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2022 Supreme(Bom) 1601

IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD
SANDEEP V. MARNE, J.
M/s. Kay Vee Enterprises Engineers and Builders - Appellant
Versus
The Director & Secretary, Shri. Guru Gobind Singhji – Respondent
Arbitration Application No.10 of 2022
Decided on : 21-12-2022

Advocates:
Advocate Appeared:
For the Appellant :Mr. Sachin S. Deshmukh, Advocate
For the Respondent:Mr. S. V. Adwant a/w Mr. Harish S. Adwant and Ms. Neha B. Kamble, Advocate

The appointment of an Arbitrator should proceed if there is doubt about the subsistence of the disputes, and objections regarding claims should be left to be determined by the Arbitrator.

Headnote:

Arbitration - Appointment of Arbitrator - Arbitration and Conciliation Act, 1996, Section 11(6)

Fact of the Case:

The applicant filed for the appointment of an Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, for disputes arising from a contract. The respondent opposed the petition, claiming the applicant's claim was time-barred.

Finding of the Court:

The court found that the respondent's demand letter brought the claim within limitation, creating doubt about the subsistence of the disputes. The court appointed a sole Arbitrator to adjudicate the disputes, leaving all objections on merits and procedural aspects to be determined by the Arbitrator.

Issues: The main issue was whether the appointment of an Arbitrator could be made when the claim was allegedly time-barred.

Ratio Decidendi: The court held that if there is even the slightest doubt about the subsistence of the disputes, the rule is to refer the disputes to arbitration. The court also emphasized that objections regarding claims should be left to be determined by the Arbitrator.

Final Decision: The court appointed a sole Arbitrator to decide the disputes, leaving all objections on merits and procedural aspects to be determined by the Arbitrator.

JUDGMENT :

1. This application filed under the provisions of sub-Section 6 of Section 11 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act of 1996’) for appointment of an Arbitrator.

2. The relevant clause of the agreement between the parties reads thus:

    “56. All dispute and differences of any kind whatever arising out of or in connection with the Contract or the carrying out of the works whether during the progress of the works or after their completion and whether before or after the determination, abandonment or breach of the Contract) shall be referred to an settled by the Architect who shall sate his decision in wring such decision may be in the form of a Find Certificate or otherwise* The decision of the Architect with respect of any of the excepted matters shall be mal and withies appeal. But if either the Owner or the Contractor be dissatisfied with the decision of die Architects on matter, question of dispute of any land (except any of the excepted matters) or as to the withholding by the Architect of any certificate to which the Contractor may claim to be entitled then and in any such case either party (the owner of the Contractor) may within 25 days after receiving notice of such decision give a written notice to the other party through the Architect requiring that such matters in dispute be Arbitrated upon such written notice shall specify the matters which are in dispute be Arbitrate upon. Such written notice has been given and no other shall be and is hereby referred to the Arbitration and final decision of a single Arbitrator being a Fellow of the Indian Institute of Architect to be agreed upon and appointed by both the parties or in case of disagreement as to the appointment of a single Arbitrator to the Arbitration of two Arbitrators both being fellows of the Indian Institute of Architects one to be appointed each party, which Arbitrates shall before taking upon themselves the burden of reference appoint an Umpire. The Arbiter, the Arbitrators of the Umpire as the case may be shall have power to open up review and any certificate, opinion, decision, requisition or notice save in regard to the excepted matters referred to in clause 55 and to determine all matters in dispute which shall be submitted to him or them and of choice shall have been given as aforesaid. Upon every at any such reference the cost of and incidental to the reference and Award respectively shall be in the direction of the Arbitrator or Arbitrators or the Umpire as the case may be who may determine the amount thereof or direct the same to be taxed as between Attorneys and Client or as between party and party und shall direct by whom and to whom and in what manner the same shall be borne and paid. This submission shall be deemed to be a submission to Arbitration within the meaning of the Indian Arbitration Act 1940 or any modification thereof for the time being in force, subject to the condition the prescribed statutory period of declaring awards can be extended by the consent of both the parties. The Award of the Arbitrator of the Arbitrators or the Umpire as the case may be shall be final and binding on the parties. Such reference except as to the withholding by the Architect of any certificates under Clause 49 to which the Contractor claims to be entitled shall not be opened or entered upon until after the completion or alleged completion of the works or until after the practical cessation of tie works arising from any cause unless with the written consent of the owner and the Contractor.

Provided always that the Owner shall not withhold the payment of an Interim Certificate nor the Contractor except with the consent in writing of the Architect in any way delay the carrying out of the works by reason of any such matters, question or dispute being referred to Arbitration but shall proceed with the work with all due diligence

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