The presence of an arbitration clause in contracts mandates resolving disputes through arbitration, validating a petitioner's request for an arbitrator nomination when invoked properly.

ORDER :

ASHOK S.KINAGI, J.

The petitioner filed this civil miscellaneous petition under Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996 (‘Act’ for short) to nominate any Former Judge of this Court as the Sole Arbitrator in terms of clause 24 of the Conditions of Contract read with clause 4 of the Special Conditions of Contract in the agreement dated 23.06.2022 vide Annexure-B to resolve the disputes/differences arising between the petitioner and the respondent.

2. Brief facts leading rise to the filing of this petition are as follows:

2.1. The respondent issued a tender notification calling for construction of storm water drains in various locations of Mysuru City. The petitioner, being a Class I Contractor, participated in the auction proceedings. and he was the successful bidder. Accepting the same, the respondent issued a letter of acceptance on 07.05.2022. Thereafter, the petitioner and the respondent entered into an agreement dated 23.06.2022 to complete the work within a period of 6 months at a contract price of Rs. 27,78,41,436.31/- excluding applicable GST. The respondent issued a work order on 24.06.2022 and the project has to be completed within 6 months from 24.06.2022 i.e., on or before 23.12.2022. The petitioner promptly commenced the work as per the work order by mobilising requisite men and machineries/equipments. The petitioner completed the work in all work fronts the respondent could provide. The petitioner was constrained to stop the ongoing work in the middle of the execution as per the instructions of the respondent in October 2023. The respondent issued a completion report on 20.04.2023. According to the completion report, the total value of the woirk executed under the contract amounted to Rs. 24,79,44,089/- plus applicable GST. The petitioner has suffered financial loss under various heads and counts to the tune of Rs. 7,37,92,472/- with interest at the rate of 24%. There is an arbitration clause in the agreement. The petitioner invoked the arbitration clause by issuing a notice dated 07.10.2024 vide Annexure-G under Section 21 of the Arbitration and Conciliation Act. The respondent did not reply to the arbitration notice. Hence, a cause of action arose for the petitioner to file this petition. Accordingly, prays to nominate the Sole Arbitrator.

3. Heard the arguments of learned counsel for the petitioner and learned counsel for the respondent.

4. Learned counsel for the petitioner submits that, pursuant to the work order issued by the respondent, the petitioner has completed the work to the tune of Rs. 24,79,44,089/- and because of the delay on the part of the respondent, the petitioner has suffered a huge loss of Rs. 7,37,92,472/- and the petitioner is entitled for the said amount along with interest at the rate of 24%. He submits that, there is an arbitration clause in the agreement. The petitioner, by issuing a notice under Section 21 of the Act, invoked the arbitration clause by proposing the name of Sri. Basavaraj Koti, retired Chief Engineer (Civil), Mysuru as an Arbitrator to adjudicate the dispute between the petitioner and the respondent. He submits that, the respondent did not reply to the arbitration notice. Hence, on these grounds, he prays to allow the petition.

5. Per contra, learned counsel for the respondent submits that, there is no arbitral dispute between the petitioner and the respondent. Hence, she prays to dismiss the petition.

6. Perused the records and considered the submissions of the learned counsel for the parties.

7. The point that would arise for consideration is as follows:

Whether the petitioner has made out a ground to nominate the Arbitrator to resolve the dispute between the p