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Hindustan Construction Company ... vs Delhi Metro Rail Corporation Limited on 15 February, 2023

Author: Yashwant Varma

Bench: Yashwant Varma

                    $~1
                    *     IN THE HIGH COURT OF DELHI AT NEW DELHI
                    +     ARB.P. 1349/2022
                          HINDUSTAN CONSTRUCTION COMPANY LIMITED
                                                              ..... Petitioner
                                      Through: Dr. Amit George, Mr. Rishi
                                               Agrawala, Ms. Suruchi Arora
                                               and Mr. Rayadurgam Bharat,
                                               Advs.

                                              versus

                          DELHI METRO RAIL CORPORATION LIMITED
                                                             ..... Respondent
                                       Through: Mr. Tarun Johri, Mr. Ankur
                                                Gupta and Mr. Vishwajeet
                                                Tyagi, Advs.

                          CORAM:
                          HON'BLE MR. JUSTICE YASHWANT VARMA
                                              ORDER

% 15.02.2023

1. The instant petition preferred under Section 11 of the Arbitration and Conciliation Act, 1996 [the Act] seeks to invoke the jurisdiction of the Court for constitution of an Arbitral Tribunal in light of the disputes which have arisen between parties. It appears from the record that the petitioner had issued a notice of disputes on 19 June 2019. On 20 August 2019, the petitioner issued a notice of conciliation in respect of Claim Nos. 1 and 2 upon the amicable settlement process having failed to bear any fruits. It, thereafter, appears that the respondent Delhi Metro Rail Corporation [DMRC] by its letter of 06 July 2021 forwarded the name of three Conciliators with the option open to the petitioner to choose one out of the panel so provided. The petitioner, thereafter, nominated a Conciliator from the panel so provided by the respondent on 03 August 2021.

2. Undisputedly, during the pendency of the conciliation Digitally Signed By:NEHA Signing Date:16.02.2023 17:07:22 proceedings, the petitioner itself had requested DMRC to keep further proceedings in respect of arbitration in abeyance. The conciliation proceedings do not appear to have borne fruit and, consequently, on 21 September 2022 the petitioner nominated a named Arbitrator from its side. DMRC, on 19 October 2022, provided a panel of five Arbitrators from out of the list maintained by it for the consideration of the petitioner.

3. It is, thereafter, that the present petition came to be filed with the petitioner contending that since DMRC had failed to act accordance with the appointment procedure as well as the decision by the Supreme Court in Voestalpine Schienen GMBH v. Delhi Metro Rail Corporation Limited [(2017) 4 SCC 665], the nomination power as vested in them stood forfeited and the appointment would have to be made by the Court itself.

4. Dr. George has in support of the contentions addressed on this petition also drawn the attention of the Court to the judgment rendered by two learned Judges of the Court in NCCL-PREMCO (JV) v. Rail Vikas Nigam Ltd. [2018 SCC OnLine Del 11926] and Gangotri Enterprises v. General Manager Northern Railways [2022 SCC OnLine Del 3556]. It was his submission that the failure of the respondent to have provided the entire panel maintained by it for the consideration of the petitioner clearly amounts to it having failed to act in terms of the procedure prescribed and, consequently, the right as conferred on it stands forfeited. It was also submitted that notwithstanding the request of the petitioner itself for placing further steps to be taken in respect of arbitration in abeyance pending conciliation, the nomination made by it on 21 September 2022 is, in any case, open to be reiterated even today.

5. Mr. Johri, learned counsel appearing for the DMRC, on the other hand, has sought to draw sustenance from the judgment rendered Signature Not Verified Digitally Signed By:NEHA Signing Date:16.02.2023 17:07:22 by the Court in Pacific Development Corporation Limited v. Delhi Metro Rail Corporation Ltd. [2023 SCC OnLine Del 521] and contends that the nomination made by the petitioner unilaterally cannot be countenanced in law since at that time it could not be said that the respondent had failed to act in terms of the appointment procedure as prescribed. It was submitted that the matter can be duly resolved in light of the procedure which was formulated by the Court in Pacific Development.

6. However, before the Court takes up the petition for final disposal again, it would appear to be expedient in the interest of justice if the DMRC is required to furnish for the consideration of the petitioner the updated panel of the Arbitrators which is maintained by it. Let the said panel be taken into consideration by the petitioner without prejudice to its rights and contentions raised in the present petition.

7. Let the matter be called again on 13.03.2023.

YASHWANT VARMA, J.

FEBRUARY 15, 2023 SU Signature Not Verified Digitally Signed By:NEHA Signing Date:16.02.2023 17:07:22