2016 Supreme(Del) 3078
IN THE HIGH COURT OF DELHI AT NEW DELHI
MANMOHAN SINGH, J.
SACHDEVA & COMPANY - Petitioner
Versus
DELHI-GURGAON SUPER CONNECTIVITY LTD - Respondent
ARB.P. 40 of 2016
Decided on : 22-08-2016
Advocate Appeared:
For the Petitioner: Mr.Arun Batta, Adv.
For the Respondent: Mr.D.Kishore Kumaar, Adv. and Mr.Ashish Dholakia & Mr.Gautam Bajaj, Advs.
The terms and conditions of the original contract, including the arbitration clause, are deemed to be part of the extended contract, and a specific reference is required to incorporate an arbitration clause from one contract into another.
Headnote:
Arbitration - Dispute Resolution - Arbitration and Conciliation Act, 1996 - Section 11 - 12
Fact of the Case:
The petitioner filed a petition under Section 11 of the Arbitration and Conciliation Act, 1996 for the appointment of an Arbitrator due to disputes arising from a contract for the supply of labor and services. The respondent contested the appointment, citing different terms and conditions in subsequent contracts and disputing the incorporation of the arbitration clause from the original contract.
Finding of the Court:
The Court found that the terms and conditions of the original contract, including the arbitration clause, were deemed to be part of the extended contract. The Court also emphasized the need for a specific reference to incorporate an arbitration clause from one contract into another. The Court held that the petitioner could approach the institution to decide the disputes, rendering the present petition not maintainable.
Issues: The main issue revolved around the incorporation of the arbitration clause from the original contract into subsequent contracts, and the validity of the petitioner's request for the appointment of an Arbitrator under Section 11 of the Act.
Ratio Decidendi: The terms and conditions of the original contract, including the arbitration clause, were deemed to be part of the extended contract. A specific reference is required to incorporate an arbitration clause from one contract into another. The parties were advised to approach the institution to decide the disputes.
Final Decision: The present petition was deemed not maintainable and accordingly disposed of.
MANMOHAN SINGH, J.
1. The petitioner has filed the present petition under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the “Act”) for the appointment of an Arbitrator to adjudicate the disputes having arisen between the parties.
2. The facts of the case as per the petition are as under:
(i) The respondent being Concessionaire of NHAI for the conversion of existing Delhi-Gurgaon section of National Highway-8 from 14.3 KM to 42.0 KM, vide its letter dated 1st August, 2010, offered the petitioner a contract for the supply of labours, supervisors etc., which was duly accepted by the petitioner. By the letter dated 1st February, 2009, the respondent again offered the petitioner similar Contract for one year expiring on 31st January, 2010. The said Contract was also accepted by the petitioner.
(ii) By letter dated 29th January, 2010, the Contract of the respondent was renewed for a further period of one year from 1st February, 2010 to 31st January, 2011.
(iii) By letter dated 31st January, 2011, the respondent once again offered for the renewal of the contract for a further period of one year w.e.f. 1st February, 2011 to 31st January, 2012 on the terms and conditions as contained in the original Agreement dated 1st February, 2008.
(iv) The said contract of the petitioner was renewed by the respondent from time to time and it was last renewed by the respondent, vide its letter dated 16th October, 2013 for a period from 1st May, 2013 to 30th April, 2014.
(v) The petitioner had raised invoices for the services provided by it to the respondent in the month of February, 2014 in terms of the contract between the parties.
(vi) The petitioner submits that despite of the repeated requests and reminders, the respondent had failed to pay a sum of Rs.1,07,84,914/- due and outstanding against it up to July, 2014.
(vii) Thereafter, the petitioner issued a legal notice dated 28th July, 2014 for invoking the arbitration clause.
(viii) By letter dated 26th August, 2014 the respondent had demanded certain documents from the petitioner, which were duly supplied by the petitioner. However, till date, the respondent has not paid the amount; rather it has been raising false and frivolous disputes and contentions. Thus, the present petition has been filed by the petitioner in January, 2016.
3. Reply on behalf of the respondent has been filed.
4. The respondent admits that it had entered into an Agreement with the petitioner vide contract dated 1st February, 2008 by which the petitioner was to provide manpower on the Delhi-Gurgaon expressway. This contract was valid for a period of one year only and expired on 31st January, 2009 with the efflux of time.
5. It is submitted by the respondent that the Agreement was extended vide a fresh contract executed on 1st February, 2009 with entirely different terms and conditions, particularly with regard to the clause pertaining to the settlement of disputes. This contract was valid from 1st February, 2009 to 31st January, 2010 and it also expired with the efflux of time. The dispute resolution mechanism of this contract provided that in the event of there being any dispute arising out of the contract, it would first be referred to VP(HR) of the respondent-Company for the settlement and if the dispute is not settled, the matter would be referred to arbitration and in that case the Arbitrator would be appointed by the respondent-Company.
6. Thereafter, a fresh contract valid for one year from 1st February, 2010 to 31st January, 2011, with the same dispute resolution clause as in the contract dated 1st February, 2009, was executed on 29th January, 2010. This contract also expired with the efflux of time. Thereafter, the contract was extended for one year from 1st February, 2011 to 31st January, 2012 by letter dated 31st January, 2011.
7. It is submitted by the respondent that the main plea of the petitioner is that by letter dated 31st January, 2011, the respondent had extended the con