Zonta Infratech Private Limited v. Kochi Municipal Corporation, Represented By Its Secretary
2025-09-15
M.A.ABDUL HAKHIM
body2025
DigiLaw.ai
ORDER : M.A.ABDUL HAKHIM, J. 1. This is an application under Section 11 (6) of the Arbitration and Conciliation Act, 1996 , to appoint an Arbitrator invoking Clause 39 of Annexure 1 Agreement executed by the petitioner with the 1 st respondent. Annexure 1 Agreement is with respect to the rehabilitation of municipal solid waste by the petitioner from the Brahmapuram dumping yard of the 1 st respondent. Since the 2 nd respondent was the nodal agency for the 1 st respondent for procuring the contract through bid, the 2 nd respondent is also impleaded in this Arbitration Request. 2. The Arbitration Request is opposed by the respondents by filing separate Counter Affidavits. 3. According to the petitioner, they have certain claims against the 1 st respondent which are detailed in Annexure 2 Notice issued to the respondents proposing to appoint an Arbitrator invoking the arbitration clause contained in Annexure 1 Agreement. They also reserved their right to make additional claims before the Arbitrator after the constitution of the arbitration Tribunal. The Annexure 2 Notice was replied to by Annexure 5 by the 1 st respondent and Annexure 3 by the 2 nd respondent. Since the 1 st respondent refused to accede to the request of the petitioner for the appointment of an Arbitrator, the present Arbitration Request is filed. 4. The contention of the 1 st respondent is that there is no arbitrable dispute to be decided at the instance of the petitioner, whereas the 1 st respondent has sustained a loss which is estimated at Rs.121.24 Crores and the 1 st respondent is having valid claims against the petitioner. Since the petitioner violated the terms of Annexure 1, Annexure 1 was terminated by the 1 st respondent by issuing a Termination letter and blacklisting the petitioner. The contention of the 2 nd respondent is that the 2 nd respondent was only a nodal agency and their function is limited to the identification of a contractor; that since their work is over, the 2 nd respondent has nothing to do with the dispute between the petitioner and the 1 st respondent arising out of the Annexure 1 Agreement. 5. I heard the learned Senior Counsel for the petitioner, Sri.Pramod Nair, instructed by Sri. Jaykar K.S., and the learned counsel for the 1 st respondent, Sri. D.G. Vipin and the learned counsel for the 2 nd respondent, Sri. P.U.Shailajan. 6.
5. I heard the learned Senior Counsel for the petitioner, Sri.Pramod Nair, instructed by Sri. Jaykar K.S., and the learned counsel for the 1 st respondent, Sri. D.G. Vipin and the learned counsel for the 2 nd respondent, Sri. P.U.Shailajan. 6. The learned Senior Counsel for the petitioner invited my attention to the arbitration clause as Clause 39 available in Annexure 1 Agreement. The learned Senior Counsel contended that none of the contentions raised by the 1 st respondent would stand in the way of appointing an Arbitrator by this Court in this application. The learned counsel invited my attention to Annexure 4 Termination Notice issued by the 1 st respondent, terminating the contract, invoking Clause 10 of Annexure 1 Agreement and further making monetary claims against the petitioner. The learned Senior Counsel contended that there are monetary claims from both sides against the other. The legality of the termination is also a matter to be adjudicated. All these are to be adjudicated by the Arbitrator in terms of the arbitration clause available in Annexure 1 Agreement. 7. On the other hand, the learned counsel for the 1 st respondent contended that the petitioner does not have a valid claim against the 1 st respondent. It is the petitioner who has violated the contract, and hence, the 1 st respondent has issued Annexure 4 Termination Notice in this matter. The present claim is made by the petitioner only as a defense for the claims made by the 1 st respondent against the petitioner. Since there is no arbitrable dispute revealed either from the pleadings or from the Annexure 2 Notice, the arbitrator need not be appointed in this matter at the instance of the petitioner. 8. The learned counsel for the 2 nd respondent contended that the 2 nd respondent is neither a necessary nor a proper party in the dispute between the petitioner and the 1 st respondent and the 2 nd respondent need not be unnecessarily dragged to the arbitration proceedings. The 2 nd respondent has no role in the matter of adjudication of the dispute between the petitioner and the 1 st respondent arising out of the Annexure 1 Agreement. 9. I have considered rival contentions. 10. The execution of the Annexure 1 Agreement and the existence of the arbitration clause therein are not disputed by the parties in this Arbitration Request.
9. I have considered rival contentions. 10. The execution of the Annexure 1 Agreement and the existence of the arbitration clause therein are not disputed by the parties in this Arbitration Request. The learned counsel for the 1 st respondent contended that a fire broke out in the Brahmapuram dumpsite, which is the subject matter of Annexure I, on account of the negligence of the petitioner and the 1 st respondent is liable to be compensated by the petitioner in this regard. On the other hand, the petitioner claims compensation, alleging loss to them on account of the action on the part of the 1 st respondent. The petitioner alleges violation of the terms and conditions of Annexure 1 Agreement by the 1 st respondent, whereas the respondent No.1 alleges violation of the terms and conditions of Annexure 1 Agreement by the petitioner. Both sides make huge monetary claims against each other. It is on record that the 1 st respondent has issued the Annexure 4 Termination Notice, terminating the Annexure 1 Agreement. The contention of the learned Senior Counsel for the petitioner is that the 1 st respondent is not having any valid ground or reason to terminate the Agreement and the petitioner is entitled to continue the contract. Whether the 1 st respondent is having valid ground or reason to terminate the contract or not is also a matter to be adjudicated by the Arbitrator apart from the adjudication of the monetary claims made by the petitioner and the 1 st respondent. Since both parties have claims against each other arising from the Annexure 1 Agreement, there could not be any dispute that the appointment of an arbitrator is necessary for adjudicating the claims of both parties. 11. Accordingly, I find that this Arbitration request is liable to be allowed in the interest of both parties. I find force in the contention of the learned counsel for the 2 nd respondent that they have no role in the matter of dispute between the petitioner and the 1 st respondent. As revealed from Annexure R2(a) Government Order and the terms of the Annexure 1 Agreement, the role of the 2 nd respondent is limited to the bidding process. The 2 nd respondent has no further role in the matter.
As revealed from Annexure R2(a) Government Order and the terms of the Annexure 1 Agreement, the role of the 2 nd respondent is limited to the bidding process. The 2 nd respondent has no further role in the matter. Hence, I find that the 2 nd respondent is neither a necessary nor a proper party in the arbitration proceedings between the petitioner and the 1 st respondent. The 2 nd respondent need not be unnecessarily dragged into the arbitration proceedings between the petitioner and the 1 st respondent. Accordingly, this Arbitration Request is allowed, and it is ordered as follows. 1. The Kerala High Court Arbitration Centre is directed to nominate a former Judge of this Court from Panel-I as the sole Arbitrator to resolve the disputes that have arisen between the petitioner and the first respondent under Annexure 1. 2. The learned Arbitrator may entertain all issues between the parties in connection with Annexure 1, including questions of jurisdiction and limitation, if any, raised by the parties. All contentions of the parties are left open and they are at liberty to raise their claims and counterclaims, if any, before the learned Arbitrator, in accordance with law. 3. The Registry shall communicate the substance of this Order to the Kerala High Court Arbitration Centre within ten days and the Centre shall inform the learned Arbitrator within a further period of one week and shall obtain duly signed Form 3 as required under Rule 20(4) of the Kerala High Court (Arbitration Centre) Rules, 2025 and forward the same to this Court. 4. Upon receipt of the Form 3, the Registry shall issue a certified copy of this order with a copy of the Form 3 appended to the Kerala High Court Arbitration Centre. The original of the Disclosure Statement shall be retained by the Kerala High Court Arbitration Centre. 5. The fees of the learned Arbitrator of the Kerala High Court Arbitration Centre shall be governed by Rule 28 of the Kerala High Court (Arbitration Centre) Rules, 2025. The manner in which the fees and costs payable by the parties shall be governed by Rule 27 of the Kerala High Court (Arbitration Centre) Rules, 2025. 6. If the learned Arbitrator needs the assistance of an expert, then he is at liberty to seek such assistance in the course of the arbitration proceedings.