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2023 Supreme(Del) 466

IN THE HIGH COURT OF DELHI AT NEW DELHI
Chandra Dhari Singh, J.
M/s Ashoka Enterprises - Petitioner
Versus
Union Of India - Respondent
ARB.P. 18 of 2023
Decided On : 02-03-2023

Advocate Appeared:
For the Petitioner:Mr. S.W. Haider and Ms. Pooja Dua, Advocates
For the Respondent:Mr. Vineet Dhanda, CGSC with Mr. Hussain Taqvi and Mr. Shubham Prasad, Advocates

The main legal point established is the arbitrability of disputes under the construction contract and the court's authority to appoint a sole arbitrator under the Arbitration and Conciliation Act, 1996.

Headnote:

Arbitration - Construction Contract - Arbitration and Conciliation Act, 1996, Section 11 - Code of Civil Procedure, 1908, Section 151

Fact of the Case:

The petitioner, a partnership firm engaged in construction and railway contracts, sought the appointment of an independent arbitrator to adjudicate upon claims amounting to approximately Rs. 1,13,32,269 arising from a construction project awarded by the respondent. The respondent delayed payments and failed to constitute the Arbitral Tribunal despite multiple reminders.

Finding of the Court:

The court found that the disputes between the parties were arbitrable in nature as per Clause 64 of GCC, and appointed a sole arbitrator to adjudicate the disputes under the construction contract. The court also directed the arbitrator to ensure compliance with Section 12(1) of the Arbitration and Conciliation Act, 1996.

Issues: The issues involved the delay in completion of work, increased scope of work, delayed payments, and failure to constitute the Arbitral Tribunal.

Ratio Decidendi: The court held that the disputes between the parties were arbitrable in nature and appointed a sole arbitrator to resolve the disputes under the construction contract.

Final Decision: The court ordered the appointment of a sole arbitrator, directed compliance with Section 12(1) of the Arbitration and Conciliation Act, 1996, and disposed of the petition along with pending applications.

ORDER :

Chandra Dhari Singh, J.

1. The instant application under Section 11 of the Arbitration and Conciliation Act, 1996 read with Section 151 of the Code of Civil Procedure, 1908 has been filed on behalf of the petitioner seeking the following prayer :-

    "a) appoint an independent arbitrator to adjudicate upon the claims of the petitioner amounting to approx. Rs. 1,13,32,269/- (Rupees One Crore Thirteen Lac Thirty Two Thousand Two Hundred and Sixty Nine Only) alongwith interest thereon…"

2. Learned counsel for the petitioner submitted that the petitioner is a partnership firm engaged in the business of construction and railway contracts.

3. Learned counsel for the petitioner submitted that the project for "Construction of Holiday Home at Kedarnath Dham in the Section of SSE/W/HW under ADEN/RK" was awarded to the petitioner by the respondent vide letter dated 17th October 2007 for INR 75,70,898.56, and stipulated period of completion of work was 6 months, i.e. on or before 16th April 2008.

4. Learned counsel for the petitioner submitted that despite the arrangements for timely completion of work the same could not be completed due to reasons such as the substantial increase in the scope of work, persistent hindrances like difficult terrain, adverse climatic conditions, and restriction on movements of goods by the state authorities and for other reasons totally attributable to the respondent department consequently extending the work finally up to 30th October 2009 on administrative grounds.

5. Learned counsel for the petitioner submitted that the respondent showed no seriousness about the work since the contract started as the respondent was late in sanctioning the Addendum and Corrigendum, lacked planning, increased work costs by more than 115 %, and there was shortage of funds by the respondent.

6. Learned counsel for the petitioner submitted that work was finally completed on 25th October 2009 but due to natural calamity, a portion of the building was destructed and the petitioner was instructed to repair the damaged part, which was repaired by June 2011.

7. It is further submitted that the petitioner kept on reminding the respondent about the preparation and payment of the final bill but the respondent kept on evading the bill on one pretext or the other.

8. It is submitted that after much persuasion the final bill payment was made only in regard to 49.56% increased quantities of work by the respondent on 15th February 2012.

9. Learned counsel for the petitioner submitted that on explicit instructions by the respondent recorded in the order book vide entries dated 22nd, 23rd April 2013, and 30th May 2013, the petitioner executed certain more works relating to Holiday Home at Kedarnath Dham.

10. It is submitted that the respondent take steps to clear the payment of aforesaid recorded work even after several follow-up letters by the petitioner which were acknowledged by the respondent.

11. Learned counsel for the petitioner submitted that vide letter dated 9th April 2021, the petitioner invoked Arbitration Clause under GCC Clause 64 calling upon the respondent to make the payments of claims of the petitioner.

12. Learned counsel for the petitioner further submitted that vide reply dated 7th June 2021, the respondent asked for a waiver under Section 12(5) of the Arbitration and Conciliation Act, 1996 which was not given by the petitioner as the petitioner wanted an independent Arbitrator.

13. Learned counsel for the petitioner submitted that a petition under Section 11 dated 7th August 2021 which was filed before this Court was objected to by the respondent on the grounds that the said petition is timebarred, and accordingly, the said petition was withdrawn on account of lack of details and crucial documents vide order dated 24th November 2021.

14. It is further submitted that post-withdrawal, the petitioner approached the respondent for appointment of the Arbitral Tribunal vide letter dated 20th December 2021 giving a waiver under Section 1

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