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2009 Supreme(Del) 65

IN THE HIGH COURT OF DELHI AT NEW DELHI
HONBLE MR. JUSTICE S. RAVINDRA BHAT

W.P.I.L. - Plaintiff
versus
NTPC Ltd. & Ors. - Defendants
Decided On : 16.01.2009

IA Nos.2803/2006, 14366/2006 & 14367/2006 in CS (OS) No. 1363/2005

Advocates Appeared:
Mr.T.K. Ganju, Sr.Adv. with Ms.Ekta Kapil and Mr.Sindhu Sinha, Advocates
Mr.Valmiki Mehta, Sr.Adv. with Ms.Ayushya Kumar, and Ms.Akansha Sharma, Advocates for D-1.
Mr.Rajeev Nayyar, Sr.Adv. with Mr.Sanjay Kumar, Mr.Abhinav Mukerji, Advocates for D- 2 & 3.

Headnote:Specific Relief Act, 1963 Section 14(2) - Arbitration & Conciliation Act, 1996 - Section 8 - Arbitration agreement - Unworkability is not a ground afforded by law makers to thwart indefeasible rights to arbitral proceedings - Court cannot through an interpretive mechanism create exceptions from the obligation to relegate parties to arbitration when no explicit ground exists - plaintiff rushed to court, ignoring the arbitration clause - plaint rejected as not maintainable.

       

S.RAVINDRA BHAT, J.

1. The present common order will disposed off several applications by the parties, viz I.A. 2803/2006 , under Section 8 of the Arbitration and Conciliation Act (hereafter „the Act?); I.A. 14366/06 under Order I, Rule 10 and I.A. 14367/06, under Section 45 of the Act.

2. The brief facts necessary to dispose of the applications are summarized as follows. Pursuant to the first defendant?s (hereafter “the NTPC”) invitation for bids for supply of a cooling water system package, for its SIPAT Thermal Power Project, Stage 1, Bilaspur at Chahatisgarh, the plaintiff submitted its bid. In terms of Clauses 7.1 and 7.3, of the instruction for Bidders (“IFB”, which, together with the terms of the bid, general terms and conditions, etc, formed the tender documents) a bidder could club the experience of associates, to enable fulfillment of eligibility conditions as regards previous experience in constructing similar works (and specified works, under the tender documents). One condition was that in such cases, if another concern was involved as an associate, it had to submit a Joint Deed of Undertaking (JDU) to the NTPC.

3. The second defendant (hereafter „Alstom?) entered into an agreement with the plaintiff on 19.08.2004 (hereafter “the Project Agreement”). Clause 2.1 of that agreement spelt out the purpose, i.e. preparation and submission of tender to the NTPC: Clause 7.3 of the IFB, to enable the plaintiff to qualify for the bid, was spelt out in this agreement with Alstom. Clause 4.7 recorded Alstom?s obligation to sign a joint deed of undertaking, with the plaintiff, to be furnished to the NTPC. A bank guarantee to the extent of 1% of the total value of the contract, was to be furnished to NTPC. Clauses 9 and 10 read as follows:

“9.0 Disputes:

9.1 Any dispute arising in connection with the interpretation or performance of the Agreement shall be settled through Arbitration.

9.2 The arbitration shall take place at Paris (France) under the Rules of Conciliation and Arbitration of the International Chamber of Commerce, Paris by one or more Arbitrators appointed in accordance with the said rules.

10.0 Applicable Law:

10.1 The Agreement shall be governed by construed in accordance with the substantive law of France.”

4. A JDU, in terms of the IFB, had been executed by the plaintiff and Alstom. In terms of the JDU, Alstom declared and undertook its joint and several responsibility to the NTPC (described as “the owner”) for the successful performance of the Pumps, under the plaintiff?s contract with NTPC and also technically guaranteed the equipment. By clause 6 of the JDU, Alstom undertook to furnish a bank guarantee equal to 1% of the total value of the contract between NTPC and the plaintiff. Clause 8 of JDU stated that the undertaking was „?irrevocable” and formed “an integral part of the contract”. “Contract” was defined as the bid, furnished by the Plaintiff, being accepted by NTPC.

5. The plaintiff furnished its bid to the NTPC on 25.09.2004, along with a bank guarantee for Rs.2,35,05000/- favoring it, valid till 03.09.2005. It further alleges that NTPC?s officers visited Alstom?s offices in France in April 2005, to satisfy themselves about feasibility of its equipment after which the plaintiff?s bid was accepted on 31.05.2005. Clause 6 of the General Condition of Contract, (hereafter “GCC”) awarded by the NTPC to the plaintiff, reads as follows:

“6. (A). Adjudicator:

i. If any dispute of any kind whatsoever shall arise between the Employer and the Contractor in connection with or arising out of the Contract, including without prejudice to the generality of the foregoing, any question regarding its existence, validity or termination, or the execution of the Facilities or after their completion and whether progress of the Facilities or after their completion and whether before or after the termination, abandonment or breach of the Contract- the parties shall seek to resolve any such dispute

















































































































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