Madras High Court
Anand Constructions vs / on 1 February, 2022
Author: Senthilkumar Ramamoorthy
Bench: Senthilkumar Ramamoorthy
Arb.O.P.(Comm.Div).No.82 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 01.02.2022
Coram:
THE HONOURABLE MR. JUSTICE SENTHILKUMAR RAMAMOORTHY
Arbitration Original Petition (Comm.Div).No.82 of 2021
Anand Constructions,
Rep. by its Sole Proprietor K.Kumar,
No.9/19, Muthiyal Chetty Street,
Purasaiwalkam, Chennai – 7. ... Petitioner
/versus/
1. The Govt of India,
Rep.by the Engineer in Chief,
Directorate of Contract Management,
Integrated Head Quarters of MOD (ARMY),
Kasmir House, Rajaji Marg,
New Delhi – 110 011.
2. The Chief Engineer,
Air Force,
No.2, DC Area, MES Road,
Bengaluru – 560 022. ... Respondents
Prayer: This Arbitration Original Petition is filed under Section 11(6) of the
Arbitration and Conciliation Act, 1996 praying to appoint a qualified person as an
Arbitrator to adjudicate the disputes between the petitioner and 2 nd respondent in
terms of the arbitration agreement dated 28.04.2015 at Chennai and direct the
respondents to pay the costs.
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Arb.O.P.(Comm.Div).No.82 of 2021
For Petitioner : Mr.D.Senthil Kumar
For Respondents : Mr.K.S.Jeyaganeshan
ORDER
The petitioner seeks constitution of arbitral tribunal to resolve the disputes between the Petitioner and respondents.
2. Pursuant to a tender floated by the respondents, the petitioner was declared as the successful tenderer. Accordingly, a contract was awarded to the petitioner for a total sum of Rs.3,15,01,105/-. Upon execution of work under the contract, the petitioner states that the final bill and other amounts due for executed work were not paid by the respondents. According to the petitioner, the 2 nd respondent is liable to pay a sum of Rs.99,87,830/- towards the final bill, deviation orders and other claims along with interest thereon. The petitioner cites Condition No.70 of the General Conditions of Contract. The said clause is as under:
“70. Arbitration:- All disputes, between the parties to the Contract(other than those for which the decision of the C.W.E. or any other person is by the Contract expressed to be final and binding) shall, after written notice by either __________ Page 2 of 8 https://www.mhc.tn.gov.in/judis Arb.O.P.(Comm.Div).No.82 of 2021 party to the Contract to the other of them, be referred to the sole arbitration of an Engineer officer to be appointed by the authority mentioned in the tender documents.
Unless both parties agree in writing such reference shall not take place until after the completion or alleged completion of the Work or termination or determination of the Contract under Condition Nos. 55, 56 and 57 hereof.
Provided that in the event of abandonment of the Works or cancellation of the Contract under Condition Nos. 52, 53 or 54 hereof, such reference shall not take place until alternative arrangements have been finalized by the Government to get the Works completed by or through any other Contractor or Contractors or Agency or Agencies.
Provided always that commencement or continuance of any arbitration proceeding hereunder or otherwise shall not in any manner militate against the Government's right of recovery from the contractor as provided in Condition 67 hereof.
If the Arbitrator so appointed resigns his appointment or vacates his office or is unable or unwilling to act due to any reason whatsoever, the authority appointing him may appoint a new Arbitrator to act in his __________ Page 3 of 8 https://www.mhc.tn.gov.in/judis Arb.O.P.(Comm.Div).No.82 of 2021 place.
The Arbitrator shall be deemed to have entered on the reference on the date he issues notice to both the parties, asking them to submit to him their statement of the case and pleadings in defence.
The Arbitrator may proceed with the arbitration, exparte, if either party, inspite of a notice from the Arbitrator fails to take part in the proceedings.
The Arbitrator may, from time to time with the consent of the parties, enlarge, the time upto but not exceeding one year from the date of his entering on the reference, for making and publishing the award.
The Arbitrator shall give his award within a period of six months from the date of his entering on the reference or within the extended time as the case may be on all matters referred to him and shall indicate his findings, along with sums awarded, separately on each individual item of dispute.
The venue of Arbitration shall be such place or places as may be fixed by the Arbitrator in his sole discretion.
__________ Page 4 of 8 https://www.mhc.tn.gov.in/judis Arb.O.P.(Comm.Div).No.82 of 2021 The award of the Arbitrator shall be final and binding on both parties to the Contract.”
3. In addition, the petitioner also relies upon clause 7(b) of the tender documents, which is as under:
“7. Should this tender be accepted:-
(a).....
(b). To execute all the works referred to in the said documents upon the terms and Conditions contained/referred to therein and as detailed In the General Summary and to carry out such deviations as may be ordered vide condition 7 of IAFW-2249 upto maximum of TEN PERCENT and further agree to refer all disputes as required by condition 70 of IAFW-2249 to the Sole Arbitration of a serving officer having degree in Engineering or equivalent or having passed final/direct final examination of sub division II of Institution of .Surveyors (India) recognized by the Government of India, to be appointed by the Engineer-In-Chief, Army HQ, New Delhi- 110 011 or in his absence, the officer officiating as Engineer-in-Chief or Director General of Works, if specifically delegated in writing by Engineer-in-Chief, whose decision shall be final, conclusive and binding.”
4. Upon receipt of notice, an endeavour was made by the parties to __________ Page 5 of 8 https://www.mhc.tn.gov.in/judis Arb.O.P.(Comm.Div).No.82 of 2021 arrive at a settlement. However, the said endeavour was not successful. The respondents have filed a counter. In the said counter, the claims made by the petitioner are denied. The respondents object to the request for the constitution of an arbitral tribunal on the ground that the legitimate dues of the petitioner were settled.
5. Thus, it appears that the respondents are disputing the claims made by the petitioner on merits. Such objections do not constitute a valid reason to reject the request for appointment of an arbitrator. However, it is open to the respondents to raise such objections before the Arbitral Tribunal.
6. For the reasons set out above, Arbitration Original Petition No.82 of 2021 is allowed by appointing Mr.K.D.Arcot, U-46, Plot No.4185, Anna Nagar, Chennai – 600 040 (Mobile No.+91-98401 26439) as the Sole Arbitrator. The Sole Arbitrator is directed to enter upon reference and adjudicate the dispute in accordance with law. It is open to the Sole Arbitrator to fix the fees and expenses in relation to the arbitral proceedings.
01.02.2022
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Arb.O.P.(Comm.Div).No.82 of 2021
Index : Yes/No.
Internet : Yes/No.
bsm
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Arb.O.P.(Comm.Div).No.82 of 2021
SENTHILKUMAR RAMAMOORTHY J,
bsm
Arb.O.P.(Comm.Div).No. 82 of 2021
01.02.2022
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