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2021 Supreme(Del) 1636

IN THE HIGH COURT OF DELHI AT NEW DELHI
C. Hari Shankar, J.
Mahindra Susten Private Limited - Appellant
Versus
NHPC Limited - Respondent
Arb P No. 217 of 2020; I.A. No. 6503 of 2020, 6502 of 2020; O.M.P. (I) (Comm) No. 162 of 2020
Decided On : 17-02-2021

Advocates appeared:
K.V. Viswanathan, Advocate, Sanjeev Kapoor, Advocate, Prateek Kumar, Advocate, Sneha Janakiraman, Advocate, Apoorv Singhal, Advocate, Smriti Nair, Advocate, Tejas Karia, Advocate, Gauhar Mirza, Advocate, Prakhar Deep, Advocate, Nishant Doshi, Advocate

Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 11(6) and 17 - Reference to arbitration - Petition for appointment of arbitrator and seeking pre-arbitral interim relief granted - Court finds the disputes between parties suitable for arbitration under the Act due to refusal of respondent to honor obligations - Claim regarding performance bank guarantee and contract signing conditions discussed - The necessity for submission of performance security clarified. (Paras 1-2, 42, 70)

Table of Content
1. referring disputes to arbitration. (Para 2 , 4 , 5 , 6)
2. overview of tendering processes. (Para 11 , 12 , 13)
3. challenges against jurisdiction and contract completion. (Para 25 , 26)
4. existence and validity of arbitration agreement. (Para 30 , 32)
5. orders on arbitration and interim relief. (Para 71 , 73 , 74)

JUDGMENT

C. Hari Shankar, J. - This judgment disposes of Arb. P. 217/2020 and OMP (I) (Comm) 162/2020.

2. Arb. P. 217/2020 seeks reference of the disputes, between the petitioner and respondent, to arbitration, under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the 1996 Act"). OMP (I) (Comm) 162/2020 seeks certain pre-arbitral interim reliefs. Mr. Viswanathan, learned Senior Counsel for the petitioner submitted, at the outset, that, if Arb. P. 217/2020 were to be allowed, and the disputes between the petitioner and the respondent referred to arbitration as prayed therein, he would have no objection to OMP (I) (Comm) 162/2020 being also referred for adjudication to the arbitrator, treating it as an application under Section 17 of the 1996 Act. As such, the necessity of adjudicating, on merits, OMP (I) (Comm) 162/2020 would arise only if Arb. P. 217/2020 were not to be allowed.

3. Mr. Tejas Karia, learned counsel for the respondent, vehemently opposed Arb. P. 217/2020. The ground for opposition would become clearer from the recital that follows. Suffice it to state, at this stage, that I am of the opinion that the opposition of Mr. Tejas Karia is without substance and that, therefore, the dispute between the petitioner and the respondent ought to be referred to arbitration. As such, in view of the submission made by Mr. Viswanathan, noted supra, OMP (I) (Comm) 162/2020 would also be decided by the Arbitral Tribunal under Section 17 of the 1996 Act. The necessity of this Court adjudicating on the said petition, thereby, stands obviated.

    Facts

4. A notice, dated 5th July, 2018, was issued by the respondentNHPC, inviting tenders for "Engineering Procurement Construction (EPC) Contract for 10 MW capacity Floating Solar Power Project at West Kallada in the State of Kerala with its Comprehensive Operation and Maintenance for 10 years". For the sake of convenience, the notice would be referred to, hereinafter, as "the NIT".

5. The following Clauses of the NIT are relevant:

    "3.2.A.1.2

    The bidder should have experience of having successfully completed a project of any nature involving floating structures/platform/ deck/ underwater cable works, in last five (5) years on Engineering, Procurement and Construction (EPC) basis.

    Note:-

    Floatation Device Technology Provider: The bidder should propose name of the float technology provider with whom they expect to tie-up for supply of the floats. Bidder may propose any number of vendors (including bidders own design) along with their credentials as part of their technical bid. However, prior to signing of the contract agreement, the successful bidder shall communicate their finalised float vendor."

    *****

    "3.2.A.4 Bidders with Sub-contractors:

    In case the Sole Bidder does not have all the required experience and also does not wish to enter into a joint-venture or wants to restrict the joint-venture partnership, he can associate Sub-contractor for specified activities (in case of Floatation Device Technology Provider or experience of installation of floating structures) in which he does not have the relevant experience. The criteria to be met by such Bidder shall be as follows:

    (i) The Bidder himself to fully meet the following:

    Technical criteria specified in para

    3.2.A.1.1 and 3.2.A.1.3

    All criteria mentioned under financial capacity.

    (ii) The number of sub-contractors not to exceed one for meeting the technical experience Criteria as specified in para 3.2.A.1.2

    (iii) The proposed sub-contractor to meet the specified criteria for the compone

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