A determinable agreement allows unilateral termination without conditions, and disputes do not justify a stay on that termination pending arbitration.

JUDGMENT

[VIA VIDEO CONFERENCING]

Sanjeev Narula, J. (Oral)

1. The present appeal has been preferred under Section 37 (2)(b) of the Arbitration and Conciliation Act, 1996 [hereinafter, "the Act"] assailing the Order dated 10th January, 2022 passed by the Sole Arbitrator, wherein the application filed by the Appellant (Claimant at Arbitration) under Section 17 of the Act was rejected - to the extent of declining stay of the impugned termination notice dated 13th April, 2021.

FACTUAL BACKGROUND

2. The Appellant-Egis India Consulting Engineers Private Limited [hereinafter, "EGIS"] was the successful bidder for providing a consultancy service for planning, designing and commissioning of a proposed Heliport and related infrastructure at Sector-36, Rohini, Delhi [hereinafter, "Project"]. In this regard, a letter of award dated 4th November, 2011 was issued to EGIS, followed by execution of an Agreement dated 29th November, 2011 between EGIS and the Respondent-Pawan Hans Limited [hereinafter, "PHL"].

3. In terms of the said Agreement, EGIS issued two bank guarantee(s) for Rs. 11,27,836.3/-and Rs. 2,00,000/-respectively, in favour of PHL. EGIS contends that construction of the Heliport has been long complete and PHL has been operating the same after its inauguration in and around January/February, 2017. EGIS also contends that no proper completion certificate has been issued, despite having fulfilled all obligations under the Agreement. EGIS had called upon PHL to release the afore-noted bank guarantees and settle its outstanding dues under invoices raised from time to time. PHL, however, retained the bank guarantees and unilateral granted extensions to EGIS, without there being any work to be performed. Besides, to avoid payments, PHL issued show-causes notices. In this background, EGIS invoked arbitration on 18th March, 2021 for adjudication of disputes relating to non- payment of the dues and for the release of the bank guarantee.

4. PHL issued the impugned `termination notice' on 13th April, 2021, whereby EGIS was called upon to make a payment of Rs. 31.96 Crores within two weeks. The said notice, also invoked Clause 2.9.1(a) of the GCC, which forms part of the terms and conditions of the letter of award.

5. EGIS responded to the said communication vide reply dated 27th April, 2021 and controverted the allegations made by PHL and disputed the "illegal" termination notice, and further, sought a reference of the disputes to arbitration.

6. EGIS then approached this Court under Section 9 of the Act [In O.M.P.(I) (COMM) 148/2021] and inter alia sought a stay on the operation of the impugned termination notice. In the said petition, this Court vide order dated 29th April, 2021, granted an interim stay on the operation of the said termination notice. Subsequently, on EGIS' application under Section 11 of the Act, this Court vide order dated 20th July, 2021 appointed an Arbitrator, and also simultaneously, disposed of the petition under Section 9 of the Act by directing that the same would be treated as one under Section 17 of the Act to be adjudicated by the Arbitrator. Till such time, the afore-noted interim order passed by the Court dated 29th April, 2021, was directed to remain operational.

7. In this background, the Arbitrator passed the impugned Order finding no legal foundation to stay the operation of the impugned termination notice. However, at the same time, invocation of the bank guarantees was stayed during pendency of the arbitration proceedings.

8. EGIS is aggrieved with the rejection of the prayer qu