The MoU constituted novation of the 2014 Contract, and the tribunal does not have the jurisdiction to entertain disputes under the arbitration clause contained in the 2014 Contract.

JUDGMENT

1. By way of the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 [hereinafter, "the Act"], the petitioner seeks setting aside of an award dated 07.01.2019, rendered by a learned sole arbitrator in disputes raised by the petitioner under an undated Construction Contract entered into between the parties in August, 2014^{1[The copy of the agreement placed on record states that it was executed in August 2014, but the pleadings and the impugned award give the date as November, 2014.]} [hereinafter, "the 2014 Contract"].

Facts

2. The 2014 Contract was for civil and structural works for a project known as "MIST" situated in Sector 143B, Noida, Uttar Pradesh. The estimated value of the contract was approximately Rs.229 crores, which was to be executed on a Bill of Quantities [hereinafter, "BOQ"]/item rate basis. It contained an arbitration clause [Clause 20], which reads as follows:

"20. ARBITRATION & DISPUTE RESOLUTION:

The Owner and the Contractor shall make all possible efforts to amicably sort out and resolve all matters of disputes and differences, which might directly or indirectly arise under, out of, in connection with, or in relation to this Agreement. Any dispute, difference or question that is not resolved through joint discussions shall be referred to the sole arbitrator to be appointed by the parties by mutual consent within 30 days of the raising of an arbitrable dispute by any of the party The arbitration proceedings shall be held in New Delhi, in English language and in accordance with the provisions of the Arbitration and Conciliation Act, 1996 and the rules made there under, as statutorily amended, modified, replaced, substituted or re-numbered from time to time."

3. It appears that certain disputes arose between the parties, which were resolved mutually, and the terms recorded in a Memorandum of Understanding dated 08.10.2015 [hereinafter, "the MoU"]. Admittedly, the MoU does not contain an arbitration clause at all. The central dispute between the parties is as to whether the arbitration agreement contained in the 2014 Contract survived the execution of the MoU.

4. The learned arbitrator has come to the conclusion that the MoU constitutes novation of the 2014 Contract and the tribunal does not have the jurisdiction to entertain disputes under the arbitration clause contained in the 2014 Contract.

5. As the question in the present petition turns upon the contents of the MoU, the relevant clauses thereof are reproduced below:

"WHEREAS by the virtue of the construction agreement executed at Noida in the month of November 2014 on the certificate No. IN-DL85721631158550M between the 1st & 2nd parties herein, the 2nd party awarded the mix use project known as "MIST" situated at Plot no. 1, Sector 143B Nodia, UP as "Work Site" Or "Project" to 1st party.

WHEREAS both the parties herein abide by the terms & conditions of the said agreement and the 1st party herein starts its construction activities/working in accordance of the covenants of the aforementioned construction agreement.

WHEREAS during the construction of the work awarded by the 2nd Party, the 1st Party faced certain issues in executing their part of the contractual agreement due to which the work got delayed and could not be completed substantially, therefore, the 1 & 2nd Parties herein resolved their issues in the meeting held on 30th September 2015 and decided to record the minutes of meeting and to cancel the above said "construction agreement" executed between them.

Now, both the parties have settled the issues amicably and terms & conditions of the same are reduced to writing as mentioned hereunder:

NOW THIS MEMORANDUM OF UNDERSTANDING WITNESSETH AS FOLLOWS:

Reference of the various meetings on the subject matter, and final meeting on 30th September 2015, we record our final understanding agreed as under:

1. The "Construction Agreement" between the parties will stand fully satisfied towards both the parties upon the contrac