IMPORTANT POINT
For invoking arbitration clause existence of an arbitrable dispute is sine qua non.
Contract attaching finality to decision of Chief Engineer violates arbitration clause and does not bar further judicial scrutiny.

JUDGMENT

1. Both these applications under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Arbitration Act”) have been filed seeking appointment of a sole arbitrator to go into the disputes and differences that the petitioner claims to have arisen out of two separate contract agreements entered into by and between the parties.

2. The facts in brief may be noted at the outset.

3. The petitioner is a consortium of two companies i.e. M/s JSC OGCC KazStoryService, a company incorporated under the laws of the Republic of Kazakhstan and KazStoryService Infrastructure India Private Limited incorporated under the Companies Act, 1956. The said consortium has been formed by an agreement dated 1st July, 2010 for the purposes of executing a contract that was to be awarded by the respondent for Pipeline Laying and Terminal Works for Dabhol – Bangalore Pipeline Project.

4. According to the petitioner, the respondent had floated a Tender for the said project in the year 2010 and the entire work was divided in 10 Spreads (A,B,C,D,E,F,G,H,I,J). While Arbitration Petition (Civil) No.36 of 2014 pertain to the award of work for Spread 'J', Arbitration Petition (Civil) No.38 of 2014 relates to the work awarded for Spread 'D'.

5. Pursuant to the bid(s) made by the petitioner, detailed letter(s) of acceptance was issued by the respondent on 13th December, 2010. According to the petitioner though in terms of the contracts it had mobilized its men and machinery, the work got jeopardized/frustrated as the respondent did not make available to the petitioner the Construction Right of use and permits in terms of Clause 28 of the Special Conditions of Contract (hereinafter referred to as “the SCC”). According to the petitioner, the respondent did not have the necessary work fronts with respect to SV station work. Furthermore, the petitioner has alleged that the respondent failed to provide necessary engineering inputs. Besides, there were frequent modifications with respect to drawings, extra work and delays in providing free issue materials. All these led to substantial delays in the execution of the works, such delay being attributable solely to the respondent.

6. According to the petitioner, on account of the delays due to the aforesaid reasons, the petitioner became entitled for extended stay compensation in terms of clause 42 of the SCC read with clause 12 of the detailed letter of acceptance. Apart from extended stay compensation, the petitioner claims to be entitled for payment for additional works undertaken during the course of execution of the contracts. On 4th January, 2013 and 5th July, 2013, the petitioner submitted its claim to the respondent for Rs.34,70,11,907/-(Rupees Thirty Four Crore Seventy Lacs Eleven thousand Nine hundered and seven only)[In Arbitration Petition (Civil) No.36 of 2014] and for Rs.1,79,23,83,208/-(Rupees One Arab Seventy Nine Crore Twenty Three Lacs Eighty Three thousand Two hundred and Eight only) [In Arbitration Petition (Civil) No.38 of 2014) respectively. The petitioner alleges that the respondent rejected the said claims which was not acceptable to the petitioner. The petitioner, thereafter, invoked clause 40.2 of the General Conditions of Contract which provides for conciliation. As the petitioner's proposal for conciliation was rejected by the respondent, the petitioner had no option but to invoke the Arbitration Clause (Clause 59) and seek appointment of a sole arbitrator in respect of the disputes arising from each of the two agreements. The said demand was repeated in several communications which were not responded to. The petitioner, therefore, has lodged the present applications under Section 11(6) of the Arbitration Act for the reliefs earlier noticed.

7. The claims made by the petitioner have been resisted by the respondent by filing separate counter affida