V. K. Sales & Construction Co. v. National Hydro Electric Power Corporation
2015-12-01
DHIRAJ SINGH THAKUR
body2015
DigiLaw.ai
JUDGMENT : Dhiraj Singh Thakur, J. 1. The present petition has been filed under Section 11(6) of the Jammu and Kashmir Arbitration and Conciliation Act, 1997 (for short, Act of 1997) for appointment of an independent arbitrator. From the record, it appears that the petitioner was allotted a contract for the supply and installation of PPR Pipes and PUF Tank for upgrading of existing hot water supply system at NBHEP, Alchi. An agreement dated 24.11.2009 was executed, pursuant to which, the petitioner started executing the contract. 2. It is stated that on account of certain reasons, the petitioner could not complete the work on time for which he sought extension of time from the official respondents. 3. It is further stated that the petitioner did complete the work as earlier allotted to him and also executed some additional works as requested to be undertaken by the respondents. 4. It is, however, stated that the respondents have neither paid the petitioner for the work done as per the original agreement much less was he paid for the additional work executed. In addition to this, even the EMD and security deposited by the petitioner are stated to have been illegally retained by the said respondents. 5. It is in those circumstances that the petitioner sought resolution of the disputes through arbitration and in that regard, vide letter dated 10.4.2012 appointed Sh. C.L. Kotwal as arbitrator with a request to the respondents to appoint their arbitrator in terms of Clause 55 of general conditions of contract. 6. It is stated that the respondents did not adhere to the request made by the petitioner for the appointment of arbitrator and hence the present petition. 7. Clause 55.1 of the general conditions of contract on which the petitioner places reliance for reference of disputes reads as under: "55.1 Except as otherwise provided in clause-53.1 above, all questions, dispute or difference in relation to or in connection with the Contract shall be referred for arbitration in the manner provided as under: (a) Either of the parties may give to the other a notice in writing of the existence of such question, dispute or difference, (b) In case of dispute or difference, such dispute or difference shall be settled in accordance with the Arbitration and Conciliation Act, 1996. The arbitral tribunal shall consist of 3 arbitrators one each to be appointed by the Employer and the Contractor.
The arbitral tribunal shall consist of 3 arbitrators one each to be appointed by the Employer and the Contractor. The third Arbitrator shall be chosen by the two Arbitrators appointed by the Parties and shall act as presiding arbitrator. In case of failure of the two arbitrators appointed by the parties to reach upon a consensus in choosing the presiding Arbitrator within a period of 30 days from the appointment of the arbitrators, the Presiding Arbitrator shall be nominated by the president of the Institution of Engineers (India). (c) If one of the parties fails to appoint its arbitrator in pursuance of sub-clause (b) above within 30 days after receipt of the notice of the appointment of its arbitrator by the other party, then in the first instance the Presiding arbitrator shall be nominated by President of the Institution of Engineers (India). A certified copy of the order of the President of the Institution of Engineers (India), making such nomination shall be furnished to each of the parties. This presiding Arbitrator shall then call upon the defaulting party to nominate its arbitrator within 30 days and on his failure to do so shall appoint the Arbitrator since left to be appointed." 8. The short issue that requires to be considered is as to whether this court has jurisdiction to entertain the present petition and appoint an arbitrator in terms of the provisions of the Act of 1997 when the parties have agreed that the arbitration would be governed by the provisions of the Arbitration and Conciliation Act, 1996 (for short, Act of 1996). 9. Admittedly, only parts I, III and IV of the Act of 1996 insofar as it relates to international commercial arbitration or, as the case may be, international commercial conciliation are applicable to the state of Jammu and Kashmir. Part-II of the Central Act of 1996 is applicable insofar as it pertains to enforcement of foreign awards. Other than the above, there is in force the Act of 1997, which governs arbitration matters in the State of Jammu and Kashmir. Since the present case is not one pertaining to either international arbitration or conciliation nor one pertaining to enforcement of a foreign award, the same has to be governed by the Act of 1997. 10. In National Thermal Power Corporation v. Singer Company & Ors., (1992) 3 SCC 551 , the Apex Court held as under: "25.
Since the present case is not one pertaining to either international arbitration or conciliation nor one pertaining to enforcement of a foreign award, the same has to be governed by the Act of 1997. 10. In National Thermal Power Corporation v. Singer Company & Ors., (1992) 3 SCC 551 , the Apex Court held as under: "25. The parties have the freedom to choose the law governing an international commercial arbitration agreement. They may choose the substantive law governing the arbitration agreement as well as the procedural law governing the conduct of the arbitration. Such choice is exercised either expressly or by implication. Where there is no express choice of the law governing the contact as a whole, or the arbitration agreement in particular, there is, in the absence of any contrary indication a presumption that the parties have intended that the proper law of the contract as well as the law governing the arbitration agreement are the same as the law of the country in which the arbitration is agreed to be held. On the other hand, where the proper law of the contract is expressly chosen by the parties, as in the present case, such law must, in the absence of an unmistakable intention to the contrary, govern the arbitration agreement which, though collateral or ancillary to the main contract, is nevertheless a part of such contract." 11. Although the dispute in the judgment (supra) pertained to an international arbitration, yet the principles to some extent would apply to the facts of the present case as well. In the present case, the parties have specifically agreed to the application of the laws, which would govern the arbitration agreement and that was the Act of 1996, which does not, admittedly, extend to the State of Jammu and Kashmir. This court exercises its power under Section 11(6) as a Court as defined under the Act of 1997 and thus, would not enforce the rights of a party for appointment of an arbitrator when they specifically agreed to be governed by the provisions of the 1996 Act. For the reasons mentioned above, it is held that this court has no jurisdiction to entertain the present petition, which is accordingly dismissed.