arbitration as to a dispute has been given in accordance with above Sub-
Clause the parties shall attempt to settle such 3 dispute amicably before the commencement of arbitration. Provided that, unless the parties otherwise agree, arbitration may be commenced on or after the fifty-sixth (56th) day after the day on which notice of intention to commence arbitration of such dispute was given, even if no attempt at amicable settlement thereof has been made.
41.3 Arbitration: Any dispute in respect of which:
(a) the decision, if any, of the Engineer Incharge/Employer has not become final and binding pursuant to Sub-Clause 41.1 and
(a) amicable settlement has not been reached within the period stated in Sub-Clause 41.2, Shall be finally settled, unless otherwise specified in the Contract, under the Rules of Indian Arbitration Act 1996 by one or more arbitrators appointed under such Rules. The said arbitrator/s shall have full power to open up, review and revise any decision, opinion, instruction, determination, certificate or valuation of Engineer Incharge/Employer related to the dispute.
The Arbitral Tribunal shall conduct the arbitration proceedings in accordance with the provisions of Arbitration and Conciliation Act, 1996 of any statutory modification or enactment thereof and the rules framed there 4 under. It is term of the contract that the party invoking arbitration shall specify the dispute or disputes to be referred to arbitration under this clause together with the amount or amounts to be claimed in the contract.
The awards so made by the Arbitral Tribunal shall be final and binding on the parties and shall be enforced under the provisions of Code of Civil Procedure, 1908 in the same manner as if it were a decree of the court. The arbitration proceedings shall be conducted in Kolkata only. The arbitration under this clause shall be condition precedent to any right of the action under this contract.
Clause 41.2 clearly mentions that in the event the parties have failed to amicably settle their dispute, arbitration may be commenced. The intention of the parties to have the dispute resolved through arbitration is manifest from Clause 41.2 and, in my view, the deletion of Clause 41.3 would not make any difference.
Under such circumstances, the objection raised that the disputes cannot be referred to the arbitration is not accepted. However, it does not mean that objection with regard to the excepted matter cannot be raised before the arbitrator.
Learned counsel appearing for the petitioner, however, submits that the nature of disputes in both the proceedings are not same inasmuch as the petitioner has not waived its rights to make future claims and the present claim is on account of losses sustained by the petitioner due to various delays attributable to the respondent for the works executed in the stipulated period of contract.
In my view, there is a dispute which is required to be adjudicated in the arbitration proceeding. The Court, at this stage, is not required to go into the merits of 5 the claim but to be satisfied that there is an existence an arbitration agreement. It cannot be said that there is no dispute which calls for a reference.
The parties have consented to the appointment of the Hon'ble Justice Aloke Chakrabarti (Retired), as Arbitrator. Under such circumstances, the Hon'ble Justice Aloke Chakrabarti (Retired), is appointed as Arbitrator. Commensurate remuneration of the learned Arbitrator shall be decided by the learned Arbitrator at the first sitting of the arbitration preferably on a consolidated basis rather than per sitting. The Arbitrator is requested to conclude the reference within a period of 10 months of the statement of claim being lodged before him.
AP No.957 of 2016 is, accordingly, disposed of. There shall be no order as to costs.
Urgent photostat certified copy of this order, if applied for, be supplied to the parties subject to the compliance with all requisite formalities.
(SOUMEN SEN, J.) B.Pal