GANAPATHI ENGINEERING COMPANY v. UNION OF INDIA REPRESENTED BY THE GENERAL MANAGER SOUTH WESTERN RAILWAY
2016-08-26
A.S.BOPANNA
body2016
DigiLaw.ai
ORDER : The petitioner is before this Court seeking that a sole Arbitrator be appointed to resolve the dispute between the parties. The respondents have filed their objection statement disputing the claim put forth by the petitioner seeking appointment of the Arbitrator. 2. The fact that the petitioner and the respondents railways had entered into a contract agreement dated 21.5.2007 is not in dispute. With regard to certain claims made by the petitioner, at the first instance the Arbitral Tribunal had not been constituted as per the terms contained therein and as such the parties were before this Court which resulted in a proceedings before the Hon’ble Supreme Court and on remand this Court in CMP No.66/2011 dated 20.10.2014 had directed the nomination of the Arbitrators in terms of clause 64 (3)(a)(ii) r/w Section 11(8) of the Arbitration and Conciliation Act, 1996. Pursuant thereto, the respondents have nominated the Arbitrators and the Arbitral Tribunal has been constituted. However, while doing so, the General Manager who is required to refer the disputes for arbitration has referred only the claims at Sl.Nos.3 to 8 in the notice dated 22.2.2010 at Annexure-J to the petition. The petitioner, therefore, being aggrieved that, claims 1 and 2 made therein relating to the security deposit and performance guarantee being forfeited has not been referred to arbitration, has filed the instant petition seeking that a sole arbitrator be appointed to resolve the said two claims as well by referring it to the Arbitrator to be appointed. 3. In the light of the earlier round of litigation between the parties and this Court in CMP 66/2011 dated 20.10.2014 having directed nomination of the Arbitrators with reference of the claims, to the said extent invocation of the arbitration clause and the constitution of the Arbitral Tribunal would stand complied and to the said extent, objections as raised by the respondents with regard to a similar prayer for appointment of the Arbitrator in the instant petition and in that view the petition being not maintainable, will have to be accepted by this Court. However, the question that will also arise for consideration is as to the nature and the contention put forth with regard to the claims 1 and 2 which has not been referred by the General Manger to be decided by the Arbitral Tribunal. 4.
However, the question that will also arise for consideration is as to the nature and the contention put forth with regard to the claims 1 and 2 which has not been referred by the General Manger to be decided by the Arbitral Tribunal. 4. The contention as put forth by the respondents is that the said claim falls under the “excepted matter” as contained in the general terms at clause 63 therein. 5. The learned counsel for the petitioner has relied on the decision of the Hon’ble Supreme Court in the case of General Manager, Northern Railway and Another Vs. Sarvesh Chopra reported in (2002) 4 Supreme Court Cases 45 to contend with regard to the nature of the consideration that has been made by the Hon’ble Supreme Court with regard to the ‘excepted matters’ and in that light the arbitration was ordered. 6. The learned counsel for the respondent in fact would refer to the very same decision, wherein the Hon’ble Supreme Court has also accepted the ‘excepted matters’ being outside the purview of the arbitration clause. Therefore, in such circumstance, if the agreement is taken into consideration and in the agreement if certain matters are excepted specially from the purview of the arbitration clause, certainly neither of the parties seeking constitution of the Arbitral Tribunal can seek for reference of such matters to the arbitration tribunal and claim any in that regard will have to be made in a forum other than arbitration. However, having already noticed the situation where the parties were before this Court and this Court in CMP 66/2011 dated 20.10.2014 had taken note of the Arbitration Clause and directed the constitution of the Arbitral Tribunal and in that light when the Arbitral Tribunal is constituted and some of the claims raised by the petitioner being referred thereto, in the present facts whether the exclusion of claims 1 and 2 made by the petitioner not being referred on the ground that the same are ‘excepted matters’ is sustainable is to be noticed by this Court. 7. While taking note of this aspect, insofar as the claims 4, 5 and 7 which has already been referred are issues relating to the illegal termination of the contract as contended by the petitioner. One of the claims namely claim No.7 refers to the bank guarantee.
7. While taking note of this aspect, insofar as the claims 4, 5 and 7 which has already been referred are issues relating to the illegal termination of the contract as contended by the petitioner. One of the claims namely claim No.7 refers to the bank guarantee. Therefore, if the said claims which are already referred are to be adjudicated by the Arbitrator in the present facts, in any event the correctness or otherwise of the termination of the contract and the default clause which resulted in the termination of the contract and which of the parties was responsible for the same, are also to be gone into by the Arbitrator and thereafter, conclusion will have to be reached therein. Therefore, if the decision on the claims already referred becomes relevant for the purpose of deciding the correctness or otherwise of forfeiture of the security amount and the bank guarantee, the said issue will also stand answered as a incidental issue to the mater already referred. 8. Hence, in the present facts, if all these aspects are taken into consideration, the claim as being put forth by the petitioner in claim Nos.1 and 2 are consequential to the other claims which have been raised and has already been referred to arbitration. If that be the position, this aspect of the matter is also to kept in view by the Arbitrator while deciding the lis between the parties, even in terms of the reference as already made to the Arbitrator. Therefore, in such circumstances, even if the claims are accepted to be the ‘excepted matters’, the same would in the instant facts arise for consideration in that regard in the same proceedings and the appointment of another Arbitrator as sought herein would not arise even in that circumstance. The observations made herein above would however permit the matter to be resolved in that regard. Needless to mention that the contentions on merits by both side on claim Nos.1 and 2 are allowed to be urged before the Arbitral Tribunal which has been constituted earlier The instant petition stands disposed of accordingly.