Calcutta High Court
Texmaco Rail And Engineering Ltd vs Bengaladesh Railway Rep. By The Project on 3 February, 2022
Author: Ravi Krishan Kapur
Bench: Ravi Krishan Kapur
ODC-5
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
(Via Video Conference)
AP/26/2022
TEXMACO RAIL AND ENGINEERING LTD
VS
BENGALADESH RAILWAY REP. BY THE PROJECT
DIRECTOR REHABILITATION OF KULAURA SHAHBAZPUR SECTION
BEFORE:
The Hon'ble JUSTICE RAVI KRISHAN KAPUR
Date : 3rd February, 2022.
Appearance:
Mr. Dhruba Ghosh, Sr. Adv.
Mr. Rajarshi Dutta, Adv.
Mr. V.V.V. Sastry, Adv.
Mr. Nischay Mall, Adv.
The Court : A supplementary affidavit filed on behalf of the petitioner be
kept with the records. The petitioner also hands over a copy of a letter dated 3rd
February, 2022 written by the Project Director of the respondent. Liberty is
granted to the petitioner to file a supplementary affidavit enclosing the said letter.
This is an application under Section 9 of the Arbitration and Conciliation Act, 1996 ('the Act'). The disputes between the parties arise out of an agreement dated 15th November, 2017 for a project of rehabilitation of MG Railway Section in Bangladesh. The respondent is a State-owned rail transport Agency of the People's Republic of Bangladesh. Pursuant to a global tender floated by the respondent, the petitioner had submitted a bid and was ultimately awarded the contract and a letter of Notification of Award dated 31st October 2017 was also 2 issued in favour of the petitioner. In compliance with the terms and conditions of the contract, the petitioner has duly furnished two separate bank guarantees.
It is alleged on behalf of the petitioner that despite complying with all its obligations under the contract, there has been a resultant delay in commencement of work in the execution of the project primarily on the grounds enumerated in paragraph 17 of the petition. Admittedly, the contract between the parties envisages extension of the intended completion date of the contract. The parties have also entered into diverse discussions between December, 2019 and 7th December, 2021. It appears that, as a consequence of the joint meetings held between the parties, the original schedule commercial operational day had been extended from 7th May 2020 to 31st December, 2022. By a letter dated 5th January, 2020, the petitioner, inter-alia, informed the respondent as to the reasons for the delay which were beyond the control of the petitioner. Accordingly, the petitioner has also claimed for price variation in terms of clause 72.1 of the contract. It is alleged that instead of replying to the communication of the petitioner, the respondent had suddenly issued a letter dated 10th January, 2022 completely ignoring the petitioner's requests and instead insisting that the petitioner complete its activities forthwith.
In view of the aforesaid, the petitioner has been compelled to file the instant petition, inter alia, restraining the respondent from taking any coercive steps relating to the concerned project without considering the representation made on behalf of the petitioner.
At the outset, I find that this is an 'international commercial arbitration' within the meaning of the Act. I also find that this High Court has jurisdiction to 3 entertain, try and determine this application in terms of Section 2(1)(e)(ii) the Act. I also find that Section 2(2) of the Act permits filing of application under Section 9 of the Act even if the place of arbitration is outside India and the arbitral award is to be made in such place. This view is also supported by the decisions reported in 2020 SCC Online Del 1713 (Big Charter Private Limited vs. Ezen Aviation Pty. Ltd. and Others), paragraphs 57to 63, 66 to 70, 73 and 74 and 2016 SCC Online Del 5521 (Raffles Design International India Private Limited & Anr. vs. Educomp Professional Education Limited & Ors.) paragraphs 67 to 72, 85 to 87 and 89 to 96.
Notwithstanding service having been effected on the respondent, none appears on behalf of the respondent nor is any accommodation prayed for on their behalf.
I do not find that the respondent has taken any positive steps in terms of the letter dated 10th January, 2022 to terminate the contract till date. Keeping in mind that this is a contract for infrastructure and development, it is essential to ascertain whether the respondent is interested in continuing the contract with the petitioner or not. Accordingly, at this stage the petitioner appears to have a strong prima facie case on merits. The balance of convenience is also in favour of orders being passed as prayed for herein.
In view of the aforesaid, there shall be an order of injunction in terms of prayer (c) of the Notice of Motion. The respondent is restrained from taking any coercive steps against the respondent relating to the said project without consideration of the representations made by the petitioner. 4
This order is being passed on the condition that the petitioner undertakes to extend the validity of the bank guarantees furnished under the contract which are due to expire on 6th February, 2022 till December, 2022. This is also in conformity with the letters issued by the respondent. Significantly, it is categorically stated in the letter dated 3rd February, 2022 that the respondent would not invoke the bank guarantees if the same are extended. Let this matter appear on 7th February, 2022.
The Advocates appearing on behalf of the petitioner are forthwith directed to serve a notice on the respondent who are requested to ensure representation on the returnable date.
(RAVI KRISHAN KAPUR, J.) S.Bag