NABADURGA CONSTRUCTION (P) LTD. v. STATE OF ORISSA
2008-12-05
I.M.QUDDUSI
body2008
DigiLaw.ai
JUDGMENT : I.M. Quddusi, J. - By means of this arbitration petition, the Petitioner has prayed for appointment of an arbitrator for adjudication of the disputes or to refer the matter to an adjudicator unconnected with both the parties in any manner. 2. The Petitioner entered into a contract with the Opposite Parties for the work "balance new works of Parjang branch canal from R.D. 00 KM to 16.32 KM excluding HR. & C.R. of Rengali Irrigation Sub-project" (Package No. 24) vide Agreement No. 4/NCB/97-98/PCD dated 21.7.1997. The relevant part of the agreement is reproduced as under: 24. Disputes: 24.1. If the Contractor believes that a decision taken by the Engineer was either outside the authority given to the Engineer by the contract or that the decision was wrongly taken, the decision shall be referred to the Adjudicator within 14 days of the notification of the Engineer's decision. 25. PROCEDURE FOR DISPUTES: 25.1. The Adjudicator shall give a decision in writing within 28 days of receipt of a notification of a dispute. 25.2. The Adjudicator shall be paid daily at the rate specified in the Contract Data together with reimbursable expenses of the types specified in the Contract Data and the cost shall be divided equally between the Employer and the Contractor, whatever decision is reached by the Adjudicator. Either party may refer a decision of the Adjudicator to an Arbitrator within 28 days of the Adjudicator's written decision. If neither party refers the disputes to arbitrator within the above 28 days, the Adjudicator's decision will be final and binding. 25.3. The arbitration shall be conducted in accordance with the Arbitration Procedure published by the institution named and in the place shown in the Contract Data. 26. REPLACEMENT of ADJUDICATOR. 26.1. Should the Adjudicator resign or die, or should the Employer and the Contractor agree that the Adjudicator is not fulfilling his functions in accordance with provisions of the contract, a new Adjudicator will be jointly appointed by the Employer and the Contractor. In case of this disagreement between Employer and the Contractor within 30 days, the Adjudicator shall be designated by the Appointing Authority designated in the Contract Data at the request of either party within 14 days of receipt of such request. 3.
In case of this disagreement between Employer and the Contractor within 30 days, the Adjudicator shall be designated by the Appointing Authority designated in the Contract Data at the request of either party within 14 days of receipt of such request. 3. From perusal of the above quoted clauses of the agreement, it is clear that before the appointment of an arbitrator, the matter should be referred to the adjudicator. 4. In my opinion, the adjudication by the adjudicator is a stage prior to the reference to the arbitrator. Under the Arbitration and Conciliation Act, the stage prior to the appointment of arbitrator or referring the dispute to the arbitrator under Part III, conciliation is available but for that parties have to agree for the conciliation of dispute arising out of legal relationship and for that purpose it has been provided in Section 62 of the said Act that the party initiating conciliation shall send to the other party a written invitation to conciliate briefly identifying the subject of the dispute and the conciliation proceeding shall commence when the other party accepts in writing the invitation to conciliate and if the other party rejects the invitation, there will be no conciliation proceedings. Therefore, appointment of adjudicator, according to the agreement, is prior to referring the matter to arbitrator meaning thereby that if any of the parties is aggrieved by the decision of the adjudicator, the aggrieved party may take the lead for referring the dispute to arbitrator in accordance with law. 5. Since in the instant case, an adjudicator has been appointed (Sri Naresh Ch.Rout, (Retd. Chief Engineer) and according to the conditions of the contract only after the decision of the adjudicator either party may refer the decision of the adjudicator to an arbitrator, the stage of applicability of Arbitration and Conciliation Act, 1996 has not come. The arbitration petition is, therefore, pre-mature. 6. In the instant petition, this Court cannot direct the Opposite Parties or the adjudicator to conclude the proceedings and this Court is not an appropriate forum for the same. Therefore, the arbitration petition at this stage is liable to be dismissed and the same is dismissed accordingly. Final Result : Dismissed