Delhi High Court - Orders
Aryan Infraheight (P) Ltd vs Tdi Infrastructure Limited on 19 January, 2023
Author: Navin Chawla
Bench: Navin Chawla
$~9
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB.P. 979/2022
ARYAN INFRAHEIGHT (P) LTD
..... Petitioner
Through: Mr.Rajiv Ranjan Mishra, Mr.Saurabh
& Mr.Sazeem Khan, Advs.
versus
TDI INFRASTRUCTURE LIMITED
..... Respondent
Through: Mr.Sidharth Arora, Adv.
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
ORDER
% 19.01.2023
1. This petition has been filed under section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') seeking appointment of an Arbitrator for adjudicating the disputes that have arisen between the parties in relation to the work awarded to the petitioner vide Work Order No.: EWS0001 dated 21.03.2017.
2. The disputes between the parties pertain to the alleged claim of payment of the petitioner from the respondent.
3. The Arbitration Agreement between the parties is contained in Clause 30 of the Work Order, which reads as under:-
"30 ARBITRATION:
The CONTRACTOR shall keep EMPLOYER indemnified against all fines, penalties, losses or damages etc. arising out of his non compliance. Any disputes / controversies in this respect will have to be met with by the CONTRACTOR at his own cost. The CONTRACTOR shall show proof of his compliance Signature Not Verified Digitally Signed By:SUNIL Signing Date:21.01.2023 18:58:24 to the TDI and it has been mutually agreed sole arbitrator for all dispute or difference finally decided by Chairman / Managing Director of TDI. In case of non settlement of dispute, action and proceeding arising out of the Contract the same shall be governed & decided as per Indian arbitration cancellation act 1996 with up to date amendments."
4. A dispute of non-payment having arisen between the parties, the petitioner invoked the Arbitration Agreement vide notice dated 30.04.2022. Having failed to elicit a response from the respondent, the present petition was filed.
5. On 21.12.2022, the learned counsel for the respondent submitted that the Arbitration Agreement between the parties is highly restricted and can be invoked only where there is a dispute with respect to any fine, penalty, loss or damages claimed by the respondent. Keeping in view the submission made, the following order was passed on 21.12.2022:-
"1. It is the case of the respondent that the Arbitration Agreement is restricted to a claim of the respondent/Employer to be indemnified against all fines, penalties, losses or damages, etc., arising out of the non-compliance of the contractor/petitioner. He prays for leave to seek instructions if the amounts that have been claimed by the petitioner have been withheld on any of the above accounts.
2. List on 19th January, 2023.
3. In case the respondent is wishing to contend that the amount claimed by the petitioner have not been withheld on any of the above accounts as mentioned in Clause 30 of the Work Order, the respondent shall file an affidavit in this regard at least two days in advance of the next date of hearing."
6. The respondent has filed an affidavit dated 13.01.2023 wherein, apart from reproducing the Arbitration Agreement, the respondent merely states Signature Not Verified Digitally Signed By:SUNIL Signing Date:21.01.2023 18:58:24 as under:-
"3. I state that a bare perusal of the said Arbitration Clause would reveal that the same can only be invoked by the Respondent Company to claim fines, penalties, losses or damages, if any suffered by the Respondent Company on account of the Petitioner's non compliances and not vice-versa. I state that the Petitioner is thus not entitled to invoke the clause 30 for reference of any dispute between the parties to Arbitration as the same would be beyond the purview of the said clause.
4. I further state that the Respondent Company reserves its rights to claim any amount suffered to them on account of fines, penalties, losses or damages etc suffered on account of Petitioner's non compliances or any other claim before the Appropriate Fora in accordance with law."
7. In my view, the respondent has not stated that the amount that has been withheld by it from payment to the petitioner, to which the petitioner is making a claim, has not been withheld against any claim of fine, penalty, loss or damages of the respondent arising out of alleged non-compliance of the Work Order by the petitioner. In that view, it would be an issue before the Arbitrator, if any amount is actually due and payable to the petitioner and, if so, if the same has been withheld against any claim of fine, penalty, loss or damage allegedly suffered by the respondent due to non-compliance of the agreement by the petitioner. This issue cannot be determined by this Court while exercising its limited jurisdiction under Section 11 of the Act.
8. In view of the above, I see no impediment in appointing an Arbitrator for adjudicating the disputes that have arisen between the parties in relation to the above Work Order.
9. I accordingly appoint Ms.Sukhbeer Kaur Bajwa, Advocate (Mobile:
Signature Not Verified Digitally Signed By:SUNIL Signing Date:21.01.2023 18:58:249818040158) as the Sole Arbitrator, who I am informed has been also appointed in relation to the other Work Order with respect to the same project.
10. At the request of the learned counsels for the parties, and without prejudice to the rights and contentions of the respondent, the parties are referred to the Delhi International Arbitration Centre (in short 'DIAC') for further proceedings of arbitration. For this purpose, the parties shall appear before the Coordinator of the DIAC on 1st February, 2023 at 2:00 PM. The parties and the Arbitration shall be governed by the DIAC Rules, including its fee structure. All contentions of the respondent shall remain open in such arbitration proceedings.
11. The petition is allowed in the above terms.
NAVIN CHAWLA, J JANUARY 19, 2023/rv Signature Not Verified Digitally Signed By:SUNIL Signing Date:21.01.2023 18:58:24