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IN THE HIGH COURT OF DELHI
Vibhu Bakhru, J.
Sagar Constructions - Appellant
Versus
Govt. of NCT of Delhi - Respondent
Arb.P. 851 of 2021
Decided On : 06-10-2021
| Table of Content |
|---|
| 1. introduction of petition and facts of the case. (Para 1 , 2) |
| 2. arguments on limitation and request for arbitration. (Para 4 , 5) |
| 3. court's analysis on limitation and arbitration invocation. (Para 6 , 7 , 8 , 9) |
| 4. conclusion and appointment of arbitrator. (Para 10 , 11 , 12 , 13 , 14) |
JUDGMENT
[Hearing Held Through Videoconferencing]
Vibhu Bakhru, J. (Oral)--The petitioner has filed the present petition under Section 11 of the Arbitration and Conciliation Act, 1996 (hereafter the `A&C Act'), inter alia, praying that an Arbitrator be appointed to adjudicate the disputes that have arisen between the parties.
2. The respondent had awarded the Contract for construction of ten numbers SPS Rooms (D/S) for D.C. Office (NW), Kanjhawala, Delhi to the petitioner. In terms of the Letter of Award (LoA) dated 14.11.2014, the works were to commence from 21.11.2014 and, to be completed on or before 20.03.2015. The petitioner claims that the respondent had failed to release the payments due for execution of the said works. This led to the petitioner invoking the agreement to refer the disputes to arbitration. By letter dated 20.06.2018, the petitioner requested the concerned Superintendent Engineer to act in accordance with Clause 25 of the General Conditions of the Contract (GCC) (the Dispute Resolution Clause). The petitioner's request for resolution of the disputes and for the appointment of an Arbitrator was rejected by the Executive Engineer on the ground that the claims raised by the petitioner were not raised within a period of one hundred and twenty days from the date of preparation of the Final Bill. The petitioner's subsequent request for arbitration was also subsequently denied by citing the same reasons.
3. Clause 25 of the GCC, which is applicable to the Contract, in question, reads as under:
"CLAUSE 25
Except where otherwise provided in the contract, all questions and disputes relating to the meaning of the specifications, design, drawings and instructions here-in before mentioned and as to the quality of workmanship or materials used on the work or as to any other question, claims, right, matter or thing whatsoever in any way arising out of or relating to the contract, designs, drawings, specifications, estimates, instructions, orders or these conditions 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 considers any work demanded of him to be outside the requirements 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 written instruction or decision. Thereupon, the Superintending Engineer shall give his written instructions 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 letter 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 30 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 d
Contractual provisions cannot extinguish rights to invoke arbitration beyond lawful limitations set by statute, upholding that timelines for claims start from when notice to arbitrate is issued.
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....
The impact of the Covid-19 pandemic on the limitation period for invoking arbitration under the Arbitration and Conciliation Act, 1996.
The main legal point established in the judgment is the strict construction of arbitration clauses and the adherence to the terms of the arbitration agreement by the parties.
Claims for arbitration must be raised promptly upon accrual of rights; failure to do so results in dismissal due to limitation.
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.
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....
An arbitration agreement remains valid and enforceable despite procedural limitations on arbitrator appointment, ensuring disputes are addressed effectively.
Arbitration requests must be filed within three years of the cause of action; failure to act in time bars subsequent petitions.
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