The main legal point established in the judgment is that compliance with pre-arbitral steps and the terms of the contract are crucial in determining the arbitrability of disputes.

JUDGMENT

1. By way of present petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereafter, `the A&C Act'), the Petitioner seeks appointment of an Arbitral Tribunal.

2. Brief facts of the case are as follows. Petitioner participated in the tender process floated by the Respondent for `Earthwork, Construction of CC, Block Pavement Approach Road, P-Way Track Work, Boundary Wall Pre-Engineered Warehouses, Admin. Building and Other Allied works for development of MMLP At-Jaipur Road, Jaipur, Odisha', wherein it was declared as the `lowest technically successful bidder'. Pursuant to the same, an agreement bearing No. CON/EP/MMLP Jaipur/Civil & Electrical Works/2018 (hereafter, `the Agreement') dated 15.04.2019 was entered into between the parties. Besides the said agreement, the contract was governed by the General Conditions of Contract (hereafter, `the `GCC').

3. Arbitration Agreement between the parties is embodied in Clause 64 of the GCC, and the present petition has been filed for appointment of Arbitral Tribunal in terms thereof.

4. The underlying dispute pertains to termination of Agreement by the Respondent through two letters dated 21.07.2021 and 03.08.2021. Petitioner felt aggrieved by the termination and issued a notice dated 06.09.2021, asking the Respondent to take mitigating steps in terms of Clause 63 of GCC for resolving the disputes within 120 days. On failure of the Respondent to rectify its decision, as alleged by the Petitioner, it issued notice of invocation of arbitration on 11.03.2022.

5. The Respondent has opposed the petition, inter-alia on the following grounds:

(i) The notice invoking arbitration does not meet the mandatory conditions and requirements of Clause 63 and 64(1)(ii)(a) of the GCC. The latter required the Petitioner to give details of the disputed issues and item-wise quantification of the claim amount. Clause 64(1)(ii)(a) precluded the non-conforming disputes from being referred to arbitration

(ii) Under Clause 34.1 of the Special Conditions of the Contract (hereafter, the `SCC'), disputes exceeding 20% of the contract value, are excluded from arbitration. The aggregate value of the claims raised by the Petitioner exceed 20% of the contract value, hence they are not arbitrable.

6. In Srico Projects Pvt. Ltd. v. Indian Oil Foundation, MANU/DE/0050/2017: (the challenge by way of SLP (C) No. 14976/2017 was dismissed), a co-ordinate Bench of this Court held that pre-arbitral steps laid down in the contract are mandatorily to be followed. Claims that are referred to arbitration without following the pre-arbitral steps are non-arbitrable. In the present case, the Respondent has claimed that the Petitioner has failed to notify all the claims to the General Manager of Railway, in terms of Clause 63 of GCC, which reads as under:

"SETTLEMENT OF DISPUTES - INDIAN RAILWAY ARBITRATION AND CONCILIATION RULES

63.1 Matters Finally Determined By The Railway: All disputes and differences of any kind whatsoever arising out of or in connection with the contract, whether during the progress of the work or after its completion and whether before or after the determination of the contract, shall be referred by the Contractor to the GM and the GM shall, within 120 days after receipt of the contractor's representation, make and notify decisions on all matters referred to by the Contractor in writing provided that matters for which provision has been made in Clauses 8, 18, 22(5), 39, 43(2), 45(a), 55, 55-A(5). 57, 57A,61(1), 61 (2) and 62(1) of Standard General Conditions of Contract or in any Clause (stated as

xcepted matter') of the Special Conditions of the Contract, shall be deemed as

xcepted matters' (matters not arbitrable) and decisions of the Railway authority, thereon shall be final and binding on the Contractor; provided further that

xcepted matters' shall stand specifically excluded from the purview of the Arbitration Clause."

7. In Vidya Drolia and Ors. v Durga Trading Cor