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2017 Supreme(Del) 875
IN THE HIGH COURT OF DELHI AT NEW DELHI
S.MURALIDHAR, J.
SALMA DAM JOINT VENTURE THROUGH SSJV PROJECTS PVT LTD - Petitioner
Versus
WAPCOS LIMITED - Respondent
ARB.P. 810/2016
Decided On : 15-03-2017
For the Petitioner:Mr. Sachin Datta, Senior Advocate with Ms. Pritya Sharma, Advocate.
For the Respondent:Mr. Sanjay Jain, Additional Solicitor General with Mr. Milanka Chaudhary, Mr. Kartik Rai and Ms. Naina Dubey, Advocates.
The court emphasized that the arbitration agreement survives contract amendments and inter se disputes between joint venture partners, and the validity of claims for arbitration can be examined in the arbitration proceedings.
Headnote:
Arbitration - Appointment of Arbitrator - Arbitration and Conciliation Act, 1996, Section 11(6)
Fact of the Case:
The petitioner sought the appointment of an arbitrator on behalf of the respondent in a dispute arising from a contract agreement for the reconstruction, rehabilitation, and completion of a dam project in Afghanistan. The respondent failed to nominate an arbitrator as required by the contract, leading to the petition.
Finding of the Court:
The court found that the objections raised by the respondent to the appointment of an arbitrator were not tenable. It appointed a former Supreme Court Judge as the arbitrator on behalf of the respondent.
Issues: The issues involved the failure of the respondent to nominate an arbitrator, inter se disputes between joint venture partners, and the validity of the claims for arbitration.
Ratio Decidendi: The court held that the mere existence of inter se disputes between joint venture partners does not extinguish the liability of the respondent in the arbitration of disputes. It also ruled that the arbitration agreement survived the amendment to the contract agreement and that the validity of the claims for arbitration can be examined in the arbitration proceedings.
Final Decision: The court appointed an arbitrator on behalf of the respondent and directed the two arbitrators to appoint a third arbitrator within a specified period.
1. This is a petition under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (‘Act’) filed by the Petitioner, Salma Dam Joint Venture Through SSJV Projects Private Limited (‘SDJV’) seeking the appointment of an arbitrator on behalf of the Respondent, Wapcos Limited, in the dispute between the Petitioner and the Respondent arising out of the contract agreement dated 9th March 2006 entered into between them for “reconstruction, rehabilitation and completion of Salma Dam Project (3 x 14 MW), Afghanistan, Package III: Main Civil & Hydro Mechanical Works. Subsequently, an amendment of agreement was signed to the contract agreement on 9th June 2015.
2. It is stated that the claims preferred by the SDJV was first referred to the Technical Committee (‘TC’) constituted by the Respondent. These were in the form of ‘appeals’ by the SDJV to the said TC. Appeal Nos. 1 to 6 dealt with the following items:
Appeal No. 1
Item 5.1 Payment of balance amount of escalation
Item 5.2 Refund of retention money recovered in excess
Item 5.3 Issue of take over certificates
Item 5.4 Revised rate for high performance concrete (HPC) M 60 Grade.
Appeal No. 2
Item 5.6 Payment towards O&M works – extra capacity D.G. Sets.
Item 5.7 Payment towards interest for the item of additional excavations in manifold area of power tunnel, due to delay in payment.
Item 5.8 Refund of interest recovered by M/s. WAPCOS towards the mobilization advance beyond the original contract period.
Item 5.9 Issue of fill material for upstream right embankment dam as per the revised drawing.
Appeal No. 3
Item 5.10 – Reimbursement of bank guarantee charges towards mobilization advance and security deposit.
Item 5.11 – Payment of interest on excess retention money deducted by M/s. WAPCOS.
Item 5.12 Payment of compensation on account of loss over overheads due to reduced turnover.
Item 5.13 Payment of interest on price escalation amount.
Item 5.14 Reimbursement of cost of underutilized and wasted infrastructure
Item 5.15 Reimbursement of insurance amount for the period beyond the original contract period.
Item 5.16 Reimbursement of infrastructure development charges in respect of Quarry No. 5 (extension of Quarry No. 1).
Appeal No. 4
Item 5.17 – Payment of idling charges of manpower and machinery – Invoice No. 01
Item 5.18 Payment of idling charges of manpower and machinery – Invoice No. 02.
Item 5.19 Payment of idling charges of manpower and machinery – Invoice No. 03.
Item 5.20 Payment of idling charges of manpower and machinery – Invoice No. 04.
Item 5.21 Payment of idling charges of manpower and machinery – Invoice No. 05.
Item 5.22 Payment of idling charges of manpower and machinery – Invoice No. 06.
Item 5.23 Payment of idling charges of manpower and machinery – Invoice No. 07.
Item 5.24 Payment of idling charges of manpower and machinery – Invoice No. 08.
Item 5.25 Payment of idling charges of manpower and machinery – Invoice No. 09.
Item 5.26 Payment of idling charges of manpower and machinery – Invoice No. 10.
Item 5.27 Payment of idling charges of manpower and machinery – Invoice No. 11.
Appeal No. 5
Item No. 5.28 – The issue of making good the loss due to non- utilization of river bed material (Screened RMB)
Item 5.29 – Issue of fill material for upstream right embankment dam as per the revised drawing (previously brought out with reference to issue No. 5.9 in the Second Appeal of SDJV).
Item 5.30 – Payment towards cost of 300 mm pipes, 300 mm values, fittings, etc. installed as per the Drawing No. Wap/afg/slm/cs/c-1039
Item 5.31 – Payment for drilling and grouting works on the right flank hillock (right abutment).
Appeal No. 6
Item 5.32 – Non-payment of running bills, approved extra item payments and escalation payments.
3. It is stated that by its report dated 28th October 2016, the TC accepted only one claim for the payment towards cost of 300 mm pipes, 300 mm valves, fittings etc. for a sum of USD 7374 and all the other claims were rejected. After the receipt of the report of the TC, the Petiti
