Sarin's v. Chairman and Managing Director, National Project Construction Corporation Ltd
2017-09-20
DINESH MAHESHWARI
body2017
DigiLaw.ai
JUDGMENT : Dinesh Maheshwari, J. By way of this application under section 11 (6) of the Arbitration and Conciliation Act, 1996 ['the Act'], the petitioner-firm has made the request for appointment of arbitrator to adjudicate upon and decide all its disputes with the respondents, arising out of, and relating to, the contract work of "Construction of 6 Nos. S M Barracks (G+II) in 2 Blocks with allied services and development works for Assam Rifles at Jawalamukhi (Manipur), Package No. 113" that was awarded to it through the National Projects Construction Corporation Ltd. ['NPCC']. 2. The petitioner has averred that in terms of the procedure set out in the contract, it had diligently mobilized its manpower, equipments and resources in order to complete the project in time but due to the reasons attributable elsewhere, the work could not be completed in time and an extension was granted upto 30.06.2013, without levying liquidated damages or penalty. The petitioner has further averred that escalation bill of the extended period was submitted after completion of work, which was forwarded by NPCC to the Office of Director General Assam Rifles, but the same was not paid and M/S Sarin's v. The Chairman and Managing Director, NPCC was returned for alleged delay in filing. The said bill, according to the petitioner, even after being re-submitted was returned un-paid on the alleged legal opinion that the escalation bill for the extended period could not be considered. It is yet further averred that in view of such dispute relating to its bill, a notice was served on behalf of the petitioner upon the Zonal Manager, NPCC on 03.04.2017 for appointment of sole arbitrator whereupon, the Zonal Manager, by his letter dated 21.04.2017, asked the petitioner to take up the matter as per Clause 18 of the Special Conditions of Contract; and even after another letter dated 12.05.2017 on behalf of the petitioner to the respondent No. 2, Director General Assam Rifles, the respondents failed to appoint the arbitrator. 3. It is submitted that the inaction on the part of the respondents constitutes a refusal to comply with the terms of the contract with respect to the constitution of Arbitral Tribunal and commencement of arbitration proceedings and hence, the petitioner is approaching this Court for appropriate orders under Section 11 of the Act.
3. It is submitted that the inaction on the part of the respondents constitutes a refusal to comply with the terms of the contract with respect to the constitution of Arbitral Tribunal and commencement of arbitration proceedings and hence, the petitioner is approaching this Court for appropriate orders under Section 11 of the Act. On the other hand, it is submitted on behalf of the respondents that the petitioner has not disclosed all the facts. It is further submitted that the petitioner sought extension of time in regard to delay in completion of the work and extension was given without any escalation charges. 4. Heard learned counsel for the parties and examined the record. 5. The limited aspect required to be considered in this application is as to whether there exists an arbitration agreement between the parties? 6. In fact, the existence of arbitration agreement in this matter is not in dispute. The arbitration Clause, being Clause 18 of the agreement, reads as under:- "18. Arbitration Clause : Except where otherwise provided in the contract all question and disputes relating to the meaning of the specifications, designs drawing and instructions before mentioned and as to the quality of workmanship or materials used on the work or as to any other question, claim, right, matter or thing whatsoever in anyway arising out of or relating to the contract design, drawing, specifications, estimates, construction order or these conditions or otherwise concerning the works or the execution or failure to execute the same, where arising during the progress of the works or after the completion or abandonment thereof shall be referred to the sole arbitration of the persons appointed by the Chairman and Managing Director of National Projects Construction Corporation Ltd. acting as such at the time of dispute. It will be no objection to any such appointment that the arbitrator so appointed is a Corporation's officer, that he had to deal with the matters to which the contract relates and that in the course of his duties as Corporation Officer he had expressed views on all/or any of the matters in disputes or difference.
It will be no objection to any such appointment that the arbitrator so appointed is a Corporation's officer, that he had to deal with the matters to which the contract relates and that in the course of his duties as Corporation Officer he had expressed views on all/or any of the matters in disputes or difference. The arbitrator to whom the matter is originally referred being transferred or vacating his office or being unable to act for any reasons, the Chairman and Managing Director, shall appoint another person to act as arbitrator in accordance with the reference from the date at which it was left by his predecessor. It is also a term of this contract that person other than a person appointed by the Chairman & Managing Director as aforesaid should act as Arbitrator and if for any reason, that is not possible, the matter is not to be referred to arbitration at all. The arbitrator may from time to time with the consent of the parties, enlarge the time for making and publishing the award. Subject as aforesaid the provisions of the Arbitration & Reconciliation Act 1996 or any statutory modification or reenactment thereof and the rules made there under and for the time being in force shall apply to the Arbitration proceeding under this clause. The court of Shillong only and no other shall have the jurisdiction with regards to any dispute or difference or suit relating to the contract. The arbitrator shall give reasons for the award." 7. From the material placed on record, it is clear that the petitioner indeed made the requests to the respondents to proceed for arbitration in accordance with the arbitration agreement but the requisite steps were not taken by the respondents. In the totality of circumstances and for the reason of failure of the procedure for appointment of arbitrator, it is just and proper that an independent arbitrator be appointed to adjudicate upon and decide the dispute between the parties including their claims, counter claims and objections. 8. During the course of submissions, learned counsel Smti.
In the totality of circumstances and for the reason of failure of the procedure for appointment of arbitrator, it is just and proper that an independent arbitrator be appointed to adjudicate upon and decide the dispute between the parties including their claims, counter claims and objections. 8. During the course of submissions, learned counsel Smti. P.D. Bujarbaruah appearing for the petitioner has pointed out that looking to the limited scope of enquiry in this application, she has conferred with Hon'ble Shri Justice H.N. Sarma, a former Judge of Gauhati High Court, residing at Chenikuthi Hill Side, K.K. Road, Bye Lane No. 2, Guwahati - 781003, who has agreed to take up the arbitration in this matter. Shri K Paul and Shri S. Sengupta, learned counsel for the respondents concur with the submissions made by the learned counsel for the petitioner. In view of these submissions ad idem, it appears just and proper to appoint Hon'ble Shri Justice H.N. Sarma, a former Judge of Gauhati High Court, as the Sole Arbitrator in this case while leaving all other aspects relating to the cost of proceedings and fees open for determination by the arbitrator in accordance with the law applicable, including the provisions contained in Fourth Schedule to the Arbitration and Conciliation Act, 1996, [as amended by the Arbitration and Conciliation (Amendment) Act, 2015]. 9. With the observations foregoing, Hon'ble Shri Justice H.N. Sarma, a former Judge of Gauhati High Court is appointed to act as the Sole Arbitrator to adjudicate upon and decide all the disputes between the parties including their claims, counter claims and objections relating to the contract in question. The requirements of the Arbitration and Conciliation Act, 1996, [as amended by the Arbitration and Conciliation (Amendment) Act, 2015] shall be complied with by all the concerned. 10. This arbitration petition stands disposed of accordingly. 11. Needless to observe that all the questions arising between the parties in this matter including the maintainability of the claim shall remain open for determination in the arbitration proceedings.