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IN THE HIGH COURT OF DELHI AT NEW DELHI
Suresh Kumar Kait, J.
Goel Construction Co - Appellant
Versus
Delhi Metro Rail Corporation Ltd - Respondent
Arbitration Petition No. 1167 of 2021
Decided On : 14-12-2021
Arbitration and Conciliation Act, 1996 - Appointment of Sole Arbitrator - Dispute between Parties
Fact of the Case:
The petitioner, a civil works company, sought the appointment of a Sole Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 to adjudicate disputes with the respondent, a company engaged in the Mass Rapid Transport System business. The disputes arose from the respondent's alleged failure to provide hindrance-free site and non-performance of contractual obligations, leading to termination of the work awarded to the petitioner.
Finding of the Court:
The court allowed the petition and appointed a sole Arbitrator to adjudicate the dispute between the parties. The court also directed the Arbitrator to ensure compliance with Section 12 of the Arbitration and Conciliation Act, 1996 before commencing the arbitration.
Issues: The issues revolved around the respondent's alleged failure to fulfill contractual obligations, leading to disputes and termination of the awarded work, and the petitioner's invocation of arbitration in accordance with the General Conditions of Contract.
Ratio Decidendi: The court's decision was influenced by the petitioner's invocation of arbitration in accordance with the General Conditions of Contract and the respondent's failure to forward suggestions of names of Arbitrators, leading to the court's appointment of a sole Arbitrator to adjudicate the disputes.
Final Decision: The present petition was allowed, and a sole Arbitrator was appointed to adjudicate the dispute between the parties. The fee of the Arbitrator shall be governed by the Fourth Schedule of the Arbitration and Conciliation Act, 1996.
JUDGMENT
Suresh Kumar Kait, J. - The present petition has been filed under Section 11 (6) of the Arbitration and Conciliation Act, 1996 seeking appointment of Sole Arbitrator to adjudicate the disputes with respondent.
2. Petitioner- company claims to be engaged in the business of execution of civil works. Respondent is a company registered under Companies Act, 1956 and is engaged in the business of Mass Rapid Transport System.
3. According to petitioner, respondent floated a Tender bearing No. CCM-18/2015: construction of blowdown plant and shifting of Platform at Sarita Vihar Train Depot and the said work was awarded vide Letter of ARB.P. 1167/2021 Award ("LoA" in short) dated 12.01.2016 for total value of Rs.46,71,462.87/- inclusive of all taxes, duties & levies. The subject work was stipulated to be completed within 180 days, commencing from 7 days after issuance of the LoA, i.e. on/before 18.07.2016. The stipulated date for commencement of work was 18.01.2016 on which, the respondent was to provide hindrance free site, plan and data of the blowdown plant. However, according to petitioner, respondent failed to do so though petitioner’s company had mobilized its workforce and equipment for timely completion of the works awarded immediately after the issuance of the LOA. After repeated requests, respondent partly provided site to the petitioner’s company in the month of February, 2016 for execution of only 13 units out of 23 units of the quantity given in BOQ as NDSR item number 04 of the LOA, i.e. dismantling of an existing platform, transportation and erection of the same platform at new location, including minor repair (welding and cutting, etc.) as per requirement and complete as per the direction of the Engineer-in-Charge and other relating items to that NDSR.
4. At the hearing, learned counsel for petitioner has submitted that the stipulated date for completion of above mentioned work was 18.07.2016, which expired due to the non-performance of the obligations on the part of ARB.P. 1167/2021 respondent. The actual date of commencement was 26.12.2016 which is approximately 6 months after the expiration of stipulated date of completion. Furthermore, petitioner requested the respondent vide its letters dated 17.05.2017 and 03.06.2017 to increase petitioner’s contract price @ 20% due to the increase in the price of material and labour and GST, which is applicable @ 18% instead of VAT@ 4%, which would result in direct loss of 18% to petitioner or they could opt to settle petitioner’s final claims, refund performance guarantee and security deposit, owing to the non-performance of contract on part of the respondent. On 20.07.2017, respondent terminated the work awarded to petitioner- company. Thereafter, disputes arose between the parties.
5. It is further submitted that a legal notice dated 24.11.2020 was served upon respondent to invoke arbitration in terms of Clause 17 of General Conditions of Contract. However, respondent failed to forward suggestion of names of Arbitrators. Hence, the present petition has been filed.
6. Learned counsel for respondent has appeared and submitted that though the averments made in the present petition are disputed, however, there is no objection if the present petition is allowed and sole Arbitrator is appointed to adjudicate the disputes between the parties.
7. In view of the above, the present petition is allowed. Accordingly, Mr. R.S.Rathi, Advocate (Mobile: 9810868733) is appointed sole Arbitrator to adjudicate the dispute between the parties.
8. The fee of the learned Arbitrator shall be governed by the Fourth Schedule of the Arbitration and Conciliation Act, 1996.
9. The learned Arbitrator shall ensure compliance of Section 12 of Arbitration and Conciliation Act, 1996 before commencing the arbitration.
10. The present petition stands disposed of accordingly.
11. A copy of this order be sent to the learned Arbitrator for information.
The court ruled that a Sole Arbitrator is to be appointed to resolve disputes under the contract due to the respondent's failure to meet contractual obligations.
The court's decision emphasized the appointment of a sole Arbitrator to adjudicate disputes under the Arbitration and Conciliation Act, 1996.
The court applied the provisions of the Arbitration and Conciliation Act, 1996 to appoint a sole arbitrator and ensure compliance before commencing the arbitration.
No single party can be permitted to unilaterally appoint the Arbitrator, as it would defeat the purpose of unbiased adjudication of dispute between parties.
The court has the authority to appoint a sole Arbitrator in accordance with the Arbitration Clause forming a part of the Contract.
The central legal point established in the judgment is the court's authority to appoint an arbitrator to resolve disputed claims between parties in accordance with Section 11(6) of the Arbitration an....
The court affirmed that when parties acknowledge disputes in a contractual agreement, an arbitrator must be appointed to resolve these disputes under the Arbitration and Conciliation Act, 1996.
A unilateral appointment of an arbitrator violates principles of unbiased dispute resolution. An arbitrator must be appointed consensually or by the court.
Appointment of a sole arbitrator must comply with the provisions of the Arbitration and Conciliation Act, 1996 and should not be in violation of relevant legal precedents.
Disputes concerning contract completion and payment arise, necessitating arbitration as per the Arbitration and Conciliation Act, 1996.
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