2019 Supreme(Bom) 880

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
G.S. Kulkarni, J.
Consortium Comprising of Larsen & Toubro Limited and Another – Appellants
Versus
Mumbai Metropolitan Regional Development Authority – Respondent
Commercial Arbitration Application (L) No. 89 of 2019
Decided On : 24-07-2019

Headnote:

Arbitration and Conciliation Act, 1996 – Section 11 – Appointment of an arbitral tribunal – This is a petition under Section 11 of the Arbitration and Conciliation Act, 1996 whereby the applicants pray for appointment of an arbitral tribunal as per the General Conditions of the Contract for and on behalf of parties, for adjudication of the disputes which are stated to have arisen under the Contract Agreement for the work of "planning, design, development, construction/manufacture/supply, testing & commissioning the Monorail system including its operation and maintenance from Sant Gadge Maharaj Chowk Wadala Chembur Station" – Held, Principal argument as urged on behalf of the respondents, that the applicants have not complied with clause 20.1 of the GCC and which is condition precedent for invocation of the arbitration agreement cannot be accepted – In any event, an arbitral tribunal is not precluded from examining the issue of arbitrability of the disputes and an objection in the nature as urged on behalf of the respondent can certainly be examined by the arbitral tribunal. – It is well-settled that all issues on arbitrability are required to be gone into by the arbitral tribunal. – Court have discussed the effect of these clauses 20.1 to 20.9. – In the facts and circumstances of the case, Court is not inclined to accept the contentions as urged on behalf of the respondents that there was any embargo or any fetter for reference of the disputes to arbitration by holding that arbitration as contained in clauses 20.3, 20.4 read with clause 20.5 would not available to the applicant and reference of the disputes to arbitration should be denied to the applicants – Now coming to the decisions as relied on behalf of the respondent. – In Union of India vs Parmar Constructions Company Ltd (supra) the issue which fell for decision of the Supreme Court was in completely different set of facts. – As clearly seen from para 2 of this decision, the Supreme Court has observed that the question for determination was whether an arbitration agreement stands discharged and whether it was permissible for the High Court under section 11 (6) of the Act to appoint a third party as arbitrator independent of an arbitrator from a mutually agreed procedure. – It is in this context, the Supreme Court held in para 26 and 27 that in the facts of the said case, the amended provisions of the Act as brought out by the Amendment (Act 3 of 2016), would not be applicable as the said request was made and received by the applicant much before Amendment Act was brought into force. – The reliance on this decision therefore would not assist the respondent. – Decision in Indian Oil Corporation Ltd vs Raja Transport Ltd and Iron and Steel Co vs Tiwari Road lines (supra) is also a decision prior to the Amendment Act of 2015 and may not be relevant in the facts of the present case when in the present case invocation is admittedly after coming into force of the Amendment Act. – Further United India Insurance Company Ltd vs Hyundai Engineering Ltd. (supra) was a case in which the Supreme Court was considering an arbitration clause contained in the Insurance policy, wherein the parties had clearly agreed and understood that no difference or dispute shall be referable to arbitration if the insurance company has disputed the liability by not accepting the liability under the insurance policy. – It is in this context, and considering an earlier decision on a similar issue in Oriental Insurance Company Limited vs Narbheram Power and Steel Private Limited (supra) in the facts of the case held that the decision in Deuro Felgura (supra) on the effect of amended provisions would not be applicable. – In any event, the dispute in the present case, is too far different form the dispute arising under the insurance clause, so as to make the decision in United India Insurance Company (supra) applicable to the facts of the present case. – Court is of the clear opinion that the application would be required to be allowed – Application Allowed