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Showing contexts for: epc contracts in Maytas Infra Ltd., vs Campagnie D Electricite Du Senegal ... on 6 September, 2022Matching Fragments
(Per the Hon'ble the Chief Justice Ujjal Bhuyan) Heard Mr. K.Devnath, learned counsel for the petitioner.
2. This civil revision petition has been filed under Article 227 of the Constitution of India assailing the order dated 24.09.2014 passed by the learned I Additional Chief Judge, City Civil Court, Secunderabad, in I.A.No.581 of 2011 in O.S.No.85 of 2010.
3. The suit was filed by the petitioner herein. In the pending suit, respondent No.1 filed I.A.No.581 of 2011 under Section 8 of the Arbitration and Conciliation Act, 1996 (briefly, 'the 1996 Act' hereinafter), to direct the plaintiff to initiate arbitral proceedings before the Arbitration Institute of Stockholm Chamber of Commerce as per clause 14 of the Engineering Procurement and Construction (EPC) contract dated 12.07.2008.
4. I.A.No.581 of 2011 was contested by the parties, whereafter the Court below framed the following issue for consideration:
Whether the petitioner in I.A.No.581 of 2011 (respondent No.1 herein) had established substantial grounds to allow the petition or not?
5. The Court below noted that both the parties were undisputedly covered by the EPC contract for 125 MW coal fired power plant in Sendou, Senegal. Clause 14 of the said contract provided for dispute resolution, which was extracted by the Court below as under:
"From the facts of the present case, the first respondent herein is disputing the right of the petitioner/defendant No.3 from invoking the Bank guarantee under the guise that the termination of contract is not proper, which is a broad question of fact to be determined, is a dispute within the purview of Arbitration clause in the said EPC contract itself.5
Except such large dispute raised as an impediment to invoke the Bank Guarantee, there is no other question of fact to be determined to grant the reliefs in the suit as framed. Therefore, there appears no separate dispute to be determined in respect of the terms of Bank Guarantee between the first respondent and other respondents in respect of the right vested with the respondent Nos.2 and 3 to pay the amount covered by the Bank Guarantee to the petitioner/defendant No.3 because the bank which gave such guarantee is bound to honour it in the absence of allegation of fraud and the very foundation in obtaining such Bank guarantee is not in dispute. In the light of the discussions in the earlier paras, there appears no substantial force in the contentions of the respondent No.1 that respondents 2 and 3 are not parties to the arbitration clause covered by Ex.P1 EPC contract, therefore, respondents 2 and 3 cannot be forced to submit themselves to the Arbitration proceedings. In fact, respondents 2 and 3 being the guarantors on behalf of respondent No.1 impliedly agents of the 1st respondent and they cannot raise any separate dispute to be determined beyond the scope of the dispute between the petitioner/defendant No.3 and the 1st respondent/plaintiff as a requirement for invoking the Bank Guarantee covered by the terms of Ex.P1 EPC contract. Therefore, the real dispute among the parties to the suit is between petitioner/defendant No.3 and the 1st respondent/plaintiff is very much covered by the Arbitration clause in Ex.P1."
7. After holding so, the Court below concluded that the subject matter of the dispute in the suit is covered by clause 14 of the EPC contract between the parties and accordingly directed the plaintiff to proceed under clause 14 of the EPC contract. The suit was accordingly closed. Paragraph 26 of the order dated 24.09.2014 reads as under:
"26. In the light of the observations in the earlier paras, it is held that the subject matter of the dispute in the present suit are covered by clause 14 of Ex.P1 EPC contract between petitioner/defendant No.3 and 1st respondent/plaintiff, and that the other respondents are only proforma parties to determine such real dispute, as such, the present petition is maintainable U/sec.8 of Arbitration Act to direct the respondent No.1/plaintiff to proceed under clause 14 of Ex.P1 EPC contract and accordingly, the suit proceedings shall be closed and that the suit shall be disposed of.