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2007 DIGILAW 1459 (DEL)

JAI PRAKASH ASSOCIATES LIMITED v. NATIONAL HYDROELECTRIC POWER CORPORATION LIMITED

2007-07-24

SANJAY KISHAN KAUL

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SANJAY KISHAN KAUL, J. ( 1 ) THE petition has been filed by the petitioner under Section 11 (6) of the arbitration and Conciliation Act, 1996 ('the said Act' for short) for appointment of an arbitrator on behalf of the respondent in view of the alleged failure of the respondent to appoint their arbitrator in terms of the arbitration clause. It may be appropriate at the inception to note that the petitioner is a leader of M/s Indo Candian Hydro Consortium which was engaged for the Chamera Hydroelectric Project Stage II by the respondent. There were agreements entered into between the consortium and separate agreements with different parties. Learned counsel for the petitioner has clarified that the present petition has been filed by the petitioner in the capacity of the leader of the consortium. ( 2 ) THE dispute which has given rise to this present petition is limited. The respondent wanted an acceleration in the construction programme so as to ensure that the Project was completed ahead of the time as stipulated in the agreement dated 18. 07. 1999. In furtherance of the same, the petitioner as the leader of the consortium, addressed a letter dated 22. 10. 2001 setting out certain terms and conditions for the acceleration. This was followed up with another letter dated 05. 04. 2002. It was finally by the letter dated 09. 04. 2003 that the respondent agreed to an incentive for such acceleration of the Project. It is not necessary to re-produce the terms of the said letter but suffice to say that the same was addressed to the petitioner as the leader of the consortium. The schedule for such acceleration was laid down and it was stipulated that in case of delay of overall commissioning of the Project beyond October, 2003 no incentive shall be admissible. ( 3 ) THE dispute relates to non payment of this incentive which according to the petitioner is payable to the consortium while according to the respondent the said amount is not payable on account of the failure to meet the requirements of stipulated date for payment of such incentive. ( 4 ) NOTICE was issued in the present petition on 20. 04. 2007 clearly stating that the reply if any be filed within four weeks of the receipt of the notice. Notice was served on 01. 06. 2007. No reply has been filed till date. ( 4 ) NOTICE was issued in the present petition on 20. 04. 2007 clearly stating that the reply if any be filed within four weeks of the receipt of the notice. Notice was served on 01. 06. 2007. No reply has been filed till date. Learned counsel for the respondent seeks further time to file reply. The request is declined in view of the clear terms of the order dated 20. 04. 2007. ( 5 ) LEARNED counsel for the respondent makes a two fold submission. Firstly learned counsel for the respondent contends that the petition has been filed by the petitioner alone while the incentive was payable to the consortium. Learned counsel for the petitioner has already clarified that it is the petitioner who was acting as the leader of the consortium and the present petition is one in that capacity as the leader of the consortium. ( 6 ) THE second aspect raised by learned counsel for the respondent is that payment of such incentive does not form a part of the original contract and thus arbitration agreement would not apply to the same. I am unable to accept the plea for the reason that it is not in dispute that there is an arbitration clause in the original contract which envisaged the appointment of an arbitrator by each of the parties and a third arbitrator to be appointed by The international Chamber of Commerce, Paris. The clause is as under: "settlement OF DISPUTES 38. 1. . . . . 38. 2 Any dispute or difference which may arise between the parties out of or in connection with tis Contract which the parties are unable to settle amicably, shall be settled by reference to arbitration by three arbitrators. Each party shall appoint one arbitrator and the third shall be appointed by the court of Arbitration of the International Chamber of Commerce, Paris (ICC) in accordance with the provisions of the Rules of Arbitration of the International chamber of Commerce, Paris (ICC ). The rules governing the proceedings before the arbitrators shall be those of the ICC. Save as above, the Indian arbitration and Conciliation Act, 1996 shall govern the arbitration. The venue of arbitration proceedings shall be New Delhi, India. " ( 7 ) THE payments which are in dispute relate to the incentive payment offered by the respondent under the same contract. Save as above, the Indian arbitration and Conciliation Act, 1996 shall govern the arbitration. The venue of arbitration proceedings shall be New Delhi, India. " ( 7 ) THE payments which are in dispute relate to the incentive payment offered by the respondent under the same contract. It is in fact the payment for an early completion of contract. It cannot be accepted that this dispute does not arise under the contract. ( 8 ) THE petitioner has already appointed its arbitrator in Mr. V. K. Tyag. The prayer thus is for appointment of an arbitrator on behalf of the respondent. ( 9 ) IN view of the failure of the respondent to appoint an arbitrator in pursuance to the demand made by the petitioner vide letters dated 17. 08. 2006 and 22. 11. 2006, I hereby appoint Justice Devender Gupta (Retd.), C-89, South extension Part II, New Delhi 110049 Mobile: 9818065456 as the arbitrator on suggestion of learned counsel for the respondent on instructions. The petition stands disposed of.