A2Z Waste Management (Ahmedabad) Limited v. Ahmedabad Municipal Corporation
2022-09-29
ARAVIND KUMAR
body2022
DigiLaw.ai
ORDER: 1. The short issue which falls for consideration in this petition is : Whether the application filed under Subsection (6) of Section 11 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’) is to be allowed or dismissed? 2. The factual matrix which has given rise to the filing of this petition can be crystallized as under. Petitioner entered into a Concession Agreement dated 28.02.2013 with respondent for establishing 1000 TPD mixed Municipal Solid Waste Treatment Plant on design, build, own, finance and operate basis vide Annexure-B. The dispute in respect of said agreement arose between the parties. Undisputedly, parties have agreed under Article 34 of the said agreement for resolution of their disputes by alternate dispute resolution mechanism. The agreement so entered into between the parties reads as under : “34.1 Dispute resolution. 34.1.1 Any dispute, difference or controversy of whatever nature howsoever, arising under or out of or in relation to this agreement (including its interpretation) between the parties, and so notified in writing in either party to the other party (the Dispute) shall in the first instance, be attempted to be resolved amicably in accordance with the conciliation procedure set forth in clause 34.2. 34.1.2 The parties agree to use their best efforts for resolving all disputes arising under or in respect of this agreement promptly, equitably and in good faith and further agree to provide each other with reasonable access during normal business hours to all non privileged records, information and date pertaining to any Dispute. 34.2 Conciliation 34.2.1 In the event of any dispute between the parties, same shall initially be resolved by amicable negotiations amongst the parties and if not resolved through such negotiations within 30 (thirty) days of written notice of the existence of such Dispute either Party may refer such Dispute to the Commissioner of the Authority for amicable settlement, and upon such reference, the said persons shall meet no later than 7 (seven) days from the date of reference to discuss and attempt to amicably resolve the dispute.
If such meeting does not take place within the 7 (seven) days period or the dispute is not amicably settled within 15 (fifteen) days of the meeting or the Dispute is not resolved as evidenced by the signing of written terms of settlement within 30 (thirty) days of the notice in writing referred to in clause 34.1.1 or such longer period as may be mutually agreed by the parties, either party may refer the dispute to arbitration in accordance with the provisions of clause 34.3. 34.3 Arbitration 34.3.1 Any dispute which is not amicably resolved by conciliation, as provided in clause 34.2 shall be finally decided by reference to arbitration by a board of arbitrators appointed in accordance with clause 34.3.2. Such arbitration shall be held in accordance with the Arbitration Act. The venue of arbitration shall be Ahmedabad and the language of arbitration proceedings shall be English. 34.3.2 There shall be a board of 3 (three) arbitrators, of whom each party shall select one, and the third arbitrator shall be appointed by the 2 (two) arbitrators so selected, and in the event of disagreement between the 2 (two) arbitrators, the appointment shall be made in accordance with the Rules. 34.3.3 The arbitrators shall make a reasoned award (the "Award”). Any award made in any arbitration held pursuant to this Article 34 shall be final and binding on the parties as form the date, it is made, and the concessionaire and the Authority agree and undertake to carry out such Award without delay. 34.3.4 The concessionaire and the Authority agree that an award may be enforced against the concessionaire and/or the authority as the case may be and their respective assets wherever situated. 34.3.5 This agreement and the rights and obligations of the parties shall remain in full force and effect, pending the award in any arbitration proceedings hereunder. 34.4 Enforcement of Award 34.4.1 The parties agree that the decision or award resulting from arbitration shall be final and binding upon the parties and shall be enforceable in accordance with the provisions of the Arbitration Act, subject to the rights of the aggrieved parties to secure relief from any higher forum. 34.5 Adjudication by Regulatory Authority or Commission. 34.5.1.
34.4 Enforcement of Award 34.4.1 The parties agree that the decision or award resulting from arbitration shall be final and binding upon the parties and shall be enforceable in accordance with the provisions of the Arbitration Act, subject to the rights of the aggrieved parties to secure relief from any higher forum. 34.5 Adjudication by Regulatory Authority or Commission. 34.5.1. In the event of constitution of a statutory Regulatory Authority or Commission with powers to adjudicate upon disputes between the parties, all disputes arising thereafter shall be adjudicated upon by such Regulatory Authority or Commission in accordance with the applicable law and all references to dispute resolution procedure shall be construed accordingly. For the avoidance of doubt, the parties hereto agree that the adjudication hereunder shall not be final and binding until an appeal against such adjudication has been decided by an appellate tribunal or High Court, as the case may be, or no such appeal has been preferred within the time specified in the applicable law. 34.6 Performance during the dispute. 34.6.1 Pending the submission of and/or decision on a dispute and until the arbitral award is published, the parties shall continue to perform their respective obligations under this agreement without prejudice to a final adjustment in accordance with such award.” (emphasis supplied) 3. Petitioner is before this Court invoking the arbitration clause contending inter alia that an arbitrable dispute has arisen between parties and petitioner having performed its obligation/duties prior to invoking the arbitration clause and respondent having failed to respond to the said demand, need has arisen for appointment of an arbitrator and as such has prayed for appointment of arbitrator. 4. On notice being served, respondent has appeared and filed their reply denying the averments made in the petition except to the extent expressly admitted thereunder and specifically contended that it is a stale claim or in other words, petitioner has approached belatedly and raised a dispute much after termination of the contract and invocation of the Bank Guarantee and as such petition is liable to be dismissed. 5.
5. A perusal of the alternate dispute redressal agreement which the parties have entered into as extracted hereinabove namely Clause 34 would disclose that if any dispute or difference or controversy arises out of or under the contract or in relation to the contract at the first instance, either of the party has to notify in writing to the other party about such dispute and attempt should be made to resolve the same amicably in accordance with Clause 34.2. This would take this Court to Clause 34.2 extracted hereinabove which would clearly indicate that parties have agreed to initially resolve the dispute by amicable negotiations and if not resolved through such negotiations within 30 days of written notice of existence of such dispute, either party may refer such dispute to the Commissioner of the authority for amicable settlement and upon such reference said persons are required to meet not later than 7 days from the date of reference to discuss and attempt to amicably resolve the dispute. In the event of such meeting not taking place within 7 days period or the dispute is not amicably settled within 15 days of the meeting or the dispute is not resolved as evidenced by signing of written terms of settlement within 30 days of the notice in writing referred to in Clause 34.1.1 or such longer period as may be mutually agreed, either party would be empowered to refer the dispute to arbitration in accordance with Clause 34.3. Said Clause 34.3 would indicate that in the event of such dispute not being resolved by conciliation as provided in Clause 34.2, it shall be finally decided by reference to arbitration by a Board of Arbitrators appointed in accordance with Clause 34.3.2 and such arbitration is to be held in accordance with the Act. 6. Undisputedly, a notice of termination came to be issued in the instant case by the respondent on 06.08.2015 terminating the contract dated 28.02.2013 and indicating thereunder that Bank Guarantee given would be invoked. However, for reasons best known, the respondent did not invoke the Bank Guarantee till 29.03.2016. It is on such invocation of the Bank Guarantee, petitioner got issued two notices namely one dated 05.07.2018 and another dated 11.09.2018 as required under Clause 34.2 namely attempting to resolve the dispute through conciliation as indicated in Clause 34.2 or requesting the respondent to resolve the dispute by conciliation.
It is on such invocation of the Bank Guarantee, petitioner got issued two notices namely one dated 05.07.2018 and another dated 11.09.2018 as required under Clause 34.2 namely attempting to resolve the dispute through conciliation as indicated in Clause 34.2 or requesting the respondent to resolve the dispute by conciliation. On there being no response to the same from respondent, a demand for arbitration has been raised on 21.11.2018 vide Annexure-F. Though Mr.Nikunt Raval, learned counsel appearing for the respondent would vehemently contend that claim is time-barred, at this stage, if this Court were to embark upon conducting an enquiry on this issue and opinion is expressed by this Court, it is likely to prejudice the rights of the parties. Hence, this Court would desist from expressing any opinion with regard to either limitation and as a consequences thereof, the arbitrability of the dispute. Section 16 of the Arbitration Act empowers the Arbitral Tribunal to rule not only on its jurisdiction but also it would be empowered to rule on any objection with respect to the existence or validity of the Arbitration Agreement on the issue of maintainability of arbitrable dispute as well as issue of limitation. 7. As such, reserving liberty to the parties to raise all contentions before the Arbitral Tribunal and without expressing any opinion on all these issues or in other words, keeping open the contentions of both parties, this Court is of the view that there is a need or necessity to appoint an arbitrator and having regard to the value of the claim made by petitioner, I proceed to pass the following ORDER (i) Petition is allowed. (ii) Hon’ble Mr. Justice C.L.Soni, Retired Judge of this Court, residing at : C/151, Arjun Tower, Near C.P.Nagar Part-2, Ghatlodia, Ahmedabad-380061, having phone numbers 079-27431474 and 9978405478 and Email ID: justiceclsoni@gmail.com, is hereby nominated as the sole Arbitrator to resolve the dispute between the parties which has arisen between the parties who shall act in accordance with the Arbitration Centre (Domestic and International), High Court of Gujarat Rules, 2021. Both Parties would also be governed by said Rules. (iii) Registry to communicate this order to the sole Arbitrator forthwith by Speed Post. (iv) Pending application/s, if any, stands consigned to records.