Delhi High Court - Orders
Power Grid Corporation Of India Ltd vs Mirador Commercial Pvt. Ltd on 23 March, 2021
Author: Vibhu Bakhru
Bench: Vibhu Bakhru
$~24
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P.(T) 6/2020
POWER GRID CORPORATION OF
INDIA LTD. ..... Petitioner
Through: Mr Sudhir Nandrajog, Senior
Advocate with Ms Abiha Zaidi,
Advocate.
versus
MIRADOR COMMERCIAL PVT. LTD. ..... Respondent
Through: Mr Sanjib Sen, Senior Advocate with
Mr Ashok Kumar Jain and Mr Amit
Kasana, Advocates.
CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU
ORDER
% 23.03.2021
1. The petitioner has filed the present petition under Section 14 of the Arbitration and Conciliation Act, 1996 (hereafter the 'A&C Act'), inter alia, praying as under:
"(a) Pass an order terminating the mandate of the Arbitral Tribunal with Sole Arbitrator constituted by letter dated 20.10.2020, in terms of Section 14(2) read with Section 14(1)(a) of the Arbitration and Conciliation Act, 1996, on the ground that the said appointment is contravention of Clause 38 read with Clause 39 of the Contract Agreement.
(b) Declare that the invocation of arbitration by the Respondent its letter dated 17.02.2020 and reference to the Arbitral Tribunal with sole arbitrator by its letter dated 26.09.2020 under Clause 39 of the General Conditions of Contract of the Contract Signature Not Verified Digitally Signed By:DUSHYANT RAWAL Agreement dated 25.02.2010 for Tower Package-A2 for 765kV S/C Agra-Jattikalan Transmission Line (Part II) associated with 765kV System for Central part of Northern Grid, is pre-mature and invalid.
(c) Pass an order directing the Respondent to follow the mandatory procedure prescribed under Clause 38.2 of the General Conditions of Contract of the Contract Agreement dated 25.02.2010 for Tower Package-A2 for 765kV S/C Agra-Jattikalan Transmission Line (Part II) associated with 765kV System for Central part of Northern Grid."
2. The parties had entered into a Contract Agreement dated 25.02.2010 whereby the work for "Tower Package A2 for 765kV S/C Agra-Jattikalan Transmission Line (Part-II) associated with 765kV System for Central part of Northern Grid" was awarded to the respondent. The parties had, thereafter, entered into an Agreement on the same day, that is, 25.02.2010.
3. The respondent claims that it issued a letter dated 30.11.2016, invoking the Dispute Resolution Clause. The respondent claims that thereafter, the partiers made efforts to resolve the disputes. However, the same could not be resolved. This is disputed by the petitioner. The petitioner claims that several meetings were held between the representatives of the parties after 30.11.2016 and the respondent had abandoned the conciliation proceedings.
4. On 17.02.2020, the petitioner issued a notice invoking arbitration claiming a sum of ₹2,83,34,967/-. It also appointed its nominee Arbitrator (a former Judge of the Calcutta High Court). The respondent did not respond to the said notice within a period of sixty days. And, in terms of Clause 39 Signature Not Verified Digitally Signed By:DUSHYANT RAWAL of the General Conditions of the Contract, which are admittedly applicable to the Contract in this case, the respondent proceeded on the basis that nominee Arbitrator is the Sole Arbitrator.
5. Clauses 38 and 39 of the Agreement are relevant and read as under:
"I. Resolution of Disputes
38. Settlement of Disputes 38.1 If any dispute of any kind whatsoever shall arise between the Employer and the Contractor in connection with or arising out of the Contract, including without prejudice to the generality of the foregoing, any question regarding its existence, validity or termination, or the execution of the Facilities, whether during the progress of the Facilities or after their completion and whether before or after the termination abandonment or breach of the Contract, the parties shall seek to resolve any such dispute or difference, to the extent possible, amicably by mutual consultation.
38.2 If the parties fail to resolve such a dispute or difference by mutual consultation at the execution site level, then the dispute shall be referred by the Contractor to the Project Manager, who, within a period of thirty (30) days after being requested by Contractor to do so, shall give written notice of his decision.
38.2.1 The decision/instruction of the Project Manager shall be deemed to have been accepted by the Contractor unless notified by the Contractor of his intention to refer the matter for Arbitration, within thirty (30) days of such decision/instruction.
38.2.2 In the event the Project Manager fails to notify his decision as aforesaid within thirty (30) days, the Signature Not Verified Digitally Signed By:DUSHYANT RAWAL Contractor, if he intends to go for Arbitration, shall notify his intention to the Project Manager within 30 days of expiry of the first mentioned period of thirty days failing which it shall be deemed that there are no dispute or difference between the Employer and the Contractor.
38.3 In case of dispute or difference between the Employer and the Contractor, if the Employer intends to go for Arbitration, he shall notify such intention to the Contractor.
39. Arbitration 39.1 All disputes or differences in respect of which the decision, if any, of the Project Manager and/or the Head of the Implementing Authority has not become final or binding as aforesaid shall be settled by arbitration in the manner provided herein below:
39.2 The arbitration shall be conducted by three arbitrators, one each to be nominated by the Contractor and the Employer and the third to be appointed by both the arbitrators in accordance with the Indian Arbitration Act. If either of the parties fails to appoint its arbitrator within sixty (60) days after receipt of a notice from the other party invoking the Arbitration clause, the arbitrator appointed by the party invoking the arbitration clause shall become the sole arbitrator to conduct the arbitration.
39.3 The language of the arbitration proceedings and that of the documents and communications between the parties shall be English. The arbitration shall be conducted in accordance with the provisions of the Indian Arbitration and Conciliation Act, 1996 or any statutory modification thereof. The venue of arbitration shall be New Delhi.
39.4 The decision of the majority of the arbitrators shall be Signature Not Verified Digitally Signed By:DUSHYANT RAWAL final and binding upon the parties. In the event of any of the aforesaid arbitrators dying, neglecting, resigning or being unable to act for any reason, it will be lawful for the party concerned to nominate another arbitrator in place of the outgoing arbitrator.
39.5 During settlement of disputes and arbitration proceedings, both parties shall be obliged to carry out their respective obligations under the Contract."
6. Aggrieved by the same, the petitioner has filed the present petition.
7. After some arguments, the learned counsel for the parties state, on instructions, that the parties would have no objection if a Sole Arbitrator is appointed by this Court to adjudicate the disputes between the parties.
8. Mr Nandrajog, learned Senior Counsel appearing for the petitioner confirms that the petitioner waives any objection as to non-compliance of any pre-arbitration procedure/condition for invoking arbitration in the facts of this case and would proceed before the learned Arbitrator without any reservation.
9. Mr Sen, learned Senior Counsel appearing for the respondent also confirms the same.
10. In view of the above and with the consent of the parties, Justice V.K. Jain, a former Judge of this Court (Mobile No.- 9650116555) is appointed as the Sole Arbitrator to adjudicate the disputes between the parties. This is subject to the learned Arbitrator making the necessary disclosure under Section 12(1) of the A&C Act and not being ineligible under Section 12(5) of the A&C Act.
Signature Not Verified Digitally Signed By:DUSHYANT RAWAL11. The parties are at liberty to approach the learned Arbitrator for seeking his consent and the necessary disclosure.
12. Let the same be furnished before the next date of hearing.
13. List on 08.04.2021.
VIBHU BAKHRU, J MARCH 23, 2021 RK Signature Not Verified Digitally Signed By:DUSHYANT RAWAL