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2021 Supreme(Del) 639

IN THE HIGH COURT OF DELHI AT NEW DELHI
SURESH KUMAR KAIT, J.
CG Tollway Limited – Appellant
Versus
National Highway Authority Of India & Anr. – Respondents
ARB.P. 888, 889, 892 of 2021
Decided on : 28-10-2021

Advocate Appeared:
For the Appellant :Mr. Vikram Nankani, Mr. Ashish Batra, Mr. Sarthak Sachdev & Ms. Terresa R. Daulat, Advocates
For the Respondent:Mr. Sudhir Gupta, Senior Advocate with Mr. Amarjit Singh Bedi, Mr. Umang Gupta & Ms. Shweta Chauhan, Advocates

Point of Law: Under Section 11(6) of the Act seeking appointment of sole Arbitrator are not maintainable and are hereby dismissed, while directing the parties to nominate one Arbitrator each from the panel of SAROD having 89 Arbitrators (as per Document-5) and the two so appointed shall appoint the third Arbitrator.

Headnote:

Arbitration And Conciliation Act, 1966 - Section 11(6) - Companies Act, 1956 - Societies Registration Act - National Highways Authority of India Act, 1988 - National Highways Fee (Determination of Rates and Collection) Rules, 2008 - Rule 11 - Concession Agreement - Infrastructure developers - Claims for reimbursement of losses/costs - Collection of toll fees - Petitioners to undertake the entire cost of projects and in addition, to pay fixed premium of Rs.228.60 crores, Rs.186.30 crores and Rs.163.80 crores respectively to the respondent each year, with annual increase @3% p.a. till the subsistence of the agreement. In lieu of the above, petitioner was entitled to collect and retain toll, from which petitioner could satisfy the project costs, reasonable returns etc. The Appointed Date/Commercial Operation Date (COD) under the Concession Agreements in respect of the project of the petitioner.

Finding of the Court :

Jurisdiction of this Court under Section 11(6) of the Act can be invoked only once the procedure for appointment of the Presiding Arbitrator provided in the contract has been exhausted and has failed - Provisions of Section 11(6) of the Act and ratio of law laid down by the Hon’ble Supreme Court in respect thereof to the case in hand, this Court finds that sub-clause (i) of Clause 44.3.1 of the Contract Agreement set forth the arbitration clause and it specifically enumerates that the disputes shall be dealt with in terms of Rules of SAROD and provisions of Arbitration and Conciliation Act, 1996 - Parties have yet not nominated any of the Arbitrator, who shall further appoint the Presiding Officer to complete the arbitral tribunal.

Result: Petitions disposed of.

JUDGMENT :

1. Petitioners in the above captioned three petitions are companies incorporated under the provisions of Companies Act, 1956 and are subsidiary of M/s IRB Infrastructure Developers Limited, who claims to be the largest infrastructure developers in India with vast experience in construction, operation & maintenance of highway projects. Respondent is a statutory body constituted under the National Highways Authority of India Act, 1988 (NHAI) and respondent No. 2 has been incorporated under Societies Registration Act, 1860 formed by NHAI along with NHBF for settlement of disputes through arbitration.

2. Since similar relief has been sought in these petitions, therefore, with the consent of learned counsel for the parties, these petitions were heard together and are being disposed of by this common judgment.

3. In the above captioned first petition [ARB.P.888/2021], the petitioner-Company was awarded a project of six laning of Kishangarh Udaipur Ahmedabad Section from Km. 90.000 (near Gulabpura) to Km. 214.870 (end of Chittorgarh bypass) of NH-79 in the State of Rajasthan package - 2 under NHDP Phase-Von BOT (Toll) for which a Concession Agreement dated 09.12.2016 was executed between petitioner and respondent No.1- NHAI.

4. In the above captioned second petition [ARB.P.889/2021], the petitioner-Company was awarded a project of six laning of Kishangarh to Gulabpura section of NH-79A and NH-79 in the State of Rajasthan (Length 90.000km) on DBFOT (Toll) under NHDP Phase-V Package-1, for which a Concession Agreement dated 22.02.2017 was executed between the petitioner and respondent- NHAI.

5. In the above captioned third petition [ARB.P.892/2021], the petitioner- Company was awarded the Project of six laning from Km 287.400 to Km 401.200 Section of NH-8 in the state of Rajasthan & Gujarat (Approx length 113.800 Km.) on DBFOT (Toll) under NHDP Phase-V (Package-V) i.e. on “Design Build Finance Operate Transfer Basis” (“the said Project”), for which a Concession Agreement dated 09.12.2016 was executed between petitioner and respondent, National Highways Authority of India (NHAI).

6. The Concession Agreements in question required the petitioners to undertake the entire cost of projects and in addition, to pay fixed premium of Rs.228.60 crores, Rs.186.30 crores and Rs.163.80 crores respectively to the respondent each year, with annual increase @3% p.a. till the subsistence of the agreement. In lieu of the above, petitioner was entitled to collect and retain toll, from which petitioner could satisfy the project costs, reasonable returns etc. The Appointed Date/Commercial Operation Date (COD) under the Concession Agreements in respect of the project of the petitioner were 04.11.2017, 21.02.2018 and 03.09.2017 respectively. Petitioners were, therefore, entitled to recover toll fee from the road users in accordance with the law for use of the subject section of National Highways as per “National Highways Fee (Determination of Rates and Collection) Rules, 2008” and the right of way in respect of concerned land was to be provided by respondent –NHAI to petitioner within 120 days of respective COD.

7. According to petitioners, the originally scheduled “Completion Dates” on 910th day from COD was extended by NHAI to 31.01.2020, 09.09.2021 and 30.11.2020 respectively. However, in the wake of various instructions issued from time to time due to Covid pandemic, construing the same as a Force Majeure Event, the completion date was further extended till 30.07.2021 (in Arb.P. 888/2021); 31.05.2021 (in Arb.P.892/2021) and 09.09.2021 (ARB.P. 889/2021) respectively. Petitioners notified the occurrence of Force Majeure under Political Event in terms of Clause 34.5 in Article 34 of the MCA on account of the State-wide complete lockdown w.e.f. 22.03.2020 and submitted their claims for reimbursement of losses/costs directly attributable to such political force majeure event from 22.03.2020 to 03.05.2020 in all these petitions and consequential extension o

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