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2018 DIGILAW 264 (RAJ)

Har Har Company, Doshi Chambers through Its Rajendra Kumar Bhati S/o Chand Mal Bhait v. Union of India through the Secretary, North Western Railways, Secretariat, New Delhi

2018-01-19

ARUN BHANSALI

body2018
ORDER : ARUN BHANSALI, J. 1. This application under Section 11(6) of the Arbitration and Conciliation Act, 1996 ('the Act') has been filed by the applicant seeking appointment of an independent Arbitrator. 2. The applicant entered into an agreement with the respondent-Railways vide Ex.- A/2. The agreement, inter alia contained the following clause for settlement of disputes:- "35.0 Settlement of disputes. 35.1 The dispute will be settled under the Arbitration Act 1996. 35.2 The successful tender/s shall put-up his/their claim as per clause 43 of the General Conditions of the contract during the progress of work and not after completion of the work. All such claims and disputes shall be settled promptly during the progress of the work. The final authority for giving the decision on claims and disputes put up by the tenderer/s contractor/s shall be the Chief Administrative Officer/Chief Engineer (Construction), North Western Railway, Jaipur. 35.3 The provision of the clause - 63 & 64 of the General condition of contract will be applicable only for settlement of claims or disputes between the parties for value less than or equal to 20% of the value of the contract & when claims or disputes are of the value more than 20% of the value of contract, provision of clause 63 & 64 and other relevant clauses of the General Conditions of Contract will not be remedy for settlement of such disputes. 35.4 The contractor/s shall not be entitled to ask for reference to arbitration, before the completion of the work assigned to him/them under this contract. The contractor/s shall seek reference to arbitration to settle the disputes only once within the ambit of condition 35.3 above." 3. The applicant raised claim with the respondent-Railways and sought reference to arbitration in terms of Clauses 63 and 64 of the General conditions of Contract. The said prayer of the applicant was rejected by the respondent-Railways by their order dated 30.11.2015, inter alia, with the following observations:- "General Manager, North-Western Railway, Jaipur has not agreed for appointment of arbitration in existing case being the claims are more than 20% of total agreement value. The said prayer of the applicant was rejected by the respondent-Railways by their order dated 30.11.2015, inter alia, with the following observations:- "General Manager, North-Western Railway, Jaipur has not agreed for appointment of arbitration in existing case being the claims are more than 20% of total agreement value. As per clause No. 35.3 of contract agreement, provision of clause 63 & 64 and other relevant clause of General Conditions of Contract will not be remedy for settlement of disputes when claims or disputes are of value more than 20% of the value of contract, as requested by you vide your letter cited above." Where after, the present application has been filed by the applicant, inter alia with the following submissions:- "17. That from a bare perusal of An.15, it would be clear that respondents although have admitted the existence of claims/disputes, but the appointment of arbitrator has been denied solely on the ground that the claims are more than 20% of total agreement value and therefore, as per clause No. 35.3 of contract agreement the provisions of clause 63 and 64 and other relevant clauses of GCC will not be remedy for settlement thereof as it exceed the value more than 20% of the value of contract. It is submitted that once the respondents are of the opinion that there does exist a rightful/legal claim (though found to exceed 20% of the value of contract), then they could have restricted the same up to 20% of the value of contract and could have referred the claim to the said extent to arbitration for its adjudication by way of appointing an arbitrator. Having not done so the respondents have denied a very lawful request of the applicant for referring the dispute to arbitral tribunal. 18. That in the circumstances, the applicant respectfully submits before this Hon'ble Court that it readily restricts its claim/s so made before the respondents only to the extent of 20% of the value of contract and prays this Hon'ble Court to kindly consider this application while confining the claim to the said extent only and to be further pleased to order for referring the claim/dispute to adjudicate the same by way of arbitration by ordering appointment of an arbitrator." 4. A prayer has also been made that Arbitrator be appointed while confining the claim only to the extent of 20% value of the Contract. 5. A prayer has also been made that Arbitrator be appointed while confining the claim only to the extent of 20% value of the Contract. 5. Learned counsel for the applicant relying on judgment in the case of MBL Infrastructures Limited v. North Western Railway : 2016 (1) WLC (Raj.) 596, submitted that as now the applicant has reduced his claim to the extent of 20% of the value of Contract, the Arbitrator may be appointed. 6. Learned counsel for the respondent opposed the application filed by the applicant. 7. I have considered the submissions made by learned counsel for the parties and have perused the material available on record. 8. Provisions of Section 11(6)(a) of the Act, inter alia, reads as under:- "11. Appointment of arbitrators:- ....................................... .......................................... ........................................... (6) Where, under an appointment procedure agreed upon by the parties,- (a) a party fails to act as required under that procedure; ................................... .................................... a party may request the Supreme Court or, as the case may be, the High Court or any person or institution designated by such court to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment." 9. A perusal of the said provision indicates that it is only in a case where a procedure agreed between the parties fails, that an application may be filed before this court seeking appointment of Arbitrator. 10. Admittedly, the applicant made application for appointment of Arbitrator in terms of the Contract, which was rejected by the respondent-Railways on account of the same being beyond 20% of the Contract value. 11. Submissions made in the application restricting the claim to 20% is apparently vague as to how that claim has been reduced to 20% has not been indicated and besides the above, the applicant has so far not raised the claim and/or made prayer for appointment of Arbitrator in terms of Clauses 63 and 64 before the respondent-Railways restricting/reducing the same to the extent of 20% and in those circumstances, it cannot be said that the procedure as agreed between the parties has failed so as to invoke the jurisdiction of this Court under Section 11(6) of the Act. 12. 12. In view of the above, the application filed by the applicant is not maintainable, the same is, therefore, dismissed leaving it open for the applicant to act in accordance with provisions of the Contract/Act as observed hereinbefore.