Disputes arising from Notified Claims in the Final Bill are required to be referred to arbitration, and the determination of Notified Claims must be made before invoking arbitration.

JUDGMENT

Vibhu Bakhru, J. - The petitioner (hereafter 'JACL') has filed the present petition under Section 11 of the Arbitration and Conciliation Act, 1996 (hereafter 'the A&C Act') praying that a sole arbitrator be appointed in accordance with Clause 9.0.1.1 of the General Conditions of Contract (GCC).

Factual Matrix

2. Respondent no.1 (hereafter 'IOF') appointed respondent no.2 (hereafter 'EIL') as the Engineering Project Construction Management (EPCM) to complete the work of developing infrastructure facilities at Khajekhalan Ghat, Patna Sahib, Patna (hereafter 'the Project'). Thereafter, EIL issued an Open Tender Notice dated 14.06.2018, inviting e-bids for execution of the Project.

3. Pursuant to the aforesaid tender notice, JACL submitted its bid for the contract to execute the Project. JACL's bid was the lowest (L1) and was accepted in terms of the Letter of Acceptance (LoA) dated 13.09.2018. Thereafter, on 10.10.2018, the parties entered into an agreement (hereafter 'the Contract'). The Project was to be completed within a period of twelve months from the date of issuance of the LoA, that is, on or before 13.09.2019.

4. The Project, inter alia, entailed construction of the staircase area, which included the foundation of the staircase that was to be made below the river water level. This required building a cofferdam to prevent the water from entering the area where the construction work was to be done.

5. JACL, inter alia, claims that the respondents provided them with the structural designs and drawings for the construction of the cofferdam. The design provided was of a sandbag design cofferdam that was 0.5 meters above water level with no wall covering on the downstream side of the cofferdam.

6. JACL claims that it followed the respondents' instructions and design and made the cofferdam accordingly. However, the design was not based on sound engineering principles and was not in conformity with the standard industrial practice of using sheet pile cofferdam for alluvial river beds where discharge is unpredictable.

7. On 12.04.2019, due to heavy rainfall, there was heavy flow of water leading to a rise in the water level of the river Ganga, which resulted in the destruction of the cofferdam. Additionally, machines and equipment in the surrounding area were damaged or washed away in the river. JACL claims that it suffered losses due to this and the respondents did not reimburse them for such losses.

8. Thereafter, to make the site ready for the Project again, there was a need for dewatering of the site. JACL was granted permission for the same. JACL claims that the respondents were aware of the fact that dewatering and removal of debris were not covered under the insurance policy, as they had approved the policy. JACL claims that notwithstanding the same, the respondents refused to pay for the dewatering and related works after the same were completed. Resultantly, JACL had to bear the expenses.

9. Subsequently, a new cofferdam was required to be constructed. JACL contends that the respondents denied its suggestions to make the new cofferdam by sheet piling method or raise the height of the sandbag cofferdam to at least one meter above water level. The only change allowed was the addition of a wall on the downstream side of the cofferdam. On 04.05.2019, due to an increase in the water level, the cofferdam was again destroyed.

10. On 21.08.2019, JACL raised the Fifth Running Account (RA) Bill to the respondents for the work completed by them. On the instruction of the respondents, this bill was revised and sent to the respondents by an e-mail dated 27.08.2019. JACL claims that the respondents refused payment of the bill and denied the existence of any such claim due to JACL.

11. Thereafter, the respondents, through letters/notices dated 06.01.2020, 13.01.2020, 28.01.2020, threatened to terminate the Contract due to inaction and delay in completion of the Project on the part of JACL.

12. On 07.02.2020, a meeting was held between the