The conciliation process under the Arbitration Agreement was not mandatory, and the petitioner's attempts at mutual consultation satisfied the requirements of the contract.

JUDGMENT

Navin Chawla, J. (Oral)

1. This petition has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') seeking appointment of an Arbitrator for adjudicating the disputes that have arisen between the parties in relation to the Contract Agreement dated 17.12.2019 executed between the parties regarding the "Engagement Of An Agency For Tipper Loading, Wagon Loading & Transportation Of Coal From Any Designated Mines To Any Designated Railway Siding For NTPC BARH-II (2X660 MW) Through RCR Mode".

2. The Arbitration Agreement between the parties is contained in Clause 7.3 of the General Conditions of the Contract (in short, the 'GCC').

3. The petitioner, before invoking the Arbitration Agreement, vide letter dated 05.09.2020, called upon the respondent to hold a joint discussion so that suitable course of action with regard to recommencement/reinstatement of work may be worked out mutually between the parties. In response, the respondent vide letter dated 04.12.2020, however, stated that the claim of the petitioner is not tenable. The petitioner, thereafter, by its letter dated 07.01.2021, while reiterating its claims, again called upon the respondent to hold a joint meeting to amicably resolve the existing issues. As no response to this notice was received, the petitioner invoked the Arbitration Agreement vide notice dated 19.02.2021.

4. The learned counsel for respondent submits that the present petition is not maintainable inasmuch as the petitioner has failed to comply with the mandatory procedure prescribed to be followed prior to seeking appointment of an Arbitrator. Referring to Clause 7.2 of the GCC, he submits that prior to invoking arbitration, the petitioner was to seek conciliation through an Expert Settlement Council (in short, 'ESC'). He submits that the petitioner failed to do so and, therefore, the present petition is premature. Referring the judgment of this Court in Sushil Kumar Bhardwaj v. Union of India, 2009 SCC OnLine Del 4355, he submits that for maintainability of the petition under Section 11(6) of the Act, the petitioner has to necessarily show that the procedure prescribed in the Arbitration Agreement has been duly followed. In the present case, as the petitioner has admittedly not invoked the conciliation process, the present petition is not maintainable. He submits that, in fact, Conciliation, as a process of dispute resolution, is to be encouraged and is even statutorily mandated in terms of Section 62 of the Act.

5. The learned counsel for the respondent further submits that the notice dated 19.02.2021 is also not in terms of Clause 7.3.1 of the GCC inasmuch as it does not give the details of the claims, including the heads/sub-heads of the claims. He submits that the Arbitration Agreement is restricted in nature inasmuch as arbitration can be invoked only where the total amount of claim, excluding claim of interest, does not exceed Rs.25 Crore.

6. I have considered the submissions made by the learned counsels for the parties.

7. Clause 7.1 of the GCC provides for the parties to attempt resolution of their disputes through mutual consultation. Admittedly, the petitioner made attempts of such settlement and invoked the said process by its notices dated 05.09.2020 and 07.01.2021.

8. Clause 7.2 of the GCC reads as under:

"7.2 Resolution of Dispute through Expert Settlement Council

If the parties fail to resolve such a dispute or difference by mutual consultation, the dispute if the parties agree, may be referred to Conciliation in cases involving disputed amount up to Rs 250 crores, which is to be arrived at considering the claim and counter claim of the parties to the dispute."

(Emphasis supplied)

9. A reading of the above Clause of the GCC would show that upon failure of the parties to arrive at an amicable settlement through mutual consultation, a further forum has been created for exploring the possibility of an amicable settlement t