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IN THE HIGH COURT OF DELHI
Sanjeev Narula, J.
Satish Chand Rajesh Kumar Pvt. Ltd. - Appellant
Versus
New Delhi Municipal Council - Respondent
Arb.P. 241 of 2020
Decided On : 10-02-2022
| Table of Content |
|---|
| 1. overview of the arbitration clause and context. (Para 1 , 3) |
| 2. arguments regarding dismissal and pre-arbitration mechanisms. (Para 2 , 4 , 5 , 8 , 9) |
| 3. court's observations on ndmc's behavior regarding arbitration. (Para 6 , 10 , 11) |
| 4. need for allowing the petition and imposing cost on ndmc. (Para 12) |
| 5. final orders and directions given by the court. (Para 13 , 14 , 15 , 16 , 17 , 18) |
JUDGMENT
[VIA VIDEO CONFERENCING]
Sanjeev Narula, J. (Oral)
1. The present petition has been filed under Section 11 (6) of the Arbitration and Conciliation Act, 1996 [hereinafter "the Act"] seeking a direction to the Respondent to appoint an Arbitrator in terms of the arbitration clause [Clause 25] contained in the General Conditions of Contract [hereinafter "GCC"] that forms part of the Agreement dated on 15th March, 2018.
2. At the outset, Respondent contends that the present petition deserved to be dismissed and insists that without following the pre-arbitration mechanism envisaged under the arbitration clause, an Arbitrator cannot be appointed by this Court.
3. Before proceeding to examine the merits of the afore-noted contention, a brief narration of facts is necessary and read as under:
3.1. The Petitioner viz. M/s. Satish Chand Rajesh Kumar Pvt. Ltd. [hereinafter "SCRKPL"] being the L-1 bidder, was awarded work of - "Redevelopment of Bapu Samaj Sewa Kendra, Panchkuian Road, New Delhi" vide the work award letter No. D/659/EE(BM-I) dated 13th March, 2018 and an Agreement No. 72/EE/(BM-I)/2017-28 was drawn up on 15th March, 2018. Letter of Acceptance was issued on 07th February, 2018 [hereinafter "LoA"] with a scheduled date of completion of the said project as 21st August, 2019. SCRKPL also furnished a performance guarantee in terms of paragraph No. 2 of the LoA.
3.2. According to SCRKPL, the Respondent viz. New Delhi Municipal Corporation [hereinafter "NDMC"] failed to provide the drawings which were required for the commencement of the work, and this led to delay in the execution of the work. Additionally, payments due under the Agreement were withheld and costs owing to damages as well as loss caused due to idling of the staff, etc are owed to SCRKPL.
3.3. In these circumstances, disputes arose between the parties and SCRKPL sought adjudication/reference of the disputes in terms of Clause 25 of GCC. The said clause reads as follows:
"CLAUSE 25
SETTLEMENT OF DISPUTES AND ARBITRATION
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, claim, 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 Three months 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 rece
A court can appoint an arbitrator when a party fails to do so despite repeated requests and after exhausting all pre-arbitration mechanisms.
An arbitration agreement remains valid and enforceable despite procedural limitations on arbitrator appointment, ensuring disputes are addressed effectively.
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....
The pre-arbitration procedures under the arbitration clause are not always mandatory, and the court may refer disputes to arbitration if the requisites of arbitrability and notice under the Arbitrati....
The court emphasized the necessity of adhering to procedural requirements in contracts before arbitration can be invoked, underscoring the importance of a harmonized interpretation of contract clause....
The court affirmed that failure to adhere to the dispute resolution procedure allows a party to invoke arbitration directly, emphasizing the importance of timely actions in contractual disputes.
The jurisdiction of an arbitrator is limited to the claims referred to him by the appointing authority; claims not raised before the Dispute Resolution Committee are not arbitrable.
The main legal point established in the judgment is that the appointment of an independent sole arbitrator is necessary, and the refusal of the petitioner to participate in conciliation proceedings d....
The main legal point established in the judgment is that the petitioner's failure to exhaust the mandatory dispute resolution procedure as per the contract rendered the petition premature and non-mai....
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