Back
IN THE HIGH COURT OF DELHI AT NEW DELHI
Sachin Datta, J.
Y. K. Goyal – Appellant
Versus
Delhi Urban Shelter Improvement Board & Ors. – Respondents
Arb.P. 326 of 2023
Decided On : 14-08-2023
Arbitration - Construction Dispute - Arbitration and Conciliation Act, 1996, Section 11(6)
Fact of the Case:
The petitioner sought appointment of an independent sole arbitrator to adjudicate a construction dispute under an Agreement. The petitioner raised bills and sought foreclosure of the agreement due to non-response from the respondents. The respondents failed to make payments despite several attempts to resolve the matter.
Finding of the Court:
The objections of time-bar and prematurity cannot prevent the constitution of an Arbitral Tribunal. The court appointed a Sole Arbitrator to adjudicate the disputes between the parties, allowing the respondents to raise preliminary objections as regards jurisdiction/arbitrability/limitation.
Issues: Time-barred claims, Prematurity of the petition, Appointment of Sole Arbitrator
Ratio Decidendi: The court held that the objections of time-bar and prematurity cannot prevent the constitution of an Arbitral Tribunal. The court relied on precedents to appoint a Sole Arbitrator and allowed the respondents to raise preliminary objections.
Final Decision: The court appointed a Sole Arbitrator to adjudicate the disputes between the parties, allowing the respondents to raise preliminary objections as regards jurisdiction/arbitrability/limitation.
JUDGMENT
Sachin Datta, J.
Factual Background
1. The present petition has been preferred under Section 11(6) of the Arbitration and Conciliation Act, 1996 (the `A&C Act') seeking appointment of an independent sole arbitrator to adjudicate the dispute between the parties.
2. The disputes between the parties have arisen under an Agreement dated 23.02.2017 for `Construction of 100 seater JSC/toilets at JJ Cluster G.T. Road, Lal Bagh, Delhi'. The petitioner was awarded the said work vide letter no. WI/6031/117/PG/EC-7/2016-17 D-253 dated 23.02.2017, issued by respondent no.3/Executive Engineer, pursuant to an e-tender.
3. The relevant arbitration clause is contained in the applicable General Conditions of Contract. Clause 25 thereof reads as follows:
"Clause 25: Settlement of Disputes & Arbitration
Except where otherwise provided in the contract all questions and disputes relating to the meaning of the specification, design, drawings and instructions herein before mentioned and as to the quality of workmanship or materials used on the work or as to any other question, claim, right, matter or things whatsoever, in any way arising out of or these condition or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of the work or after the cancellation, termination, completion or abandonment thereof shall be dealt with as mentioned hereinafter:
i) If the contractor consider any works demanded of him to be outside the requirement of the contract or disputes any drawings, record or decision given in writing by the Engineer in-charge on any matter in connection with or arising out of the contract or carrying out of the work, to be unacceptable, he shall promptly, within 15 days request the Superintending Engineer in writing for the written instruction or decision. Thereupon, the Superintending Engineer shall give his written instruction or decision within a period of one month from the receipt of the contractor's letter.
If the Superintending Engineer fails to give his instructions or decision in writing within the aforesaid period or if the contractor is dissatisfied with the instructions or decision of the Superintending Engineer, the contractor may, within 15 days of the receipt of Superintending Engineer's decision, appeal to the Chief Engineer who shall afford an opportunity to the contractor to be heard, if the latter so desires, and to offer evidence in support of his appeal. The Chief Engineer shall give his decision within 30 days of receipt of contractor's appeal. If the contractor is dissatisfied with the decision of the Chief Engineer, the contractor may within 60 days from the receipt of the Chief Engineer decision, appeal before the Dispute Redressal Committee (DRC) along with a list of disputes with amounts claimed in respect of each such dispute and giving reference to the rejection of his disputes by the Chief Engineer. The Dispute Redressal Committee shall give his decision within a period of 60 days, from the receipt of Contractor's appeal. The constitution of Dispute Redressal Committee shall be as indicated in Schedule F. If the Dispute Redressal Committee fails to give his decision within the aforesaid period or any party is dissatisfied with the decision of Dispute Redressal Committee, then either party may within a period of 60 days from the receipt of the decision of DRC, give notice to the Chief Engineer for appointment of arbitrator on prescribed proforma as per Appendix XV, failing which the said decision shall be final binding and conclusive and not referable to adjudication by the Arbitrator.
It is a term of contract that each party invoking arbitration must exhaust the aforesaid mechanism for settlement of claims/disputes prior to invoking arbitration.
(ii) Except where the decision has become final, binding and conclusive in terms of Sub Para (i) above disputes or difference shall be referred for adjudication through arbitration by a sole arbitrator app
The court confirmed the existence of an arbitration agreement and mandated the appointment of a sole arbitrator to adjudicate contract disputes, highlighting the necessity of complying with contractu....
The Court emphasized the principle of 'when in doubt, do refer' and left the issues of limitation and compliance with the procedure for DRC under Clause 25 for consideration by the arbitrator.
The pre-arbitration procedures under the arbitration clause are not always mandatory, and the court may refer disputes to arbitration if the requisites of arbitrability and notice under the Arbitrati....
Arbitration - Appointment of Arbitrator - Court is not required to examine any other contentious issues regarding the disputes between the parties at the stage of referring the parties to arbitration....
The court ruled that claims regarding limitation and the validity of invoking arbitration must be determined by the Arbitral Tribunal, reaffirming the applicability of Article 137 of the Limitation A....
An arbitration agreement remains valid and enforceable despite procedural limitations on arbitrator appointment, ensuring disputes are addressed effectively.
As per Section 11 (13) of the Act now arbitration is required to be decided within 30 days.
The court affirmed that failure to adhere to the dispute resolution procedure allows a party to invoke arbitration directly, emphasizing the importance of timely actions in contractual disputes.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
