ORDER

1. This is an application under Section 11 (6) read with Section 11 (12) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act") and relates to a dispute under an agreement between a foreign company and an Indian company. The application is filed by an Indian company against the foreign company seeking reference of the disputes to an arbitrator. The claim of the petitioner is that the respondent Company is liable to pay the petitioner a sum of Rs 98,72,68,531 as per Annexure P-1 with interest at the rate of 21 % per annum; the petitioner is entitled to interest pendente lite and future interest on the amount claimed from the date of the petitioner invoking arbitration till the date of decree by a competent forum at 21 % per annum and cost of arbitration from the respondent Company.

2. The relevant facts set out in the petition by the petitioner are as follows:

The petitioner is a public limited company incorporated under the Indian Companies Act, 1956 having its registered office at New Delhi. The respondent Company is registered and incorporated in Malaysia as per Malaysian laws and it has its principal place of business at Level 8, Mentara Sunway, Jalan Lagoon Timur, Bandor Sunway, 46150 Petaling Jaya, Selangor Darul Ehsan, Malaysia. It has its office at New Delhi and it is carrying on contract work for constructing, rehabilitation and upgradation of NH 25 to four lane configuration in the State of Uttar Pradesh, being a part of East- West Corridor Project (EWC Project) on the terms and conditions contained in the letter of acceptance dated 30-6-2005 issued by the National Highway Authority of India (NHAI). The said project is funded by International Lending Agency and is being executed with funds from Asian Development Bank.

3. On 19-11-2005, the petitioner entered into a contract with the respondent Company for construction of one-third portion of the d abovementioned stretch of the NH from 143.6 km to 170 km. The total value of this subcontract is to the tune of Rs 1,34,37,91,938. Three separate agreements were entered into between the parties herein on 22-12-2005.

4. On 29-11-2005, the petitioner furnished performance bank guarantee to the respondent Company in the sum of Rs 6,71,89,597 which was valid till 30-4-2009. The petitioner also furnished mobilisation advance bank e guarantee to the respondent Company in the sum of Rs 6,71,89,597 on 16-12-2005 which was valid till 30-4-2009. In December 2005, the petitioner mobilised its resources to commence the work at site. It is stated that on 4-32006, the respondent Company belatedly released Rs 6,09,72,130 as mobilisation advance to the petitioner. Apart from the financial crunch, the petitioner faced several difficulties and hindrances in the execution of the contract which was duly intimated to the respondent Company, but to no avail.

5. On 3-1-2007, the petitioner filed a petition under Section 9 of the Act in the High Court of Calcutta seeking direction to restrain the respondent Company from encashing the bank guarantee tendered by the petitioner and 9 further not to supplement the petitioner with any other contractor which was later on dismissed as withdrawn.

6. The petitioner stated that on 20-3-2007, a meeting was held between the respondent Company and NHAI where the respondent Company has acknowledged such difficulties being faced by the petitioner at the site. On 12-4-2007, second meeting was convened between the respondent Company and NHAI where again NHAI was informed by the respondent Company about the lack of funds and other problems being faced at site.

7. On 28-4-2007, the respondent Company threatened to terminate the work order allegedly as per Clause 14 of the agreement dated 19-11-2005. On 3-5-2007, the petitioner sent reply to the letter refuting the allegations levelled by the respondent Company and apprising it of the ground realities as admitted by the respondent Company before NHAI in meetings held on 203-2007 an