The main legal point established is that claims may not be arbitrable if the contract is discharged by performance and there are no outstanding claims or disputes. Additionally, a party must establish coercion and duress to challenge a discharge agreement.

Manmohan Singh, J.

1. By this order I propose to decide the present petition filed by the petitioners under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of Arbitral Tribunal to adjudicate all disputes between the parties in terms of Clause 59 of the Contract dated 24th December, 2008 (hereinafter referred to as “the Contract”).

Petitioners’ Case

2. The case of the petitioners is that the petitioners Consortium (the Contractor) and respondent (the Employer) entered into the Contract for laying, testing and commissioning of Vijaipur-Dadri Pipeline Section and Associated Facilities (Section-C) for Vijaipur-Dadri-Bawana Pipeline Project of the respondent that was awarded to the consortium on 12th September, 2008.

3. It is submitted by the petitioners that while the petitioners consortium has duly fulfilled its obligations under the contract, the respondent and its consultant Engineers India Ltd. (EIL) failed to duly fulfil its obligations. As a result, there was delay in completion of the project for reasons wholly attributable to the respondent and its consultant, due to which the petitioners have suffered a huge loss for which they have unjustly not been compensated by the respondent despite several requests, representations and reminders. As a result, disputes have arisen between the petitioners/contractor and the respondent/employer that can be resolved only through arbitration as agreed by the parties in the said contract dated 24th December, 2008.

3.1 There were numerous reasons for the inordinate delay in completion of the contract including but not limited to Release of Right of Use (ROU) by the respondent being discontinuous and beyond grace period; frequent interferences and work stoppages by land owners for various reasons attributable to the employer/respondent and its consultant.

3.2 The petitioners had to maintain resources beyond the contractual completion date to complete the works in all respects and for doing the same the petitioners had to incur additional costs.

3.3 While asking for extension of time for completion of the said contract, the petitioners also sought for extended stay compensation vide letter dated 14.07.2010 wherein it clearly highlighted that due to the delay in RoU release for which the employer/consultant were solely responsible, the petitioners were entitled to invoke Clause 42.0 of the Special Conditions of the Contract (SCC).

3.4 Vide letter dated 12th April, 2011, the petitioners again raised its legitimate claim for extended stay compensation under clause 42 of the SCC wherein it clearly demonstrated its eligibility for extended stay compensation by highlighting the non-fulfilment of numerous contractual obligations on part of the respondent and its consultant resulting in delay of completion of the said contract.

4. It is alleged that the petitioners’ legitimate claim for compensation by letter dated 12th April, 2011 was not considered favourably by the Engineer-in-Charge (EIC), who by letter dated 23rd April, 2011 unjustifiably alleged contributory delay on part of both parties whereas it was amply clear that the delay in completion of the contract dated 24th December, 2008 was caused due to reasons that were wholly attributable to the respondent and its consultant. The rejection by the EIC by letter dated 23rd April, 2011 is wholly illegal, contrary to the terms of the contract, unsustainable and unjustified.

5. It is averred that the respondent misused its dominant position and along with its consultant threatened to withhold payment of the undisputed amount of Rs.11,08,83,385/- for work done by the petitioners under the said contract along with retention money for a sum of Rs.19,69,72,667/- whilst further threatening to withhold the release of the performance bank guarantees furnished by the petitioners under the contract unless the petitioners agreed in writing that there was concurrent delay on its part and issue No-Claim Certificate and a