Delhi High Court - Orders
Sara Buildmart Pvt. Ltd vs Delhi Sikh Gurudwara Management ... on 23 May, 2023
Author: Prateek Jalan
Bench: Prateek Jalan
$~44 and 45
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB.P. 378/2023
SARA BUILDMART PVT. LTD ..... Petitioner
versus
DELHI SIKH GURUDWARA MANAGEMENT COMMITTEE
..... Respondent
+ ARB.P. 404/2023
SARA BUILDMART PVT LTD ..... Petitioner
versus
DELHI SIKH GURUDWARA MANAGEMENT COMMITTEE
..... Respondent
Appearances:- Ms. Pyari, Advocate for Sara Buildmart Pvt. Ltd. in
Item No. 44. [M:-9643190438, Enrol No. 10715/2021].
Mr. Tarun Diwan, Advocate for Sara Buildmart Pvt.
Ltd. in Item No. 45. [M:-9999779373, Enrol No.
D/527/1996]
Mr. Abhinash Kumar Mishra, Advocate for Delhi Sikh
Gurudwara Management Committee in Item Nos. 44 &
45.
CORAM:
HON'BLE MR. JUSTICE PRATEEK JALAN
ORDER
% 23.05.2023
1. These two petitions under Section 11 of the Arbitration and Conciliation Act, 1996 ["the Act"], have been filed for appointment of ARB.P.378/2023 & ARB.P. 404/2023 Page 1 of 6 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 25/09/2023 at 00:08:14 arbitrators under two different contracts between the same parties.
2. ARB.P. 378/2023 is in respect of a Construction Work Contract dated 08.08.2012, which contains an arbitration clause in the General Conditions of Contract [at page No. 53 of the petition]. New Delhi has been designated as the venue of the arbitration. Disputes having arisen between the parties, petitioner has invoked the arbitration clause by a legal notice dated 20.02.2023, claiming a sum of Rs. 1,96,78,620/-, and invoking arbitration proceedings on account of respondent's failure to make the payment.
3. In ARB.P. 404/2023, the contract was signed between the parties pursuant to a tender dated 11.03.2011 issued by the respondent for construction of a school building in Karol Bagh, New Delhi. In this case, the tender document contains an arbitration clause [Clause 4.4.2.1], which provides for resolution of disputes by a sole arbitrator. By Clause 4.4.2.4, New Delhi has been designated as the venue of arbitration. The petitioner invoked arbitration clause by a legal notice dated 14.02.2023, in which the petitioner's claims were quantified at Rs. 2,03,62,170/- with further interest thereupon.
4. As no reply was received to the legal notices in both the cases, the petitioner has filed these petitions under Section 11 of the Act.
5. Mr. Tarun Diwan, learned counsel for petitioner, submits that, although the arbitration clauses in both agreements provides for appointment of arbitrator by the President of the respondent, such unilateral appointment is impermissible in view of the judgments of the Supreme Court inter alia in TRF Limited vs. Energo Engineering Projects Limited [(2017) 8 SCC 377] and Perkins Eastman Architects DPC & ARB.P.378/2023 & ARB.P. 404/2023 Page 2 of 6 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 25/09/2023 at 00:08:14 Another vs. HSCC (India) Limited [(2020) 20 SCC 760].
6. Mr. Abhinash Kumar Mishra, learned counsel for respondent, submits that, as far as ARB.P. 378/2023 is concerned, respondent does not dispute the existence of the arbitration clause. However, he submits that, in the Work Order dated 24.03.2011, issued pursuant to the tender document dated 11.03.2011 (in ARB.P. 404/2023), there is no arbitration clause. Instead, Clause 7 provides for a final and binding decision in any dispute to be rendered by the President of respondent. Subject to this objection, Mr. Mishra does not contest the appointment of an arbitrator, but reserves the right of respondent to take all objections on maintainability including limitation, and on merits before the learned arbitrator.
7. As far as ARB.P. 404/2023 is concerned, I do not find merit in the objection relating to the non-existence of the arbitration clause. The contractual process commenced with a tender dated 11.03.2011 issued by respondent. The said document admittedly contains an arbitration clause. A bid was submitted by the petitioner, in the course of which the petitioner signified its assent to the terms of tender by signing on each page thereof [naturally, including the arbitration clause]. The petitioner's bid was, thereafter, accepted by the respondent by a communication dated 24.03.2011 [Document No.5 annexed to ARB.P. 404/2023]. The aforesaid communication refers to the petitioner's tender dated 15.03.2011, and states that the tender has been approved, subject to various conditions enumerated in paragraph 2 of the said letter. There is no intention expressed to supersede the arbitration clause. Clause 7 of the aforesaid letter dated 24.03.2011, read with clause 4.4.2.1 of the tender document ARB.P.378/2023 & ARB.P. 404/2023 Page 3 of 6 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 25/09/2023 at 00:08:15 dated 11.03.2011, at best, provides for arbitration by the President of respondent, or an arbitrator to be appointed by the respondent. This appointment mechanism, having been rendered impermissible by the judgments of the Supreme Court inter alia in TRF (supra) and Perkins Eastman (supra), I am of the view that the petitioner has prima facie established existence of an arbitration agreement by exchange of correspondence, which is sufficient for the purpose of Section 7(4)(b) of the Act.
8. In view of the above, existence of the arbitration agreements and due invocation thereof being established, the petitions are liable to succeed.
9. Mr. Mishra, however, submits that, prior to reference of disputes to arbitration, parties may also be referred to mediation, to see if a mutually acceptable resolution of disputes is possible. Mr. Diwan is agreeable to this suggestion.
10. Having regard to the aforesaid submissions, the petitions are disposed of with the following directions:-
a. The parties are referred to mediation under the aegis of Samadhan, the Delhi High Court Mediation and Conciliation Centre, Shershah Road, Delhi-110503. The parties will appear before the learned Mediator on 29.05.2023 at 03:00 PM.
b. In the event mediation proceedings are unsuccessful, disputes under the Construction Work Contract dated 08.08.2012, and tender dated 11.03.2011, read with the Work Order dated 24.03.2011, will be adjudicated by arbitration of Hon'ble Ms. ARB.P.378/2023 & ARB.P. 404/2023 Page 4 of 6 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 25/09/2023 at 00:08:15 Justice Asha Menon, a former Judge of this Court [Tel:-
(+91) 9910384664].
c. The arbitrations will be held under the aegis of the Delhi International Arbitration Centre, Delhi High Court, Shershah Road, Delhi-110503 ["DIAC"], and will be governed by the Rules of DIAC, including as to the remuneration of the learned Arbitrator.
d. The learned Arbitrator is requested to furnish a declaration in terms of Section 12 of the Act, prior to entering upon the references.
e. It is made clear that the arbitrations under the two agreements are to be treated as independent arbitrations for all purposes, although a common Arbitrator has been appointed at the request of learned counsel for parties.
f. DIAC is requested to defer the proceedings until 15.08.2023 to give parties an opportunity to settle their disputes in mediation. In the event parties require further time to settle their disputes, they may jointly approach DIAC for further deferment. Conversely, if the mediation proceedings are closed unsuccessfully prior to 15.08.2023, either party may approach DIAC to enter into the references forthwith. g. The parties will be entitled to raise independent claims/counterclaims and defences in each of the arbitration proceedings.
h. It is made clear that this Court has not adjudicated upon the rights and contentions of the parties including as to the ARB.P.378/2023 & ARB.P. 404/2023 Page 5 of 6 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 25/09/2023 at 00:08:15 arbitrability of any of the disputes, limitation, or any other preliminary objections, as well as merits of the disputes, which are left open for adjudication before the learned Arbitrator.
11. The petitions are disposed of with these directions.
PRATEEK JALAN, J MAY 23, 2023 'vp'/ ARB.P.378/2023 & ARB.P. 404/2023 Page 6 of 6 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 25/09/2023 at 00:08:15