Research › Search › Judgment

Delhi High Court · body

2014 DIGILAW 1528 (DEL)

ABB Ltd. v. Anand Rao Infrastructure

2014-05-15

VIPIN SANGHI

body2014
Order Vipin Sanghi, J. 1. This petition has been preferred by the petitioner under Section 11 of the Arbitration and Conciliation Act, 1996 (the Act) to seek the appointment of a sole arbitrator to adjudicate the disputes which have arisen between the parties arising out of the agreement dated 8.6.2009, the existence whereof is not in dispute. Article 16 of the said agreement reads as follows: 16. Settlement of Disputes and Differences: 16.1 The Contractor shall try to settle all matters pertaining to this Contract first with the Project-in-charge. If the dispute and differences could not be settled, the same (whether during progress of contract or within defects liability period and whether before or within 120 days of determination/abandonment/breach of the contract) shall then be referred by the Contractor to the AIPL giving inter alia full details of matter under dispute and the reasons thereof. The AIPL shall within a period of 60 days from the receipt of such reference from the Contractor, give its decision in writing. If the Contractor is dissatisfied with the decision of the AIPL, it can refer the matter for conciliation/arbitration by serving a written notice on the AIPL, within a period of 28 days of such decision. The notice shall specify the matters with full details and amount in dispute. 16.2 Arbitration: All matters in dispute between the parties arising out of these presents shall be referred to the arbitration of a Sole Arbitrator to be appointed jointly by the AIPL and contractor. If the AIPL and contractor fails to appoint the Sole Arbitrator within thirty days from the receipt of a request to do so from the other party, the appointment shall be made as per the provisions of the Arbitration and Conciliation Act. The award of the Arbitrator shall be final and binding upon the parties. The provisions of the Arbitration and Conciliation Act, 1996 and all statutory modifications thereof for the time being in force shall apply to such arbitration which shall be held in New Delhi. The Sole Arbitrator shall have power to open up, review and revise any certificate, opinion, decision, requisition or notice and any matter required in his opinion, save in regard to excepted matters referred as above and to determine all matters in dispute which shall be submitted for arbitration. The Sole Arbitrator shall have power to open up, review and revise any certificate, opinion, decision, requisition or notice and any matter required in his opinion, save in regard to excepted matters referred as above and to determine all matters in dispute which shall be submitted for arbitration. In case, during the arbitration proceedings the parties mutually settle/compromise or compound their dispute or difference, the reference to arbitration and the appointment of the Arbitrator shall deem to have been revoked and the arbitration proceedings shall stand withdrawn or terminated, with effect from the date on which the parties file a joint memorandum of settlement thereof, with the Arbitrator. It is agreed that the Contractor shall not delay the performance of the contract by reason of any such matter, question or dispute being referred to arbitration, but shall proceed with the supplies with all due diligence and shall, until the decision of the Arbitrator is given, abide by the decision of the Project-in-charge and no award of the Arbitrator shall relieve the Contractor of his obligations to adhere strictly to the Project-in-charge's instructions with regard to the actual carrying out of the works. 2. The case of the petitioner is that the petitioner performed the contract. However, its outstanding dues were not paid. Consequently, the petitioner sent a communication dated 16.3.2010 to the Chief Engineer, EHBCCO and M Zone, Maharashtra State Electricity Transmission Company Ltd. with copies marked to the Project Manager of Anand Rao Infrastructure Pvt. Ltd. i.e. the respondent company and to the Project Manager, R.S. India Wind Energy Pvt. Ltd., demanding the outstanding amount of Rs. 4,18,62,027.49. Another communication was sent by the petitioner on 17.4.2010 to the respondent at its Gurgaon address. In this communication as well, the petitioner raised its demand for the amount of Rs. 4,36,01,379.48. Copies of these communications were also sent to the address of the respondent at Barakhamba Road, Connaught Place, New Delhi and Bhikaji Cama Place, New Delhi. The petitioner sent another communication on 1.5.2010 to the respondent in response to the respondents communication on 20.4.2010. In this communication, the petitioner denied the stand taken by the respondent and also requested the respondents to schedule a meeting in order to sort out the unresolved issues and to communicate the date, time and venue for the meeting. The petitioner sent another communication on 1.5.2010 to the respondent in response to the respondents communication on 20.4.2010. In this communication, the petitioner denied the stand taken by the respondent and also requested the respondents to schedule a meeting in order to sort out the unresolved issues and to communicate the date, time and venue for the meeting. Another communication was sent by the petitioner on 12.5.2010 once again addressed to the Chief Engineer, Maharashtra State Electricity Transmission Company Ltd. with copies marked to the Project Manager of the respondent at Najafgarh address and to the Project Manager of R.S. India Wind Energy Pvt. Ltd. at its Connaught Place address. The petitioner claims to have sent further similar communications which were either addressed to the respondent or copies whereof were marked to the respondent on 23.11.2010 and 6.4.2011. 3. The petitioner invoked the arbitration agreement on 18.9.2012 by sending a notice in terms of Article 16.2 and proposing the name of an arbitrator. This communication was addressed to the Managing Director of the respondent at its Gurgaon address as well as at the address of R.S. India Wind Energy Pvt. Ltd. at Connaught Place, New Delhi. This notice, which was sent by registered post, was received back undelivered with the remark 'left'. The petitioner again invoked the arbitration agreement through e-mail dated 7.11.2012 sent to Mr. Rajkumar of R.S. India Group.Com. Since the sole arbitrator was not mutually appointed, this petition has been preferred. 4. The respondent has filed its reply along with documents to oppose the petition. The submission of the respondent is that the petitioner has not strictly adhered to the procedure prescribed in Article 16 of the agreement. The petitioner was obliged to first try and settle the disputes with the Project In-charge. If the same were not settled within 120 days, the same were required to be referred to the respondent by giving full details of the matter and dispute and reasons thereof. The respondent had to communicate its decision within 60 days. If the petitioner were still dissatisfied, it could refer the matter for conciliation/arbitration by serving a notice within a period of 28 days. 5. The submission of the respondent is that the petitioner did not address the communications at the correct address and to the correct authorities, and the arbitration agreement was not duly invoked by the petitioner. If the petitioner were still dissatisfied, it could refer the matter for conciliation/arbitration by serving a notice within a period of 28 days. 5. The submission of the respondent is that the petitioner did not address the communications at the correct address and to the correct authorities, and the arbitration agreement was not duly invoked by the petitioner. The further submission is that the invocation itself was barred by limitation. The respondent has also placed on record certain documents in support of its submission. Reference has been made to the communication dated 22.3.2010 sent by the respondent to the petitioner in response to the petitioners aforesaid communication of 16.3.2010. In this communication, the respondent stated that all future correspondences be done directly with it at its address. I may note that though the address has not been disclosed, this communication mentions the address of the respondent on the letterhead itself as 13/5, Sudan Garden, New Roshanpura, Main Chawla Road, Najafgarh, Delhi-110043. This communication also accuses the petitioner of breaching the agreement resulting in huge losses to the respondent on account of various acts of omission and commission of the petitioner. The petitioner was also accused of acting irresponsibly. The petitioner was also called upon to withdraw its communication of 16.3.2010 and to come forward for a meeting to discuss the issues for amicable resolution. The respondent has also placed on record the subsequent communications sent to the petitioner on 20.4.2010 (in response to the petitioners communication of 17.4.2010) and 3.5.2010 (in response to the petitioners communication of 1.5.2010). 6. Mr. Sikri, learned Counsel for the petitioner submits that the notices were sent to the respondent as per the address provided in the agreement itself. He has referred to the following extract from the agreement: This Agreement is executed at New Delhi on this 8th day of June, 2009. 6. Mr. Sikri, learned Counsel for the petitioner submits that the notices were sent to the respondent as per the address provided in the agreement itself. He has referred to the following extract from the agreement: This Agreement is executed at New Delhi on this 8th day of June, 2009. Between Anandrao Infrastructure Pvt. Ltd., a company incorporated under the Indian Companies, Act, 1956 having its office at GL Complex, Old Delhi Gurgaon Road, Dundahera, Gurgaon-Haryana and also at 606, Akashdeep Building, Barakhamba Road, Connaught Place, New Delhi-01 and also at c/o RS India, 2nd Floor, NBCC Tower, Bhikaji Cama Place, New Delhi (hereinafter referred to as the 'AIPL') and ABB Limited, a company incorporated under the Indian Companies Act, 1956 having its office at 14, Mathura Road, Faridabad-121 003, Haryana, (hereinafter referred to as the" Contractor) Recitals: Whereas the terms AIPL and Contractor unless excluded or repugnant to the context shall mean and include their respective assign, agents, nominees, representatives, successors, executors etc; Whereas the AIPL has been awarded contract by M/s. RS India Wind Energy Pvt. Ltd. ('Owner') in respect of certain works relating to 100 MW Wind Farm Power Project being set up at certain villages in District Satara, Maharashtra. 7. Reference has also been made to Article 11, which provides the address of the parties for purpose of service of notice. The same reads as follows: 11.1 Unless and until a party provides a different address or facsimile number by notice in writing to the other party to this agreement, its address for notices shall be: (a) If to AIPL: GL Complex, Old Delhi Gurgaon Road, Dundahera, Gurgaon-Haryana and also at 606, Akashdeep Building, Barakhamba Road, Connaught Place, New Delhi-01 and also at c/o RS India, 2nd Floor, NBCC Tower, Bhikaji Cama Place, New Delhi. (b) If to the Contractor: 14, Mathura Road, Faridabad-121003 (Haryana) 8. Mr. Sikri submits that the petitioner sent the communication dated 16.3.2010 at the address of the respondent as agreed between the parties. The communication dated 16.03.2010 was sent to the respondent at the following addresses: The Project Manager Anandrao Infrastructure Pvt. Ltd. c/o M/s. R.S. India Wind Energy Pvt. Ltd. N.B.C.C. Tower 15, Bikaji Cama Place New Delhi. The Project Manager M/s. R.S. India Wind Energy Pvt. Ltd. 606, Akashdeep Building Barakhamba Road Connaught Place New Delhi-110001 9. The communication dated 16.03.2010 was sent to the respondent at the following addresses: The Project Manager Anandrao Infrastructure Pvt. Ltd. c/o M/s. R.S. India Wind Energy Pvt. Ltd. N.B.C.C. Tower 15, Bikaji Cama Place New Delhi. The Project Manager M/s. R.S. India Wind Energy Pvt. Ltd. 606, Akashdeep Building Barakhamba Road Connaught Place New Delhi-110001 9. The communication dated 17.4.2010 was sent to the respondent at its following address: M/s. Anandrao Infrastructure Pvt. Ltd. GL Complex, Old Delhi Gurgaon Road, Dundahera Gurgaon (Haryana) with copies to the respondent at the following two addresses: M/s. Anandrao Infrastructure Pvt. Ltd. c/o R.S. India Wind Energy Pvt. Ltd. 606, Akashdeep Building Barakhamba Road Connaught Place New Delhi-110001 M/s. Anandrao Infrastructure Pvt. Ltd. c/o RS Indian Wind Energy Pvt. Ltd. Hall no. 4, 2nd Floor, NBCC Tower 15 Bikaji Cama Place New Delhi-110066 10. The communication dated 1.5.2010 was sent to the respondent at the following address: M/s. Anandrao Infrastructure Pvt. Ltd. GL Complex, Old Delhi Gurgaon Road, Dundahera Gurgaon (Haryana) 11. Notices were also sent to the respondent at the following address: M/s. Anandrao Infrastructure Pvt. Ltd. c/o R.S. India Wind Energy Pvt. Ltd. 606, Akashdeep Building Barakhamba Road Connaught Place New Delhi-110001 M/s. Anandrao Infrastructure Pvt. Ltd. c/o RS Indian Wind Energy Pvt. Ltd. Hall No. 4, 2nd Floor, NBCC Tower 15 Bikaji Cama Place New Delhi-110066 12. The communication dated 12.5.2010 was also sent to the respondent at the following addresses: The Project Manager Anandrao Infrastructure Pvt. Ltd. 13/5 Sudan Garden, New Roshanpura Najafgarh Delhi-110043 The Project Manager M/s. RS India Wind Energy Pvt. Ltd. 606, Akashdeep Building Barakhamba Road Connaught Place New Delhi-110001 13. Similarly, the communications of 23.11.2010 and 6.4.2010 were sent to the respondent at the addresses mentioned in the agreement itself. The notice invoking arbitration agreement dated 18.9.2012 was sent to the respondent at the following address: Shri Raj Kumar Yadav Managing Director M/s. Anandrao Infrastructure Pvt. Ltd. Old Delhi Gurgaon Road Dundahera, Gurgaon Haryana. M/s. RS India Wind Energy Pvt. Ltd. 606, Akashdeep Building Barakhamba Road Connaught Place New Delhi-110001 14. The said notices have been returned undelivered and the original envelopes duly returned have been placed on record. The registered envelopes have been opened in Court and have been found to contain the same notice of invocation of arbitration as found as Annexure P-4 on the record dated 18.9.2012. 15. The said notices have been returned undelivered and the original envelopes duly returned have been placed on record. The registered envelopes have been opened in Court and have been found to contain the same notice of invocation of arbitration as found as Annexure P-4 on the record dated 18.9.2012. 15. The submission of the respondent that communications were not sent to the respondent at the correct address cannot be accepted for two reasons. Firstly, the petitioner sent the communication at the address as mentioned in the contract itself. Prior to the change of address, the respondent did not inform the petitioner of the same. No amendment was made to the agreement. Secondly, the fact remains that the respondent responded to the communications received from the petitioner as is evident from the respondents own communication of 22.3.2010 (which was in response to the petitioners communication of 16.3.2010), 20.4.2010 (in response to the petitioners communication of 17.4.2010) and 8.5.2010 (in response to the petitioners communication of 1.5.2010). 16. So long as the communications were addressed at the correct address agreed between the parties and were received by the respondent, the respondent cannot say that the petitioner did not raise its claims and seek amicable resolution of disputes in terms of Article 16.1 of the agreement. Moreover, the response of the respondent as seen from the communication dated 22.3.2010 clearly shows that disputes arose between the parties and the respondent was in no mood to settle the claims of the petitioner. In fact, the respondent not only denied the petitioners claim but also sought to accuse the petitioner of breaching the contract on account of its acts of omission and commission. The respondent also claimed that it had suffered damages. 17. Reliance has been placed by learned Counsel for the respondent on the decision of this Court, inter alia, in Arbitration Application No. 389/2006 in Sushil Kumar Bhardwaj v. Union of India, decided on 17.3.2009. In this decision, the Court was concerned with Clause 25 of the agreement entered into between the petitioner and the respondent, Union of India. A similar arbitration clause was contained in the contract between the contractor and the MCD. The said Clause 25 provided for a three tier mechanism to resolve the disputes. Firstly, the disputes arising from the decision conveyed by the Engineer in charge were to be raised before the Superintending Engineer. A similar arbitration clause was contained in the contract between the contractor and the MCD. The said Clause 25 provided for a three tier mechanism to resolve the disputes. Firstly, the disputes arising from the decision conveyed by the Engineer in charge were to be raised before the Superintending Engineer. If the contractor was not satisfied with the decision of the Superintending Engineer, or he did not decide the issue within 15 days, an appeal lay to the Chief Engineer. If the contractor was still dissatisfied with the decision of the Chief Engineer or no decision was communicated, the contractor could seek the appointment of an arbitrator by the Chief Engineer, CPWD. 18. The issue before the Court whether the adherence to such a procedure was mandatory. The Court held that such a procedure was mandatory and it had to be resorted to in the light of Section 11 of the Act. The Court draw a distinction between Section 11 of the Act and Section 20 of the Arbitration Act, 1940 on the basis, that Section 20 of the Arbitration Act, 1940 provided an alternate mechanism for invocation of arbitration agreement to a party, without resorting to the procedure prescribed in the agreement, which was not the position under the Act. 19. The aforesaid decision has absolutely no application in the facts of this case. Firstly, it cannot be said that the petitioner did not invoke the procedure contained in Article 16.1 before invoking arbitration. The petitioner sent several communications as noticed above to the respondent, and the petitioner even sought an appointment with the respondent for resolving the disputes vide its communication dated 1.5.2010. There is nothing placed on record by the respondent to show that the respondent scheduled a meeting and the petitioner did not attend the same. The respondent cannot remain inactive when claims are raised, and then claim that the petitioner contractor has not acted in terms of Article 16.1. By its own acts and omissions, the invocation of arbitration by the petitioner cannot be defeated by the respondent. 20. I may note that the petitioner has placed on record several other e-mail communications sent to the Managing Director and other officers of the respondent raising their claims and seeking resolution of the disputes. By its own acts and omissions, the invocation of arbitration by the petitioner cannot be defeated by the respondent. 20. I may note that the petitioner has placed on record several other e-mail communications sent to the Managing Director and other officers of the respondent raising their claims and seeking resolution of the disputes. However, I do not consider it necessary to take note of each one of them since, in my view, the communications discussed above are sufficient to show the; endeavour made by the petitioner in terms of article 16.1 above, without any success. 21. The invocation of the arbitration agreement, prima facie, does not appear to be barred by limitation inasmuch, as, the same was invoked on 18.9.2012 by registered post and the contract was entered into on 8.6.2009. Obviously, the performance of the contract took place after the said date and the right to receive the payment arose only thereafter. The notice of invocation was sent at the address of the respondent as provided, in the agreement. The agreement was not amended to incorporate any other address, or to delete the address of the respondent as mentioned in the agreement. Even the respondents communication of 22.3.2010 does not state that its address contained in the agreement are not valid any longer. 22. In any event, as to whether or not the petitioners claims are within limitation is an issue which would be decided by the arbitral Tribunal, in case any objection is raised by the respondent, as it is a mixed question of fact and law. 23. Since the arbitration agreement between the parties does not provide for any specific procedure for appointment of an arbitrator, and the sole arbitrator has to be mutually appointed, in my view, even the service of notice in the present petition is sufficient to invoke the arbitration agreement. This, of course, is without prejudice to the contention of the petitioner that the arbitration agreement was invoked as early as on 18.9.2012. Even after the filing of this petition, and since the respondent was served, the respondent has taken no steps for amicable resolution of the disputes. There is no doubt that disputes have arisen between the parties which are referable to arbitration. I am, therefore, inclined to allow the present petition. 24. I appoint Mr. Justice V.K. Jain, Retd. Even after the filing of this petition, and since the respondent was served, the respondent has taken no steps for amicable resolution of the disputes. There is no doubt that disputes have arisen between the parties which are referable to arbitration. I am, therefore, inclined to allow the present petition. 24. I appoint Mr. Justice V.K. Jain, Retd. Judge of this Court as the sole arbitrator to adjudicate the claims and counter-claims of the parties arising out of the aforesaid agreement. The parties agree that fees payable to the learned arbitrator shall be paid in accordance with the schedule of fee prescribed by the Delhi International Arbitration Centre. It is ordered accordingly. Neither party shall seek nor be granted any undue adjournment by the learned arbitrator, who is requested to render the award at his earliest convenience. The parties shall appear before the learned arbitrator on 28.5.2014 at 4:30 p.m. 25. Petition stands disposed of. A copy of this order be communicated to the learned arbitrator. Petition allowed.