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IN THE HIGH COURT OF DELHI AT NEW DELHI
Sanjeev Narula, J.
Manisha Kulkarni Proprietor Of M/s Mani Engineers Pune - Appellant
Versus
NCC Limited - Respondent
Arbitration Petition No. 632 of 2020, Miscellaneous Application No. 10850 of 2020, 1517 of 2021
Decided On : 15-09-2021
Arbitration - Appointment of Sole Arbitrator - Arbitration and Conciliation Act, 1996, Section 11(6)
Fact of the Case:
The Petitioner seeks appointment of a Sole Arbitrator for adjudication of disputes arising from three Letter of Intents (LOIs) and Work Orders (W.O.) issued by the Respondent for a project at Kidwai Nagar, New Delhi. The Respondent objects to the appointment of an arbitrator, claiming that the disputes under the LOIs are time-barred and cannot be clubbed together.
Finding of the Court:
The Court rejects the Respondent's objection on limitation, stating that it cannot conclude the claims are time-barred and that the issue of limitation is a mix question of fact and law to be decided by the Arbitral Tribunal. The Court finds that the LOIs are not inter-connected and that each LOI must be examined independently for the existence of an arbitration agreement. It appoints a Common Sole Arbitrator for disputes under two LOIs and W.O., but not for the third LOI, as there is no arbitration agreement for it.
Issues: The issues include the jurisdiction of the Court to appoint an arbitrator, the inter-connectedness of the LOIs, and the objection of limitation raised by the Respondent.
Ratio Decidendi: The Court's decision is based on the principles that the claims are not ex facie time-barred, the LOIs are not inter-connected, and the intention of the parties regarding arbitration agreement must be demonstrated. The Court also emphasizes that the rights and contentions on merits are left open for both parties to raise before the Arbitrator.
Final Decision: The Court allows the petition to the extent of appointing a Common Sole Arbitrator for disputes under two LOIs and W.O., and dismisses the objection of limitation raised by the Respondent. The parties are directed to appear before the Arbitrator, and the Court has not examined any of the claims of the parties, leaving all rights and contentions on merits open for both parties to raise before the Arbitrator.
JUDGMENT
Sanjeev Narula, J. - The present petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996, seeking appointment of a Sole Arbitrator for adjudication of disputes between the parties.
2. The case of the Petitioner is that the Respondent on behalf of its principal employer NBCC, floated a tender in respect of an NBCC project at Kidwai Nagar, New Delhi. On acceptance of Petitioners bid, they were appointed as the contractor for the afore-noted project on a back-to-back basis with respect to work stipulated under three identically worded Letter of Intent [hereinafter referred to as the LOI], details whereof are as under:
(i) NCCL/KIDWAI-II/LOI/15-16/020 dated 15th October 2015, for "Plumbing works of Social Infra complex" for a value of Rs 3.22 crore. [hereinafter referred to as 1st LOI]
(ii) NCCL/KIDWAI-II/LOI.15-16/011 dated 08th September 2015, for "Firefighting works of Tower VI and VII" for a value of Rs 2.90 crore. [hereinafter referred to as 2nd LOI]
(iii) NCCL/KIDWAI-II/LOI. 16-17/001 dated 14th April 2016, for "Plumbing works for Tower VI and VII (166 flats)" for a value of Rs. 8.51 crore. [hereinafter referred to as 3rd LOI]
3. Subsequently, Respondent issued two Work Orders in respect of the 1st and 2nd LOI being W.O. No. NCCL/KIDWAI-II/HO/W.O./15-16/021 in respect of the 1st LOI [hereinafter referred to as 1st W.O.], and W.O. No. NCCL/KIDWAI-II/ W.O./16- 17/001 in respect of the 2nd LOI [hereinafter referred to as 2nd W.O.]. No Work Order was issued for the 3rd LOI, however, the Petitioner claims that upon written instructions from the Respondent, it has carried out the plumbing works under the said LOI for the Kidwai Nagar project. According to the Petitioner, despite having completed the work, there continues to be an outstanding amount, payable by the Respondent, which has been disputed by them on allegedly frivolous grounds.
4. The 1st and 2nd W.O. contained an arbitration clause, which reads as follows:
"ARBITRATION"
"to prevent disputes and litigation, it shall be accepted as an inseparable part of the Work Order that in the matter regarding workmanship, interpretation of contract, mode or procedure for carrying out the work, the decision of NCC Limited shall be binding on the contractor and if any technical/contractual dispute which may arise touching the contract the matter shall be referred to Sr. Technical Executive of NCC Limited of the rank of Regional Head or above. If the disputes arising are not resolved at the rank of the Regional Head then the same shall be referred to the Director of NCC Limited whose decision in the matter shall be final and binding.
The contractor shall not raise any objection that the sole arbitrator is or was an employee of NCC Limited and the contractor hereby waives any such right. However, the sole arbitrator must not have been looking after the execution of the work under this contract.
Notwithstanding anything contained in any other Agreement, contract or other document entered into or executed whether prior to or subsequent to this ORDER, the courts in the city of Delhi shall alone has jurisdiction to try any dispute or difference between the parties to this ORDER with regard to the interpretation of the terms of ORDER or any other matter relating to or arising out of this Order and this shall be treated as a separate contract" [sic]
5. In these circumstances, as the Petitioners outstanding dues were not discharged, they invoked arbitration in respect of the 1st and 2nd W.O. on 10th January 2020. The Respondent failed to agree upon the appointment of an arbitrator, and accordingly, the present petition has been filed.
RESPONDENTS CONTENTIONS
6. Ms. Priya Kumar, counsel for the Respondent, does not dispute the existence of the arbitration agreement in respect of the 1st and 2nd W.O. mentioned above, however, she objects to the appointment of the arbitrator, on the following grounds:
6.1. The amount claimed by the Petitioner which forms the subject ma
The Court's decision emphasizes the need to examine each agreement independently for the existence of an arbitration agreement, and the importance of demonstrating the intention of the parties regard....
A single arbitration application for multiple sub-contract agreements is not maintainable when the contracts are separate and distinct, and do not arise from a single commercial project.
The main legal point established in the judgment is that while a single petition under Section 11 (6) of the Arbitration and Conciliation Act, 1996 may be maintainable when the work of the parties is....
The Court's limited jurisdiction under Section 11 of the Act does not allow for a detailed consideration of the disputes, which is to be determined by the arbitrator.
The court emphasized the importance of adopting a simple, unambiguous, and uncomplicated procedure for dispute resolution through arbitration in respect of inter-related contracts with different part....
The court affirmed that distinct disputes can be arbitrated even after a prior award, emphasizing the principle of competence-competence which allows the Tribunal to resolve its jurisdictional issues....
Disputes concerning alleged payments are referable to arbitration despite claims of prior resolution efforts, where the existence of disputes was upheld.
The existence of an arbitration agreement under Section 11 requires clear indication of a binding contract, which was absent in this case; the Letter of Intent was merely a precursor to an actual con....
The consent to arbitrate can waive mandatory pre-arbitration formalities, allowing disputes from separate contracts to be arbitrated as a composite matter.
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