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2020 Supreme(Del) 795

IN THE HIGH COURT OF DELHI AT NEW DELHI
Jyoti Singh, J.
JMC Projects (india) Limited - Appellant
Versus
South Delhi Municipal Corporation - Respondent
Arbitration Petition No. 632 of 2017
Decided On : 13-08-2020

Advocates Appeared:
Sachin Datta, Advocate, Prity Sharma, Advocate, Sunil Goel, Advocate

The main legal point established in the judgment is that Clause 46 of the SCC constituted an Arbitration Agreement, and the DRC proceedings did not have the trappings of Arbitral proceedings and could not result in an Arbitral Award as provided under Section 31 of the Act.

Headnote:

Arbitration Clause - Dispute Resolution - Arbitration and Conciliation Act, 1996, Section 11(6)

Fact of the Case:

The Petitioner filed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 to constitute an Arbitral Tribunal to adjudicate disputes arising from a contract. The Petitioner contended that Clause 46 of the Special Conditions of Contract (SCC) constituted an Arbitration Clause, while the Respondent argued that there was no Arbitration Agreement between the parties.

Finding of the Court:

The Court found that Clause 46 of the SCC constituted an Arbitration Agreement between the parties, meeting all essential requirements of an Arbitration Agreement. The Court also held that the DRC proceedings did not have the trappings of Arbitral proceedings and could not result in an Arbitral Award as provided under Section 31 of the Act. Therefore, the Court appointed a Sole Arbitrator to adjudicate the disputes between the parties.

Issues: The main issue was whether Clause 46 of the SCC constituted an Arbitration Clause. Additionally, the Court had to determine the nature of the DRC proceedings and whether they could result in an Arbitral Award.

Ratio Decidendi: The Court held that Clause 46 of the SCC constituted an Arbitration Agreement, meeting all essential requirements of an Arbitration Agreement. The Court also found that the DRC proceedings did not have the trappings of Arbitral proceedings and could not result in an Arbitral Award as provided under Section 31 of the Act.

Final Decision: The Court appointed Dr. Justice A.K. Sikri as a Sole Arbitrator to adjudicate the disputes between the parties.

JUDGMENT

Jyoti Singh, J. - Present Petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ''Act'') to constitute an Arbitral Tribunal to adjudicate the disputes between the parties.

2. The genesis of the Petition is in a Contract entered into between the Petitioner and the Respondent on 24.09.2012 for carrying out the work of covering of Nallah from Pushp Vihar, Press Enclave Road, passing through Sheikh Sarai - Chirag Delhi - Panchsheel Enclave - GK-1 - Andrews Ganj upto Ring Road behind Police Station, Defence Colony (except the stretch of Nallah in GK-1 in a length of 1000 mtr.) under JNNURM for providing Parking/Road cum Parking under the jurisdiction of Municipal Corporation of Delhi.

3. The effective date of start of the Contract was 08.09.2012 and the work was to be completed within 18 months i.e. upto 10.03.2014. Disputes having arisen between the parties regarding the completion of the work, the Petitioner requested the Respondent vide letter dated 06.03.2016 to consider the various claims raised by it vide letter dated 15.01.2016 and refer for adjudication by the Dispute Resolution Committee (hereinafter referred to as ''DRC''). The request was based on Clause 46 of Special Conditions of Contract (SCC) which provided for settlement of disputes by the DRC comprising of representative of the Petitioner and the Chief Engineer, MCD.

4. Prior thereto, the Petitioner had requested the Respondent vide letter dated 16.01.2016 to enter into a Supplementary Agreement for incorporating a separate Arbitration Clause.

5. The DRC was constituted by the Respondent vide letter dated 04.05.2016 and the Engineer-in-Charge nominated the Chief Engineer (Central) as Chairman of the DRC. Petitioner was asked to nominate its representative and vide letter dated 30.05.2016 Petitioner nominated its representative. Proceedings of the DRC were held on several dates to adjudicate the claims raised by the Petitioner and culminated into a decision dated 29.05.2017, whereby DRC directed the Respondent to pay amounts of Rs. 69,13,247/- and Rs. 11,15,841/-, along with the interest @ 7.5% p.a. w.e.f. 24.09.2015 to the Petitioner. The order was signed only by the Chief Engineer as the Petitioner''s representative refused to sign the same.

6. Soon thereafter, Petitioner sent a notice dated 03.06.2017 to the Respondent invoking the Arbitration Agreement and sought appointment of an Arbitrator. Alleged failure on the part of the Respondent to appoint an Arbitrator led to filing of the present Petition under Section 11(6) of the Act and the Petitioner now seeks appointment of an Arbitrator on the premise that Clause 46 of SCC is an Arbitration Clause between the Parties.

Case of the Petitioner

7. Learned Senior Counsel for the Petitioner, Mr. Sachin Datta, contends that Clause 46 of SCC is an Arbitration Clause and the intention of the parties has always been to resolve their disputes through Arbitration. The essential features of an Arbitration Clause are that it is an Agreement in writing between the parties, all questions and disputes arising out of or relating to the Agreement are within the ambit of the Clause and the decision pursuant to such Proceedings is acceptable and binding on both parties.

8. Laying emphasis on the language of Clause 46 of SCC, it is argued that an identical Clause, with only a minor difference of the words ''one'' and ''each'', which are missing in the Clause 46 herein, has been held to be an Arbitration Clause by a Co-ordinate Bench in the case of AMR India Ltd. v. South Delhi Municipal Corporation,2018 SCCOnLineDel 8243 . SDMC was a Respondent in the said case and the judgement has been accepted.

9. Further submission of the Petitioner is that minor difference of ''each'' between Clause 46 and Clause 44, which was the subject matter of adjudication in AMR India (supra), makes no material difference. Emphasis of the Respondent on the absence of the word ''eac

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