The central legal point established in the judgment is the requirement for a demonstrated consensus ad idem to refer disputes to arbitration and the existence of all four elements set out in Jagdish Chander vs. Ramesh Chander and ors., (2007) 5 SCC 719.

JUDGMENT :—

Dhargalkar Technoesis (I) Pvt. Ltd (“DTIPL”) applies for an order under section 11 of the Arbitration and Conciliation Act, 1996, referring contractual disputes between it and the Mumbai Metropolitan Regional Development Authority (“MMRDA”) [A State Government authority constituted under the Mumbai Metropolitan Region Development Authority Act, 1974.] to arbitration. DTIPL says there is a valid and binding arbitration agreement. MMRDA says there is not.

2. Sixteen years ago, in 2004, MMRDA invited Expressions of Interest from eligible consultants. They were to be empanelled as consultants for proof checking and supervision consultancy on rehabilitation tenement construction projects. DTIPL put in a bid. MMRDA accepted it by its letter of 31st May, 2004. A formal contract followed on 21st June, 2004. This is the subject matter of the present application. I am not concerned, in a section 11 application, with the minutiae of the disputes between these parties. The only question is whether or not there exists an arbitration agreement.

3. There is the DTIPL-specific contract itself, and then there are the “General Conditions”. [At some places, the reference is to SC or Special Conditions. Both sides agree that the reference to SC or GC are to be read interchangeably to mean the same thing, viz., the conditions from page 71 of the paper book. The caption on that page is “General Conditions”.]

4. Clause 8 of the Contract says this : [Application, p. 92.]

8. Settlement of Disputes

8.1 Amicable Settlement

The Parties shall use their best efforts to settle amicably all disputes arising out of or in connection with this Contract or the interpretation thereof

8.2 Dispute Settlement Any dispute between the Parties as to matters arising pursuant to this Contract which cannot be settled amicably within thirty (30) days after receipt by one Party of the other Party’s request for such amicable settlement may be submitted by either Party for settlement in accordance with the provision specified in the SC.

5. This clause was amended by the GC. It was substituted with the following : [Application, p. 96.]

8.2 Dispute Settlement For any dispute, matter will be referred to Jt. Metropolitan Commissioner and Project Director, MMRDA, and his decision will be final.

6. Mr. Sawant says this is a sufficient arbitration clause. Mr. Khaire for MMRDA maintains that this does not satisfy the requirements of an arbitration agreement at all.

7. Clause 7.2 of the GC [Application, p. 92.] is part of a general section on “Fairness and Good Faith”. [Application pp. 91–92] Clause 7.2 says :

7.2 Operation of the Contract

The Parties will use their best efforts to agree on such action as may be necessary to remove the cause or causes of such unfairness, but no failure to agree on any action pursuant to this Clause shall give rise to a dispute subject to arbitration in accordance with Clause GC 8 hereof.

8. Mr. Sawant submits that the last portion of this clause makes it clear that it was always the intention of the parties that Clause 8.2 would be understood to mean the agreement of the parties to refer any disputes to arbitration. All that Clause 7.2 says is that a failure of good faith efforts is to be seen as an arbitrable dispute. But that does not mean there is no arbitration agreement. To the contrary; Clause 7.2 clearly posits that except for any failed good faith settlement, other disputes are specifically arbitrable.

9. He invites my attention to the “Termination” clauses in the SC/GC. This is clause 2.9. [Application, pp. 77–79.] It is in two parts. Clause 2.9.1 and its sub-clauses deal with termination by the client, i.e. MMRDA. Clause 2.9.2 and its sub-clauses have corresponding provisions for termination by the Consultants, DTIPL. Clause 2.9.1(c) [Application p. 77.] is one of the grounds on which MMRDA can terminate. It reads thus :

2.9 Termination

2.9.1 By the Client

The Client may, by not less 1ess than thirty (30) days’ written notice of termination