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IN THE HIGH COURT OF DELHI AT NEW DELHI
NAVIN CHAWLA, J.
ABB India Limited - Petitioner
Versus
The Indure Private Limited - Respondent
ARB.P. 583 of 2018
Decided On : 22-10-2018
Arbitration - Appointment of Arbitrator - Arbitration and Conciliation Act, 1996, Section 11 - Clause 19, Clause 20, Clause 46, Clause 47 of General Terms and Conditions
Fact of the Case:
The petitioner filed a petition seeking appointment of an Arbitrator for disputes arising from two Letters of Award related to electrical system contracts. The respondent objected to the petition on procedural grounds and limitation.
Finding of the Court:
The court found no merit in the respondent's objections, as the respondent had suggested an Arbitrator and failed to file a reply. The court appointed a Sole Arbitrator for adjudicating the disputes and directed the arbitration to be conducted under the aegis of the Delhi International Arbitration Centre.
Issues: Procedural objections raised by the respondent, including non-compliance with Clause 46 and Clause 47 of the General Terms and Conditions, and the limitation of the petitioner's claim.
Ratio Decidendi: The court held that the respondent's objections were not valid, as the respondent had suggested an Arbitrator and failed to file a reply. The court also noted that the limitation of the petitioner's claim should be considered by the Arbitral Tribunal, not as a ground for refusing the appointment of an Arbitrator.
Final Decision: The court allowed the petition and appointed a Sole Arbitrator for adjudicating the disputes, directing the arbitration to be conducted under the aegis of the Delhi International Arbitration Centre.
NAVIN CHAWLA, J.
1. This petition under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act’) has been filed by the petitioner seeking appointment of an Arbitrator for adjudicating the disputes that have arisen between the parties in relation to the Letter of Award for Design & Engineering, Manufacture, Inspection, Supply, Transportation of the entire material of Electrical System for RRVUN-Suratgarh on FOR Site basis and in relation to Letter of Award for Receipt/Unloading at site, Movement within site to its location, Complete Fabrication, Erection, Testing & Commissioning including painting and Performance Guarantee Test of the complete Electrical System Package for RRVUN-Suratgarh, both dated 01.03.2007.
2. The said Letters of Award contain Arbitration Agreements in form of Clause 19 of the first Letter of Award and Clause 20 of the second Letter of Award, which are in identical terms and are reproduced hereinunder:-
“19.0 SETTLEMENT OF DISPUTES
This will be settled as per Clause No. 46 & 47 of General Terms and Conditions for supply
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20.0 SETTLEMENT OF DISPUTES
This will be settled as per Clause No.46 & 47 of General Terms and Conditions for ETC.”
3. Clause 46 and Clause 47 of the General Terms and Conditions referred to in the above clauses are reproduced hereinunder:-
“46.00 SETTLEMENT OF DISPUTES
46.1 Any disputes or differences arising out of or in connection with the contract shall, to the extent possible, be settled amicably between the parties.
46.2 All unsettled disputes or differences arising out of or in connection with the contract shall be decided by, the Engineer whose decision shall be final and binding on the parties.
xxxx
46.3 Prior to the initiation of any/or arbitration proceedings permitted by this contract to resolve disputes between them, in the event a dispute arises between the Purchaser and the contractor regarding the application or Interpretation of this contract (a "Dispute"), the Purchaser's Project Incharge and the contractor's representative shall use their best efforts in good faith to reach a reasonable and equitable resolution of the matter. If the Purchaser's Project Incharge and the contractor's representative are unable to resolve the matter within 30 days, either party by written notice may refer the matter for resolution by good faith negotiation between their respective senior officers with decision making power and who shall not have had substantive involvement in the matters involved in the dispute, unless the parties otherwise agree.
47.00 ARBITRATION
Where any dispute is not resolved as provided for in the clause 46 then the following provisions shall apply :
(a) The dispute shall be referred to arbitration at the request of either party upon written notice to that effect to the other party (a "Notice of Reference") in accordance with the Arbitration Rules of Indian Arbitration and Conciliation Act, 1996 in force at the date of the agreement. Where the rules do not deal with any issue arising in connection with the conduct and/or procedure of the arbitration such issue shall be resolved in accordance with the law of the place in which the arbitration is held and GTC clause 48 shall be construed accordingly.
(b) Performance of the contract shall continue during any arbitration proceedings pursuant to above clause unless the Purchaser shall order the suspension thereof pursuant to GTC clause 44.
(c) Upon every or any such reference, the cost of and incidental to the reference and award respectively shall be on the direction of the Sole Arbitrator so appointed who may determine the amount thereof or direct the same as between party & parties by whom and in what manner the same is to be borne and paid.
(d) The place of arbitration shall be Delhi and the language of the arbitration shall be English.
(e) The parties agree that any arbitration award shall be final and binding upon the parties (to the fullest extent permitted by applicable law) and the
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