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IN THE HIGH COURT OF DELHI AT NEW DELHI
Sachin Datta, J.
Reliance Infrastructure Limited – Appellant
Versus
Madhyanchal Vidyut Vitran Nigam Limited – Respondent
O.M.P.(MISC.)(COMM.) 161 of 2020 and IA No. 9377 of 2020
Decided On : 14-08-2023
Arbitration - Territorial Jurisdiction - Arbitration and Conciliation Act, 1996 - Section 29A (4) and (5) - [Arbitration] - [Territorial Jurisdiction] - [48.0, 21.0, 48.1.2, 8.0, 8.1, 21.1, 21.2] - The court held that the choice of Delhi as the venue of arbitration demonstrates that Delhi is the seat of arbitration. The court also found that the amendments made to Section 29A of the Act in 2019 are applicable to all pending arbitration proceedings commenced after the Amendment Act of 2015. The court allowed the petition and extended the time for completion of arbitration proceedings and making of the arbitral award by a period of one year from the date of the judgment.
Fact of the Case:
The petitioner filed a petition seeking extension of time for completion of arbitral proceedings and making of the arbitral award. The respondent objected to the petition on the grounds of territorial jurisdiction and delay. The disputes between the parties arose in the context of contracts for Rural Electrification works in Uttar Pradesh. The petitioner invoked arbitration, and a Sole Arbitrator was appointed to adjudicate the disputes. The petitioner sought extension of time for making the arbitral award by the Sole Arbitrator.
Finding of the Court:
The court found that Delhi is the seat of arbitration based on the choice of Delhi as the venue of arbitration. The court also held that the amendments made to Section 29A of the Act in 2019 are applicable to the pending arbitration proceedings. The court allowed the petition and extended the time for completion of arbitration proceedings and making of the arbitral award by a period of one year from the date of the judgment.
Issues: The issues before the court were whether the court has territorial jurisdiction to entertain the petition and whether the petition suffers from delay and laches, and whether there is sufficient cause for allowing the petition.
Ratio Decidendi: The court held that the choice of Delhi as the venue of arbitration demonstrates that Delhi is the seat of arbitration. The court also found that the amendments made to Section 29A of the Act in 2019 are applicable to all pending arbitration proceedings commenced after the Amendment Act of 2015. The court allowed the petition and extended the time for completion of arbitration proceedings and making of the arbitral award by a period of one year from the date of the judgment.
Final Decision: The court allowed the petition and extended the time for completion of arbitration proceedings and making of the arbitral award by a period of one year from the date of the judgment.
JUDGMENT
Sachin Datta, J.
1. The present petition, under Section 29A (4) and (5) of the Arbitration and Conciliation Act, 1996 (the `Act'), has been filed seeking extension of time for completion of arbitral proceedings and making of the arbitral award.
2. The respondent in its reply has raised two objections to the present petition. Firstly, it is contented that this court does not have the territorial jurisdiction to entertain the present petition. Secondly, it is contended the present petition is liable to be dismissed on the ground of delay and laches.
FACTUAL BACKGROUND
3. The respondent invited bids for Rural Electrification works in Pilibhit and Hardoi Districts, Uttar Pradesh under Government of India Scheme known as Rajiv Gandhi Gramin Vidyutikaran Yojana, vide tender issued on 02.04.2005. The petitioner submitted its proposals/bids for the said works on 10.05.2005 and 11.05.2005.
4. The applicable General Conditions of Contract ("GCC") for the said works contemplates resolution of disputes as under:
"8.0 JURISDICTION OF CONTRACT
8.1 The laws applicable to the Contract shall be the laws in force in India. The Court of Delhi shall have exclusive jurisdiction in all matters arising under this Contract."
xxx xxx xxx
48.0 ARBITRATION
48.1 All disputes or differences in respect of which the decision, if any, of the Engineer has not become final or binding as aforesaid shall be settled by arbitration in the manner hereinafter provided.
48.1.1 The arbitration shall be conducted by three arbitrators, one each to be nominated by the Contractor and the Employer and the third to be appointed as an umpire by both the arbitrators in accordance with the Indian Arbitration Act. If either of the parties fails to appoint its arbitrator within sixty (60) days after receipt of a notice from the other party invoking the Arbitration Clause, the arbitrator appointed by the party invoking the arbitration clause shall become the sole arbitrator to conduct the arbitration.
48.1.2 The arbitration shall be conducted in accordance with the provisions of the Indian Arbitration Act, 1940 or any statutory modification thereof. The venue of arbitration shall be New Delhi.
48.2 The decision of the majority of the arbitrators shall be final and binding upon the parties. The arbitrators may, from time to time with the consent of the parties enlarge the time for making the award. In the event of any of the aforesaid arbitrators dying, neglecting, resigning or being unable to act for any reason, it will be lawful for the party concerned to nominee another arbitrator in place of the outgoing arbitrator.
48.3 The arbitrator shall have full powers to review and/or revise any decision, opinion direction, certification or valuation of the Engineer in accordance with the arbitrators to the evidence or arguments put before the Engineer for the purpose of obtaining the said decision.
48.4 No decision given by the Engineer in accordance with the foregoing provisions shall disqualify him as being called as a witness or giving evidence before the arbitrators on any matter whatsoever relevant to the dispute or difference referred to the arbitrators as aforesaid.
48.5 During settlement of disputes and arbitration proceedings, both parties shall be obliged to carry out their respective obligations under the Contract."
5. The petitioner was declared as a successful bidder by the respondent and consequently, the two Contracts were awarded to the petitioner. The Letter of Awards ("LOA") dated 01.08.2005 that came to be issued, contained the following stipulation:
"21.0 SETTLEMENT OR DISPUTES AND ARBITRATION:
21.1 All the difference or disputes arising out of this Contract shall be settled through the process of "Settlement of Disputes" and "Arbitration" as per clause 49.0 Section-GCC. Conditions of Contract Vol-III of the bidding Documents/The provision of Arbitration & Reconciliation Act 1996 as amended from time to time, shall apply
21.2 The local court of Lucknow, high court of
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