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IN THE HIGH COURT OF DELHI
C. Hari Shankar, J.
Delhi Transport Infrastructure Development Corporation Ltd. - Appellant
Versus
Aom Advertising Pvt. Ltd. - Respondent
O.M.P. (COMM) 291 of 2021 & I.A. 12778 of 2021, I.A. 12779 of 2021, I.A. 12780 of 2021
Decided On : 07-12-2021




Separate arbitration proceedings are mandated for distinct agreements unless the parties explicitly agree to consolidate them, aligning with the precedent established in Duro Felguera.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 34 - The court quashed the impugned order of the Arbitral Tribunal for consolidating claims arising out of three separate Concession Agreements, holding such consolidation contrary to law, specifically the principle established in Duro Felguera S.A. v. Gangavaram Port Ltd. - Separate disputes under distinct agreements necessitated separate arbitration proceedings - Each Concession Agreement containing its own arbitration clause implies distinct obligations and rights - The court emphasized that an agreement to the contrary must exist for consolidation to be permitted. (Paras 1-36)

Facts of the case:
Disputes arose from three Concession Agreements dated 5th December 2017 executed by the appellant and the respondent regarding marketing, operation, and maintenance of bus queue shelters in specific zones, with allegations of default in license fees by the respondent.

Findings of Court:
The consolidation of claims was rejected by the Tribunal, but the High Court found no merit in this decision as it contravened established legal principles regarding separate agreements.

Issues: The court addressed the legality of consolidating claims under distinct agreements and the interpretation of arbitration clauses within these agreements.

Ratio Decidendi: The court concluded that separate agreements must be treated as distinct subjects for arbitration unless there is explicit consent for consolidation, reaffirming the precedent from Duro Felguera, which dictates that parties must be agreed for consolidation to occur.

Result: Petition allowed.

Table of Content
1. application under section 34 of the arbitration act. (Para 1 , 2 , 4 , 5)
2. consolidation of claims in arbitration disputes. (Para 3 , 13 , 14)
3. the necessity for separate arbitrations under distinct agreements. (Para 15 , 18 , 24)
4. court's intervention in arbitrator's decision. (Para 31 , 32)
5. quashing of the order to consolidate claims. (Para 33 , 34 , 36)

JUDGMENT (Oral)

1. This petition, under Section 34 of the Arbitration and Conciliation Act, 1996 ("1996 Act"), at the instance of the Delhi Transport Infrastructure Development Corporation Ltd. (DTIDC), assails order dated 10th September, 2021, passed by a three-member Arbitral Tribunal, rejecting the application, under Section 16 of the 1996 Act, preferred by the petitioner before it.

2. The disputes, which arise out of three Concession Agreements dated 5th December, 2017, executed between the petitioner and the respondent, are presently in seisin before the learned Arbitral Tribunal. The respondent is the claimant before the learned Arbitral Tribunal and the petitioner is the respondent before it.

3. The respondent, in its Statement of Claim before the learned Arbitral Tribunal, consolidated its claims in respect of the three Concession Agreements. The petitioner, thereupon, moved an application under Section 16 of the 1996 Act, objecting to the consolidation of the claims and contending that the learned Arbitral Tribunal would have to treat each claim as a separate arbitrable dispute, and therefore, could not consolidate the claims. It is this application that has come to be dismissed by the order impugned in the present case.

4. Mr. Amiet Andlay, learned counsel for the petitioner, submits that he has no objection to the respondent filing separate Statements of Claims before the learned Arbitral Tribunal qua its claims in respect of each Concession Agreement and the learned Arbitral Tribunal treating them as a separate dispute for the purpose of arbitration. He, however, opposes the consolidation of the claims as has been done by the learned Arbitral Tribunal and, therefore, submits that the rejection of his Section 16 application was erroneous.

5. The Concession Agreements between the petitioner and the respondent relate to marketing, operation and maintenance of various bus queue shelters (BQS). The shelters were divided into three Zones; Zone-2, Zone-4 and Zone-5. Though, initially, a consolidated Request For Proposal (RFP) was issued by the petitioner, inviting tenders for service providers for all the three Zones, thereafter, consequent on the respondent emerging as the successful bidder, three separate Concession Agreements were executed between the petitioner and the respondent, one for each Zone, all of which were dated 5th December, 2017.

6. Two Bank guarantees, for each zone, were also furnished by the respondent, as required by each Concession Agreement.

7. The petitioner alleges that the respondent was in default of licence fee payable under the Concession Agreements, whereupon the petitioner issued notices to the respondent on 6th June, 2020, 18th June, 2020 and 8th July, 2020. These notices, it is asserted, were separately issued for each Concession Agreement, i.e. for each zone.

8. Each Concession Agreement contains its own arbitration clause, though they were identical. The arbitration clause may be reproduced thus:

    "23.1 Amicable Resolution

    Save where expressly stated to the contrary, in this Agreement, any dispute, difference or controversy of whatever nature between the Parties, howsoever arising under, out of or in relation to this Agreement (the "Dispute") shall in the first instance be attempted to be resolved amicably in accordance with the procedure set forth in sub-clause (b) below.

    (b) Either Party may require such Dispute to be referred to the Chairman DTIDCL and the Chief Executive Officer of the Concessionaire for the time being, for amicable settlement. Upon such reference, the two shall meet at the e

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