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IN THE HIGH COURT OF DELHI AT NEW DELHI
Chandra Dhari Singh, J.
Rama Civil India Construction Pvt. Ltd. – Appellant
Versus
Delhi Transco Limited – Respondent
Arb.P. 1333 of 2022
Decided On : 12-04-2023
Arbitration - Appointment of Sole Arbitrator - Arbitration and Conciliation Act, 1996
Fact of the Case:
The petitioner, a company incorporated under the Companies Act, 2013, entered into a contract with the respondent for the construction of a boundary wall. Due to delays and breaches by the respondent, the work was prolonged, causing losses to the petitioner. The petitioner requested the respondent to release the outstanding amount for the project, but the respondent did not respond. Consequently, the petitioner filed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 before the court for the appointment of an arbitrator.
Finding of the Court:
The court found that the disputes between the parties were arbitrable in nature and agreed to refer the disputes to arbitration by appointing a sole arbitrator. Justice Dinesh Kumar Singh, Former Judge, Patna High Court, was appointed as the sole arbitrator to adjudicate the disputes between the parties.
Issues: Disputes arising from delays and breaches in a construction contract, appointment of a sole arbitrator, compliance with Section 12(1) of the Arbitration and Conciliation Act, 1996.
Ratio Decidendi: The court decided to refer the disputes to arbitration and appointed a sole arbitrator based on the parties' request and the arbitrability of the disputes. The court also emphasized the compliance with Section 12(1) of the Arbitration and Conciliation Act, 1996.
Final Decision: The court appointed Justice Dinesh Kumar Singh as the sole arbitrator, directed compliance with Section 12(1) of the Arbitration and Conciliation Act, 1996, and instructed the parties to appear before the arbitrator within 10 days.
ORDER
Chandra Dhari Singh, J. (Oral)--The instant petition under Section 11 of the Arbitration and Conciliation Act, 1996 has been filed on behalf of the petitioner seeking the following reliefs:
"i. To appoint a Sole Arbitrator, as mentioned in the petition to adjudicate the disputes and differences between the Petitioner and Respondent, or
ii. To appoint a Sole Arbitrator to adjudicate the claims of the Petitioner in accordance with the Arbitration and Conciliation Act, 1996 as amended;
iii. Any other or further order/direction, which this Hon'ble Court may deem fit and proper in the facts and circumstances of the present case."
2. Petitioner is a company incorporated under the Companies Act, 2013 on 11.08.2017 having its office at-H/240, Ashok Vihar Phase 1, Delhi, whereas the Respondent is a limited company incorporated under Companies Act, 1956 having its office at Shakti Sadan, Kotla Marg, New Delhi.
3. It is submitted that the Respondent invited bids for 'Construction of Boundary wall at a 220KV grid sub-station at south of Wazirabad' through tender no. T14P130479. Petitioner submitted bid and work was awarded to the petitioner on 23.02.2016 and the said work was awarded to Petitioner vide Purchase Order No. 4500000224 dated 06.03.2017.
4. Pursuant to this, a contract agreement dated 11.04.2017 was signed between Petitioner and the Respondent pursuant to the Purchase Order and Tender for 'Construction of Boundary wall at 220 KV grid sub-station South of Wazirabad'. The time schedule for completing the work was for 365 days from the date of commencement i.e. from 24.04.2017 until 23.04.2018.
5. It is submitted that because of delays, defaults and breaches caused and committed by the Respondent in performing its contractual obligations, Respondent had approved the Extension of Time without levy of compensation/liquidated damages. Consequently, the work was prolonged and was completed on 16.01.2019, causing huge losses to the Petitioner. The Respondent despite assuring the Petitioner on multiple occasions did not compensate for losses suffered by the Petitioner due to extension of time for completion of work.
6. It is stated that vide letter dated 14.07.2021, Petitioner requested the Respondent to release the outstanding amount for the project. The petitioner had neither received any amount nor reply after issuance of the letter dated 14.07.2021. Thus, in view of the wrongful retaining/non-releasing the amounts due for payments by the Respondent mentioned in the letter dated 14.07.2021, the dispute has arisen between the parties.
7. It is submitted that, therefore, in terms of the provisions contained in Condition 11 of the Terms and Conditions annexed with purchase orders dated 06.03.2018 and 11.05.2018 and Clause 25 pertaining to Arbitration contained in General Conditions of Contract dated 11.04.2017 for resolving the matters in dispute, the Petitioner vide letter dated 03.08.2021 requested the Respondent for appointment of a sole arbitrator to resolve the dispute. It is stated that on receipt of the letter for appointment dated 03.08.2021, Respondent issued a reply dated 27.08.2021, denying all the claims mentioned in the letter, and did not appoint any arbitrator.
8. It is further stated that the Petitioner had issued a detailed letter dated 20.04.2022 pertaining to description of claim of the Petitioner and for appointment of sole Arbitrator to adjudicate the dispute between the parties. In this said letter, Petitioner had reiterated that office of Respondent cannot appoint any person as arbitrator unilaterally as per Arbitration and Conciliation Act, 1996 and as per the guidelines laid down by Hon'ble Supreme Court.
9. It is stated that vide the said letter dated 20.04.2022, Petitioner had proposed five names of renowned persons who have vast experience in the field of Arbitration taken from the approved list of empanelled Arbitrators in PWD, GNCTD dated 27.12.2021. Accordingly, the Petitioner issued another not
The court's decision emphasized the arbitrability of disputes and the appointment of a sole arbitrator under the Arbitration and Conciliation Act, 1996.
The court's authority to appoint a sole arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996.
Premature petitions under Section 11 of the Arbitration and Conciliation Act, 1996, are not maintainable when a Sole Arbitrator has already been appointed, and unresponsiveness of the current Arbitra....
Unilateral appointment of an Arbitrator by one party is void under the Arbitration and Conciliation Act, reinforcing the need for impartial adjudication by the court.
: Unilateral appointment of an arbitrator defeats unbiased adjudication; when an arbitration clause does not provide for a panel of arbitrators, the task of appointing an arbitrator devolves on the C....
The unilateral appointment of an arbitrator violates the principle of unbiased adjudication, requiring mutual agreement between parties for such appointments.
The court has the authority to appoint a sole arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 when the parties fail to agree on the appointment.
The main legal principle established in the judgment is the court's authority to appoint a Sole Arbitrator and refer disputes arising from a tender to Arbitration in accordance with the provisions of....
The court appointed a sole arbitrator to resolve disputes under a tender agreement after the respondent failed to respond to the arbitration notice, confirming necessity when an arbitration clause is....
The main legal point established is the court's authority to appoint a Sole Arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 to resolve disputes between parties as agreed upo....
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