IN THE HIGH COURT OF DELHI AT NEW DELHI
Jyoti Singh, J.
Tpf Getinsa Euroestudios, Sl In Ass. With Segmental Consulting & Infr. Advisory (p) Ltd – Appellant
Versus
National Highways Auth. of India – Respondent
O.M.P.(I) (COMM.) 199 of 2023
Decided On : 21-08-2023
Arbitration - Termination of Contract - Arbitration and Conciliation Act, 1996 - Section 9
Fact of the Case:
Disputes arose due to the termination of a Contract Agreement for a highway project. The petitioner sought interim relief to stay the termination notice.
Finding of the Court:
The court appointed a sole arbitrator in accordance with the Dispute Resolution Mechanism in the Contract Agreement and directed the expedited handling of the arbitration process.
Issues: Dispute resolution mechanism, appointment of sole arbitrator, application under Section 17 of the 1996 Act
Ratio Decidendi: The court's decision was based on the agreement between the parties for arbitration, as specified in the Contract Agreement, and the provisions of the Arbitration and Conciliation Act, 1996.
Final Decision: The petition was disposed of with the appointment of a sole arbitrator and directions for expedited arbitration proceedings.
JUDGMENT
Jyoti Singh, J. (Oral)--Present petition has been filed by the Petitioner under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the `1996 Act') seeking the following reliefs:
"a. Grant ad-interim ex-parte stay of the operation of the impugned termination notice dated 17.05.2023;
b. Pass an ad-interim direction against the Respondent Authority, restraining them from taking any coercive actions in furtherance of the impugned termination notice dated 17.05.2023;
c. Pass directions directing the Respondent Authority to continue to act in accordance with the terms of the Contract Agreement dated 11.12.2019;
d. Hold issuance of the impugned termination notice dated 17.05.2023 as null & void, being illegal and in the teeth of settled principles of law;
e. Issue appropriate directions/orders directing the Respondent not to encash the Bank Guarantees submitted by the Petitioner;"
2. Disputes between the parties have arisen on account of termination of Contract Agreement dated 11.12.2019, whereby the Petitioner in association with Segmental Consulting and Infrastructure Advisory (P) Ltd. was appointed as NHAI's Engineer for Rehabilitation and Upgradation of existing two-lane to four-lane standards from Duburi to Chandikhole Section (Km.338.376-Km.428.074) of NH-200 (New NH-53) in the State of Odisha under NHDP-III on EPC Mode (Pkg.-III) by NHAI. This petition was triggered by the termination notice dated 17.05.2023 and Petitioner seeks an interim relief staying the operation of the said notice.
3. During the course of hearing, parties have agreed that this Court may appoint the sole Arbitrator in accordance with the Dispute Resolution Mechanism between the parties incorporated in Clauses 2.9.6 (General Conditions of Contract) and 8.2.1 (Special Conditions of Contract) forming a part of the Contract Agreement dated 11.12.2019 and this petition be treated as a petition under Section 17 of the 1996 Act to be presented before the learned Arbitrator. Parties have further agreed that the sole Arbitrator be appointed from the list published by Society for Affordable Redressal of Disputes (`SAROD'), copy of which has been handed over in Court by Mr. Bishnoi, in accordance with Clause 8.2.1. Mr. Kirpal, learned Senior Counsel for the Petitioner expresses an urgency in the matter since interim relief has been sought and prays that this petition be treated as an application under Section 17 of the 1996 Act and record of this case be transmitted to the learned Arbitrator.
4. In view of the agreement between the parties for appointment of a sole Arbitrator for adjudication of the disputes arising out of the Contract Agreement dated 11.12.2019, this Court finds no impediment in appointing the Arbitrator. Relevant Clauses pertaining to the Dispute Resolution Mechanism including arbitration are as follows:
"2.9.6. Disputes about Events of Termination
If either Party disputes whether an event specified in paragraphs (a) through (e) of Clause GC 2.9.1 or in Clause GC 2.9.2 hereof has occurred, such Party may, within forty-five (45) days after receipt of notice of termination from the other Party, refer the matter to arbitration pursuant to Clause GC 8 hereof, and this Contract shall not be terminated on account of such event except in accordance with the terms of any resulting arbitral award.
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8.2.1 Selection of Arbitrators
Each dispute submitted by a Party to Arbitration shall be heard by a sole arbitrator. NHAI shall within 30 days propose names of five (5) Arbitrators from the list of Arbitrators maintained by SAROD (Society for Affordable Redressal of Disputes) and Consultant shall within 30 days select one name from the list of five and the name so selected by the Consultant shall be the Sole Arbitrator for the matter in dispute. In case NHAI delays in providing the list of 5 names, President, SAROD will provide 5 names within 30 days of receipt of reference from aggrieved party in this regard.
The main legal point established is the recognition of urgency in interim relief and the direction for an expeditious hearing before the learned Arbitrator.
The issuance of a termination notice does not terminate the contract if the affected party invokes arbitration within the stipulated period as per the agreement's clause.
Delays in arbitration proceedings and failure to comply with the requirements of the Arbitration and Conciliation Act, 1996 can warrant the termination of an arbitrator's mandate.
The court has the authority to direct an arbitrator to pass the award expeditiously, considering the delay and the parties' agreement to proceed with the same arbitrator.
Section 12(5) of the Arbitration and Conciliation Act mandates the termination of an arbitrator's mandate if applicable, ensuring appointment of a qualified substitute arbitrator for fairness in proc....
Arbitration Application – Grant if interim relief - Court exercising appellate jurisdiction against an order in a Section 9 application, do not even have jurisdiction
Parties agreed to refer disputes to arbitration under Section 17 of the Arbitration and Conciliation Act, 1996; interim directions remain operational until arbitrator's decision.
The court's authority to appoint an arbitrator in cases where the parties are unable to agree, in accordance with the law laid down by the Supreme Court and the provisions of the Arbitration & Concil....
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