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2016 Supreme(Del) 2242
IN THE HIGH COURT OF DELHI AT NEW DELHI
MANMOHAN SINGH, J.
SMS AAMW TOLLWAYS PRIVATE LIMITED - Petitioner
versus
SOUTH DELHI MUNICIPAL CORPORATION - Respondent
ARB.P. 475/2015
Decided On : 17-06-2016
For the Appellant : Mr.Sachin Datta, Sr. Adv. with Ms.Gayatri Verma, Ms.Prity Sharma & Ms.Nauras Suhrawardy, Advs.
For the Respondent: Mr.Sudhir Nandrajog, Sr. Adv. with Ms.Eshita Baruah & Mr.Gaurang Kanth, Advs.
The main legal point established in the judgment is the court's interpretation of the relevant clauses in the agreements as arbitration clauses, and the appointment of an arbitrator to adjudicate the disputes.
Headnote:
Arbitration - Toll Collection Dispute - Arbitration and Conciliation Act, 1996, Section 11(6) - 9.1, 16.1, 16.2, 16.3 - The court held that the attributes of an arbitration agreement are present in Clause 9.1 of the State Support Agreement (SSA) and Clause 16 of the Bilateral Agreement, and inferred that the parties were ready to resolve all disputes arising out of or in relation to the agreement through arbitration. The court appointed an arbitrator to adjudicate the disputes and allowed the parties to file their respective claims and counter-claims before the arbitrator.
Fact of the Case:
The petitioner, a toll collection company, filed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of an arbitrator to resolve disputes with the respondent, South Delhi Municipal Corporation (SDMC), arising from toll collection agreements. The petitioner alleged substantial losses and disputes related to toll collection and increased entry fees.
Finding of the Court:
The court found that the attributes of an arbitration agreement were present in the relevant clauses of the agreements, and inferred that the parties were ready to resolve their disputes through arbitration. The court appointed an arbitrator and allowed the parties to file their claims and counter-claims before the arbitrator.
Issues: The main issue was the maintainability of the petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, and the interpretation of the relevant clauses in the agreements as arbitration clauses.
Ratio Decidendi: The court held that the attributes of an arbitration agreement were present in the relevant clauses of the agreements, and inferred that the parties were ready to resolve their disputes through arbitration. The court appointed an arbitrator to adjudicate the disputes.
Final Decision: The court allowed the petitioner's prayer, appointed an arbitrator, and directed the parties to appear before the arbitrator for directions.
MANMOHAN SINGH, J.
1. The petitioner has filed the abovementioned petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the “Act”). Initially, the petition was filed against the respondents including South Delhi Municipal Corporation (SDMC). However, by order dated 22nd September, 2015 on the statement of the learned counsel for the petitioner, the names of the respondent Nos. 2 to 6 were deleted from the array of the parties.
2. Brief facts of the case as per petition are that the petitioner is a company registered under the Companies Act, 1956, having its corporate office at K-17, AB, Ground Floor, Kalkaji, New Delhi - 110019. The petitioner is engaged in, amongst other activities, the process of developing and operating Toll Tax barriers, Posts and Toll Plazas etc. on highways and roadways.
2.1 The petitioner has been involved in the toll collection process from the Rajokri Toll Plaza, an integrated toll plaza, the toll collection which is governed by the provisions of the State Support Agreement (hereinafter referred to as "the SSA") dated 27th May, 2004/22nd February, 2005. The understanding under the said SSA is that the Concessionaire of the NHAI shall not only collect the toll under the concession agreement executed between NHAI and its Concessionaire, but also the entry toll levied by the respondent-SDMC on entry of commercial vehicles into the territory of NCT of Delhi. The respondent is a 'designated agency' of the Government of NCT of Delhi under the SSA.
2.2 The respondent floated a tender for "Engagement of a Contractor by MCD for toll collection at border points from specified commercial vehicles entering Delhi", which was awarded to the petitioner vide Award letter dated 14th May, 2011, and a Bilateral Agreement was also executed by the petitioner and respondent-SDMC on even date. Under the agreements, the petitioner is obliged to pay an amount of Rs. 26.00 Crore every month to the respondent in lieu of the tax collected from all entry points of NCT of Delhi, however, the said toll tax for Rajokri integrated toll plaza is collected vide the mechanism elaborated under the SSA i.e. it is collected by NHAl's Concessionaire and passed on to the petitioner. The cumulative effect of the SSA and the Bilateral Agreement executed in pursuance of the SSA to effectively fulfil the terms of the SSA, is that the entry toll tax thus collected by NHAl's Concessionaire is passed onto the petitioner after deduction of services charges.
2.3 The scope of activities, roles and responsibilities contemplated under the SSA [Clause 3.1 (xii)], and the terms of the Bilateral Agreement [Clause 8.5.2 which establishes the maximum rate of service charge to be paid by the petitioner to NHAI's Concessionaire; and Clause 8.6.5 which expressly binds the petitioner to honour the SSA whereby the Rajokri toll plaza was made an integrated toll plaza] executed pursuant thereto makes it abundantly clear that the petitioner as well as the respondent No.1 SDMC are inextricably involved with the toll collection process of integrated toll plazas under the SSA. The petitioner has been expressly recognized as a "designate agency" under the SSA and has been obliged to deal with NHAI's concessionaire.
3. Clause 9 of the SSA provides for settlement of disputes by way of arbitration.
4. It is not denied by the respondent that the said arbitration clause was invoked and relied upon by the respondent-SDMC vide OMP No. 171 of 2014 (a petition under Section 9 of the Arbitration and Conciliation Act, 1996) instituted by it before this Court.
5. Even in the Bilateral Agreement, the intention of the parties has always been to resolve issues and disputes through the process of arbitration, by way of appearing before an Authority, raising their contentions and adducing evidence in support of such contentions. It is admitted by the respondent that there is process of disputes resolution provided as per Clause 16 of th
