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2022 Supreme(Del) 983
IN THE HIGH COURT OF DELHI AT NEW DELHI
Sanjeev Sachdeva, J.
Kiran Infra Engineers Limited - Appellant
Versus
Northern Railway Through General Manager - Respondent
Arbitration Petition No. 257 of 2022
Decided On : 06-05-2022
Deepak Biswas, Advocate, Ambuj Tiwari, Advocate, Sushi Kumar Pandey, Advocate, Sahaj Garg, Advocate, Rahul Maurya, Advocate
The effect of a supplementary agreement on a principal agreement and its arbitration clause should be determined by an arbitral Tribunal.
Headnote:
Arbitration - Supplementary Agreement - Indian Contract Act, 1872 - Sections 16, 23 - 40.1 Arbitration - The court allowed the application for condonation of delay in filing the reply and referred the disputes to arbitration, holding that the supplementary agreement's effect on the principal agreement and the arbitration clause should be determined by the arbitral Tribunal.
Fact of the Case:
The petitioner sought appointment of an arbitral Tribunal pursuant to a contract, while the respondent contended that a supplementary agreement discharged the principal agreement and rescinded all terms and conditions, including the arbitration clause. The petitioner alleged being forced to sign the supplementary agreement.
Finding of the Court:
The court found that the disputes regarding the effect of the supplementary agreement on the principal agreement and the arbitration clause should be referred to arbitration for determination.
Issues: Dispute over the effect of the supplementary agreement on the principal agreement and the arbitration clause, and allegations of duress and undue influence in signing the supplementary agreement.
Ratio Decidendi: The court held that the disputes raised by the petitioner should be ruled upon by the arbitral Tribunal, and no other objections were raised by the respondent.
Final Decision: The court allowed the petition, referred the disputes to arbitration, and appointed an arbitrator to adjudicate the claims and counter-claims of the parties.
JUDGMENT
Sanjeev Sachdeva, J. - I.a. 6361/2022
1. Respondent seeks condonation of 10 days' delay in filing the reply.
2. For the reasons stated in the application, the application is allowed. The reply is taken on record.
aRB. P. 257/2022
1. Petitioner seeks appointment of an arbitral Tribunal pursuant to the contract dated 01.04.2013.
2. Respondents in their reply contend that the agreement was superseded by a supplementary agreement dated 08.05.2017, which specifically stipulates that the principal agreement stands fully discharged and all terms and conditions including the arbitration clause stand rescinded.
3. Learned counsel for the petitioner contends that the supplementary agreement does not rescind or take away any right of the petitioner to initiate appropriate proceedings in accordance with law and that the agreement is hit by Sections 16 and 23 of the Indian Contract act, 1872.
4. Learned counsel submits that the petitioner was made to sign the supplementary agreement, failing which the payment of over would not have been released to the petitioner.
5. This is disputed by learned counsel for respondent.
6. The arbitration clause contained in the subject principal contract provides as under:-
'40.1 aRBITRaTION
(i) In the event of any dispute or difference between the parties hereto as to. the construction or operation of this contract, or the respective rights and liabilities of the parties on any matter in question, dispute or difference on any account or as to the withholding by the Railway of any certificate to which the contactor may claim to be entitled to, shall be referred by the contractor to the GM and the GM shall be within 120 days after receipt of the contractor's representation make and notify decisions on all matters referred to by the contractor in writing or if the GM fails to make a decision within 120 days, then and in any such case, but except in any of the 'excepted matters' (matters not arbitrable any decision of the Rly authority, thereon shall be final and binding on the contractor, provided further that 'excepted matters' shall stand specifically excluded from the purview of the arbitration clause), the contractor, after 120 days but within 180 days of his presenting his final claim on disputed matters shall demand in writing that the dispute or difference be referred to arbitration.
(ii) The demand for arbitration shall specify the matters which are in question or subject of the dispute or difference as also the amounts of claim item-wise. Only such dispute(s) or difference(s) in respect of which the demand has been made, together with counter claims or set off, given by the Railway, shall be referred to arbitration and other matters shall not be included in the reference.
(a) The arbitration proceedings shall be assumed to have commenced from the day, a written and valid demand for arbitration is received by the Railway.
(b) The claimant shall submit his claim stating the facts supporting the claims along with all relevant documents and the relief or remedy sought against each claim within a period of 30 days from the date of appointment of the arbitral Tribunal.
(c) The Railway shall submit its defence statement and counter claims, if any within a period of 60 days of receipt of copy of claims from Tribunal thereafter, unless otherwise extension has been granted by Tribunal.
(iii) No new claim shall be added during proceedings by either party. However party may amend or supplement the original claim or defence thereof during the course of arbitration proceedings subject to acceptance by Tribunal having due regard to the any objection in making it.
(iv) If the contractor(s) does/do not prefer his/their specific and final claims in writing, within a period of 90 days of receiving the intimation from the Railways that the final bill is ready for payment, he/they will be deemed to have Waived his/their claim(s) and the Railway shall be discharged and released of all liabilities under the contract in respe
