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IN THE HIGH COURT OF DELHI AT NEW DELHI
Vibhu Bakhru, J.
Rajveer Singh - Appellant
Versus
Government Of Nct Of Delhi Public Works Department Civil Building Maintenance Division - Respondent
Arbitration Petition No. 931 of 2021
Decided On : 29-11-2021
Arbitration - Dispute Resolution - Arbitration and Conciliation Act, 1996 - Section 11 - Clause 25 of GCC - Summary of Acts and Sections: A&C Act, 1996, Section 11; General Conditions of Contract (GCC) for Central P.W.D Works, Clause 25 - The court considered the existence of an arbitration agreement, the limitation period for invoking arbitration, and the impact of the Covid-19 pandemic on the limitation period. The court found that the invocation of the dispute resolution clause was not barred by limitation and allowed the petition, referring the parties to Delhi International Arbitration Centre (DIAC) for arbitration.
Fact of the Case:
The petitioner filed a petition under Section 11 of the Arbitration and Conciliation Act, 1996, seeking the appointment of an arbitrator to adjudicate disputes arising from a construction contract. The respondent opposed the petition on the ground that the claims were barred by limitation.
Finding of the Court:
The court found that the invocation of the dispute resolution clause was not barred by limitation and allowed the petition. The parties were referred to Delhi International Arbitration Centre (DIAC) for arbitration.
Issues: Existence of an arbitration agreement, limitation period for invoking arbitration, impact of Covid-19 pandemic on limitation period.
Ratio Decidendi: The court held that the invocation of the dispute resolution clause was not barred by limitation, considering the impact of the Covid-19 pandemic on the limitation period.
Final Decision: The petition was allowed, and the parties were referred to Delhi International Arbitration Centre (DIAC) for arbitration.
JUDGMENT
Vibhu Bakhru, J. - The petitioner has filed the present petition under Section 11 of the Arbitration and Conciliation Act, 1996 (hereafter the A&C Act) praying that an arbitrator be appointed to adjudicate the disputes that have arisen between the parties.
2. The respondent had issued a notice inviting eligible contractors for submitting their bid for constructing eight rooms in double storied class rooms, one Laboratory for science, and a staircase at Govt. Girls Secondary School (GGSS) No.2 Sector - V, Dr. Ambedkar Nagar, New Delhi (School ID: - 923050).
3. The petitioner had successfully bid for the said contract and its offer was accepted on 18.05.2013. The scheduled date of commencement of the work was stipulated as 01.08.2013 and the works were to be completed on or before 31.01.2014.
4. There were certain delays in completion of the works, which were finally completed on 10.11.2014. Thereafter, on 29.12.2020, the petitioner submitted its Final Bill. The petitioner states that part payment was made against the Final Bill on 06.06.2017. The respondent disputes the same; according to the respondent, the Final Bill was paid on 06.04.2017.
5. On 24.06.2020, the petitioner addressed a letter to the concerned Executive Engineer, PWD raising certain claims for outstanding payments. These claims were rejected by the concerned Executive Engineer on 06.07.2020. Thereafter, on 18.08.2020, the petitioner filed its claims with the concerned Superintendent Engineer, PWD along with the letter of the Executive Engineer rejecting the same. The Superintendent Engineer, PWD did not entertain these claims as well. Consequently, the petitioner escalated the matter by referring its claims to Chief Engineer, PWD and requested that a Dispute Resolution Committee (DRC) be constituted to examine the petitioners claims.
6. The petitioner received a letter dated 08.02.2021 from the Chief Engineer informing the petitioner that the DRC had been constituted to resolve the disputes.
7. On 12.02.2021, the petitioner preferred its claim before the DRC. It is stated that the DRC conducted a meeting on 16.03.2021. However, the disputes remain unresolved. The petitioner sought reference of the disputes to arbitration but the respondent has not concurred to do so.
8. In the aforesaid context, the petitioner filed the present petition.
9. The Arbitration Clause as contained in the General Conditions of Contract (GCC) for Central P.W.D Works as modified by GCC 2010 - Correction Slip No. 3, reads as under: -
"Settlement Of Disputes & Arbitration
Except where otherwise provided in the contract, all questions and disputes relating to the meaning of the specifications, design, drawings and instructions here-in before mentioned and as to the quality of workmanship or materials used on the work or as to any other question, claim, right, matter or things whatsoever in any way arising out of or relating to the contract, designs, drawings, specifications, estimates, instructions, orders or these conditions or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of the work or after the cancellation, termination, completion or abandonment thereof shall be dealt with as mentioned hereinafter:
(i) If the contractor considers any work demanded of him to be outside the requirements of the contract, or disputes any drawings, record or decision given in writing by the Engineer-in-Charge on any matter in connection with or arising out of the contract or carrying out of the work, to be unacceptable, he shall promptly within 15 days request the Superintending Engineer in writing for written instructions or decision. Thereupon, the Superintending Engineer shall give his written instructions or decision within a period of one month from the receipt of the contractors letters.
If the Superintending Engineer fails to give his instructions or decision in writing within the aforesaid period or if the contractor is dissatisfie
The impact of the Covid-19 pandemic on the limitation period for invoking arbitration under the Arbitration and Conciliation Act, 1996.
The court ruled that claims regarding limitation and the validity of invoking arbitration must be determined by the Arbitral Tribunal, reaffirming the applicability of Article 137 of the Limitation A....
Contractual provisions cannot extinguish rights to invoke arbitration beyond lawful limitations set by statute, upholding that timelines for claims start from when notice to arbitrate is issued.
Arbitration - Appointment of Arbitrator - Court is not required to examine any other contentious issues regarding the disputes between the parties at the stage of referring the parties to arbitration....
An arbitration agreement remains valid and enforceable despite procedural limitations on arbitrator appointment, ensuring disputes are addressed effectively.
The Court emphasized the principle of 'when in doubt, do refer' and left the issues of limitation and compliance with the procedure for DRC under Clause 25 for consideration by the arbitrator.
The pre-arbitration procedures under the arbitration clause are not always mandatory, and the court may refer disputes to arbitration if the requisites of arbitrability and notice under the Arbitrati....
The main legal principle established is that the Court should not reject an application for appointment of an arbitrator at the threshold unless the claim is manifestly, ex-facie and hopelessly time-....
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