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IN THE HIGH COURT OF DELHI
C. Hari Shankar, J.
Shawl Engineers and Contractors Pvt. Ltd. - Appellant
Versus
Union of India - Respondent
Arb.P. 423 of 2020
Decided On : 08-03-2021




The court emphasizes the right to arbitration under the contractual agreement when disputes arise, affirming the appointment of arbitrators for effective resolution.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 11(6) - Appointment of arbitrators - Petition seeking appointment of arbitrators on the contract dispute, with no response from the respondent implying forfeiture of their right to reply - Court orders the disputes to be referred to arbitration. (Paras 1-5, 11-12)

(B) Contractual obligations - The petitioner alleges significant delays caused by the respondent, seeking compensation for additional expenses and seeking arbitration to resolve the contractual disputes and inadequacies. (Para 6)

(C) Authority of arbitrators - The court empowers the Delhi International Arbitration Centre to appoint an arbitrator, highlighting the respondent's willingness for arbitration. (Paras 10-12)

Facts of the case:
The petitioner entered a contract for a road construction project with the respondent, claiming delays were caused by the respondent's failures, leading to additional expenses. Following unresolved disputes, the petitioner invoked arbitration.

Findings of Court:
Disputes are referred to the Delhi International Arbitration Centre for arbitration, and the respondent may submit counterclaims.

Issues: The primary issue is the resolution of disputes arising from delays and contractual obligations in a construction contract.

Ratio Decidendi: The court affirmed the jurisdiction of the Delhi International Arbitration Centre to resolve disputes amicably while recognizing the necessary appointment of arbitrators as per the agreed contract terms.

Result: Petition is disposed of, referring disputes to arbitration.

Table of Content
1. failure of respondent to respond forfeits right to reply. (Para 1 , 2)
2. appointment of arbitrators pursuant to arbitration act. (Para 3 , 4)
3. general conditions of contract provisions on arbitration. (Para 5 , 6)
4. agreement to refer disputes to independent arbitrator. (Para 7 , 8 , 10 , 12)
5. court's orders on arbitration and disposal of the petition. (Para 11 , 13)

ORDER (Oral)

1. Despite repeated opportunity, no reply is on record, filed by the respondent.

2. The right to place the reply on record, accordingly stands forfeited.

3. This is a petition under Section 11 (6) of the Arbitration and Conciliation Act, 1996, seeking appointment of arbitrators, to arbitrate on the dispute/disputes between the parties.

4. The dispute arises out of a contract, dated 23nd November, 2013, between the petitioner and the respondent for "construction of two lane road over bridge in lieu of level crossing No. 507 at Km. 1542/26-28 near Dausni Railway station along with other allied works on Laksar-Saharanpur-Tender Opened on dated-06.03.2013".

5. The contract being with the Ministry of Northern Railways, Clause 64 of the General Conditions of Contract governing contracts with the Railways would apply, which provides for arbitration as the mode of resolution of disputes and reads as under:

    "64.(1) Demand For Arbitration:

    64(1)(i) - In the event of any dispute or difference between the parties hereto as to the construction or operation of this contract, or the respective rights and liabilities of the parties on any matter in question, dispute or difference on. any account or as to the withholding by the Railway of any certificate to which the contractor may claim to be entitled to, or if the Railway fails to make a decision within 120 days, then and in any such case, but except in any of the "excepted matters" referred to in Clause 63 of these Conditions, the contractor, after 120 days but within 180 days of his presenting his final claim on disputed matters shall demand in writing that the dispute or difference be referred to arbitration.

    64(1)(ii) - The demand for arbitration shall specify the matters which are in question, or subject of the dispute or difference as also the amount of claim item-wise. Only such dispute(s) or difference(s) in respect of which the demand has been made, together with counter claims or set off, given by the Railway, shall be referred to arbitration and other matters shall not be included in the reference.

    64(1)(iii) - (a) The Arbitration proceedings shall be assumed to have commenced from the day, a written and valid demand for arbitration is received by the Railway.

    (b) The claimant shall submit his claim stating the facts supporting the claims along with all the relevant documents and the relief or remedy sought against each claim within a period of 30 days from the date of appointment of the Arbitral Tribunal.

    (c) The Railway shall submit its defence statement and counter claim(s), if any, within a period of 60 days of receipt of copy of claims from Tribunal thereafter, unless otherwise extension has been granted by Tribunal.

    (d) Place of Arbitration: The place of arbitration would be within the geographical limits of the Division of the Railway where the cause of action arose or the Headquarters of the concerned Railway or any other place with the written consent of both the parties.

    64(1)(iv) - No new claim shall be added during proceedings by either party. However, a party may amend or supplement the original claim or defence thereof during the course of arbitration proceedings subject to acceptance by Tribunal having due regard to the delay in making it.

    64(1)(v) - If the contractor(s) does/do not prefer his/their specific and final claims in writing, within a period of 90 days of receiving the intimation from the Railways that the final bill is ready for payment, he/they will be deemed to have waived his/t

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