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2023 DIGILAW 344 (JHR)

BARBRIK-RCPL (JV), through its authorized signatory, namely, Punit Kumar Agarwal, son of Bir Kumar Agarwal v. State Highways Authority of Jharkhand (SHAJ), through its Member (Technical)

2023-03-17

S.K.MISHRA

body2023
JUDGMENT : 1. Heard the parties. 2. This is an application under Section 11(6) of the Arbitration and Conciliation Act, 1996. 3. The facts of the case are that the petitioner was granted a work order of development, maintenance and management for “Improvement and Upgradation to 2-Lane with Paved Shoulder Configuration of Dumka-Masalia-Kundhit Nala Road upto West Bengal Border (MDR-193) on EPC Mode”. 4. The State Highways Authority of Jharkhand (in short “SHAJ”) had issued a request for proposal from the intending bidders vide letter dated 16.07.2015. Subsequently, the petitioner i.e., BARBRIKRCPL (JV), being the lowest bidder was selected. The Contract Agreement was thereafter entered into between the parties on 19.09.2015. 5. Due to delay on the part of the SHAJ in handing over hindrance-free site as agreed, the petitioner allegedly suffered huge loss on account of idle sitting of plant, manpower, equipment, infrastructure, etc, and therefore, he made an application dated 04.07.2018 before the SHAJ. On the basis of recommendation of the Authority’s Engineer vide letter dated 19.07.2018, SHAJ was granted extension upto 30.12.2008. Vide letter dated 12.10.2018 the petitioner requested the authorities of the respondent for reimbursement of the excess amount paid towards GST and escalation as applicable on the contract vide letter dated 30.12.2020. The petitioner submitted its Statement of Claim for extra amount due and payable to them vide letter 03.12.2021 but the respondent gave no response. 6. In view of Clause 26.2 of the Article 26 of the Agreement, the petitioner again requested SHAJ vide letter dated 05.01.2022 in terms of Clause 26.2 of Article 26 of the Contract Agreement for amicable settlement of disputes. 7. In the meantime, since the arbitral agreement specifies for an arbitral tribunal – one arbitrator to be nominated by the contractor and one by the authority, the petitioner wrote a letter to the respondent indicating that it has nominated one former Engineer Sri Rama Shankar Mahalaha as the Arbitrator on their behalf. However, despite such things, the SHAJ did not take any step for appointment of the Arbitrator on their behalf. Hence, this petition. 8. The learned counsel for the SHAJ would submit that there has been a violation of Clause 26.2 of Article 26 of the Contract Agreement, hence, the matter cannot be referred to an Arbitrator. However, despite such things, the SHAJ did not take any step for appointment of the Arbitrator on their behalf. Hence, this petition. 8. The learned counsel for the SHAJ would submit that there has been a violation of Clause 26.2 of Article 26 of the Contract Agreement, hence, the matter cannot be referred to an Arbitrator. For better appreciation, the said clause is reproduced which reads as follows:- “26.2 Conciliation In the event of any Dispute between the Parties, either Party may call upon the Authority’s Engineer or such other person as the Parties may mutually agree upon (the “Conciliator”) to mediate and assist the Parties ni arriving at an amicable settlement thereof. Failing mediation by the Conciliator or without the intervention of the Conciliator, either Party may require such Dispute to be referred to the Chairman of the Authority and the Chairman of the Board of Directors of the Contractor for amicable settlement and upon such reference, the said persons shall meet no later than 7 (seven) business 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) business day 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 26.1.1 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 26.3.” 9. However, disputing the factual aspects of the contentions raised by the learned counsel for the respondent, the learned counsel for the petitioner would draw the attention of this Court to Annexure 5 at page 308 of the brief wherein the authorised signatory of the Joint Venture has requested the matter to be placed before the Chairman of the Authority and the Chairman of the Board for amicable settlement. Such letter has been sent on 05.01.2022 and as the authorities did not take action, the Joint Venture invoked the arbitration clause and appointed the aforesaid retired Engineer as their Arbitrator. 10. Such letter has been sent on 05.01.2022 and as the authorities did not take action, the Joint Venture invoked the arbitration clause and appointed the aforesaid retired Engineer as their Arbitrator. 10. In that view of the matter, this Court is of the opinion that the respondent has not taken a proper stand and they are resistant with the allegation which is factually erroneous. Hence, this Court is of the opinion that there being an arbitral agreement for a bona fide dispute between the parties, the matter should be referred to the Arbitrator. Since the petitioner has already appointed his Arbitrator, we direct the respondent to appoint an Arbitrator on their behalf also. In the meantime, this Court appoints Shri Justice Tapen Sen, a retired Judge of this Court, as the Independent Arbitrator to preside over the Arbitral Tribunal and adjudicate the dispute between the parties. Learned Arbitrator would be free to lay down the fees and other expenses towards conduct of the arbitration proceedings, however keeping into account the ceiling prescribed under Schedule IV of the Act of 1996 as amended. Learned Arbitrator would endeavor to conclude the proceedings expeditiously, also taking into regard the mandate of the Legislature under Section 29-A of the Act of 1996. 11. Let a photocopy of the entire pleadings along with copy of the entire order sheet be sent to the learned Arbitrator by the Registry. 12. This application stands disposed of accordingly. 13. All pending Interlocutory Applications stand disposed of. 14. Urgent copies as per Rules.