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2022 DIGILAW 63 (CAL)

Blue Star Limited v. Shriram EPC Limited

2022-01-18

PRAKASH SHRIVASTAVA

body2022
JUDGMENT : 1. This application under Section 11 of the Arbitration and Conciliation Act, 1996 has been field for appointment of arbitrator to resolve the dispute between the parties. 2. The case of the applicant is that on and from the beginning of 2009, the respondent had issued the following Purchase Orders/Work Orders with identical arbitration clause: SCHEDULE Purchase Order/Work Order Serial Number Date Amount 1. SEPC/ISP/ACVS/070 August 25, 2009 Rs. 1,37,02,631.00 2. SEPC/ISP/ACVS/071 August 25, 2009 Rs. 49,66,840.00 3. SEPC/ISP/ACVS/0182 September 13, 2010 Rs. 21,45,000.00 4. SEPC/ISP/ACVS/0183 September 13, 2010 Rs. 6,12,811.00 5. SEPC/ISP/ACVS/0254 August 02, 2011 Rs. 2,88,000.00 6. SEPC/ISP/ACVS/0256 August 04, 2011 Rs. 22,48,480,.00 7. SEPC/ISP/ACVS/0269 September 09, 2011 Rs. 1,03,006.00 8. SEPC/ISP/ACVS/0271 September 23, 2011 Rs. 7,55,468.00 9. SEPC/ISP/ACVS/0184 September 19, 2010 Rs. 4,94,063.00 10. 1100003262 September 24, 2010 Rs. 2,53,690.00 3. Further case of the applicant is that these purchase orders were for the purpose of designing, engineering, manufacturing, erecting, supplying and commissioning of plant and equipments by the applicant. A further plea has been raised that the purchase orders form part of the composite transaction in respect of a project at IISCO Steel Plant and are interconnected with each other. According to the applicant, he had carried out the work in respect of the purchase orders but the full payment was not made by the respondent and the amount to the tune of Rs. 33,49,343.52 is still due. The correspondence was exchanged between the parties and the meeting also took place but with no success. Hence, the applicant had sent the notice dated 03r March, 2021 to the respondent invoking the arbitration clause and proposing the name of the sole arbitrator. Inspite of service of notice, no response was received by the applicant. Hence, the present application has been filed. 4. Submission of learned Counsel for the applicant is that all the purchase orders contained identical arbitration clause and the purchase orders are not in dispute and attempt for amicable settlement has failed, therefore, an arbitrator be appointed for settling the dispute. 5. The objection of learned Counsel for the respondent is that as per the arbitration clause, initially attempts are required to be made for amicable settlement which has not been done. Hence, Section 11 cannot be invoked. 6. Having heard the learned Counsel and on perusal of the record, it is noticed that the arbitration agreements are undisputed. 5. The objection of learned Counsel for the respondent is that as per the arbitration clause, initially attempts are required to be made for amicable settlement which has not been done. Hence, Section 11 cannot be invoked. 6. Having heard the learned Counsel and on perusal of the record, it is noticed that the arbitration agreements are undisputed. These arbitration agreements in the form of purchase orders contain following arbitration clause: "7.0 ARBITRATION: Any disputes, differences, whatsoever, arising between the parties out of or relating to the construction, meaning, scope, operation or effect of this contract shall be settled between the Employer and the contractor amicably. If however, the Employer and the Contractor are not able to resolve their disputes/differences amicably as aforesaid the said disputes/differences shall be settled by conciliation, failing which, through Arbitration at City of Kolkata." 7. The record further reflects that the applicant had submitted the claim for balance amount of Rs. 33, 49, 343.52 on 17th March, 2017. Thereafter, the deliberations took place and in the meeting dated 14th August, 2018, the respondents had agreed to release balance amount by December, 2018. But thereafter, some dispute again arose, hence, the amount has not been received. Thus, the procedure for amicable settlement has been exhausted. 8. That apart in the affidavit-in-opposition, the respondent has claimed the liquidated damages and RPN cost to the tune of Rs. 8.94 lakhs, hence, the amicable settlement is not possible now. The Hon'ble Supreme Court in the matter of VISA International Limited Vs. Continental Resources (USA) Limited, (2009) 2 SCC 55 , in a case where in spite of the attempt, amicable settlement could not be arrived at and there was no further scope for amicable settlement, has found it to be a proper case for appointment of the arbitrator. 9. That apart, the Hon'ble Supreme Court in the matter of Mayavati Trading Private Limited Vs. Pradyuat Deb Burman, (2019) 8 SCC 714 , considering Section 11(6-A) and the effect of 2019 Amendment Act has held that the effect of omission of Section 11(6-A) would not be to resuscitate the law that was prevailing prior to the Amendment Act of 2015. 10. Pradyuat Deb Burman, (2019) 8 SCC 714 , considering Section 11(6-A) and the effect of 2019 Amendment Act has held that the effect of omission of Section 11(6-A) would not be to resuscitate the law that was prevailing prior to the Amendment Act of 2015. 10. In view of the aforesaid, I am of the opinion that since the arbitration agreement exist between the parties and the attempt for amicable settlement has failed and considering the stand of the parties, now the amicable settlement is not possible and also considering the limited scope of proceedings under Section 11 of the Act, I am of the opinion that a case is made out to appoint the sole arbitrator to resolve the dispute between the parties. 11. Accordingly, the A.P. No. 366 of 2021 is allowed and Mr. Kaushik Dey, Advocate, Bar Association Room No. 2, (9830467715) is appointed as arbitrator to resolve the dispute between the parties.