The main legal point established in the judgment is that the authorization of the initial reference to the DRB was not affected by the legal succession of the parties involved.

JUDGMENT :

G.S. Patel, J.

1. This common order and judgment will dispose of this group of Appeals filed against two orders of 24th March 2011 by a learned Single Judge of this Court setting aside a set of arbitral awards. Appeal No. 495 of 2011 is against the order in Arbitration Petition No. 591 of 2008. This is the principal appeal because all the other appeals received an order of the same date (in arbitration petitions Nos. 592 of 2008, 593 of 2008, 226 of 2009, 227 of 2009 and 228 of 2009) on the basis of the order impugned in Appeal No.495 of 2011.

2. We have heard Mr Andhyarujina, learned Senior Advocate for the Appellants and Mr Apte, learned Senior Advocate for the Respondents, the Municipal Corporation of Greater Mumbai (“MCGM”).

3. A brief chronology will provide the necessary context. The project in question related to municipal sewerage works, and, specifically, marine outfalls at Worli and Bandra. The contracts were funded by the World Bank. The original contractor successfully obtained the bid was one Dyckerhoff & Widmann AG, a German company (“D&W”). The contract was awarded to D&W on 21st August 1995. On 15th October 1996, D&W gave a power of attorney to one Dimitrius D’Mello to represent it in connection with the Bandra sewerage project–Bandra and Worli outfalls, Contract 2FF–3FF.

4. The contract proceeded. A few years later, on 6th November 1999, D&W formed a 100% subsidiary called Dywidag International GmbH, another German company (“DI”). On 22nd March 2000, D&W and DI executed what is called a Contribution Agreement along with a declaration of acceptance. This did not affect D&W’s contractual obligations under the sewerage project(s).

5. Between 17th May 2001 and 29th June 2001 there was a Merger Agreement between D&W and the present Appellant, Walter Bau AG (“Walter Bau”). It is at this stage we that must refer to certain provisions of the contract in question. As is or was usual with such MCGM contracts, disputes between the MCGM as the owner on the one hand and its contractor on the other were required to refer to what is called a Disputes Review Board (“DRB”). This is provided in clause 67 of the contract which is extracted at pages 493 and 494. The arbitration clause 67.3 is at page 495. Broadly stated, these contracts require that disputes be first referred to the DRB, which makes its recommendations. If these are not accepted, then there follows a reference to arbitration. The relevant clauses, both sides accept, were substituted for the originals, as follows:

“Sub-Clause 67.1 is substituted by the following:

Sub-Clause 67.1 Disputes Review Board

If any dispute arises between the Employer and the Contractor in connection with, or arising out of, the Contract or the execution of the Works, whether during the execution of the Works or after their completion and whether before or after the repudiation or other termination of the Contract, including any disagreement by either party with any action, inaction, opinion, instructor, determination, certificate or valuation of the Engineer, the matter in dispute shall, in the first place be referred to the Disputes Review Board (“the Board”).

The Board shall be established by the signing of a Board Member’s Declaration of Acceptance (as required by paragraph 12 of Annex A to these Conditions of Particular Application) by all three Board Members.

The Board shall comprise three Members experienced with the type of construction involved in the Works and with the interpretation of contractual documents. One Member shall be selected by each of the Employer and the Contractor and approved by the other. If either of these Members is not so selected and approved within 84 days of the date of the Letter of Acceptance, then upon the request of either or both parties such Member shall be selected as soon as practicable by the Appointing Authority specified in the Appendix to Tender. The third Member shall be selected by the other two and approved by the parties. If the two Membe