IN THE HIGH COURT OF DELHI
Mini Pushkarna, J.
V.K. Dewan & Co. - Appellant
Versus
Delhi Jal Board - Respondent
Arb.P. 866 of 2019
Decided On : 06-10-2022
| Table of Content |
|---|
| 1. contract execution and initial disputes (Para 1 , 2 , 3 , 4 , 5 , 8) |
| 2. arbitration appointment and procedural challenges (Para 6 , 9 , 10 , 11) |
| 3. limitations and estoppel in claims (Para 12 , 13 , 14 , 15 , 16) |
| 4. cause of action and withdrawal effects (Para 17 , 18 , 19 , 20 , 21 , 22 , 23) |
| 5. application of limitation periods (Para 24 , 25 , 26 , 27) |
| 6. court's refusal to refer ex facie time-barred claims (Para 28 , 29 , 30 , 31 , 32) |
| 7. final dismissal of the petition (Para 33 , 34) |
Mini Pushkarna, J.
1. The present is a petition under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred as "Act") for appointment of an Arbitrator.
2. Facts relevant for the present case are that a contract was executed between the parties on 09.10.2000 for work of construction of Underground Reservoir and Booster Pumping Station at Surajmal Vihar, Trans Yamuna, Delhi. Time period for execution of the contract was extended several times by respondent and the said work was completed by petitioner on 31.01.2005. Completion certificate was issued by the respondent - Delhi Jal Board to the petitioner on 01.03.2005.
3. After completion of the work, disputes arose between the parties in regard to the payments due to the petitioner by respondent. A notice dated 28.11.2005 was sent by petitioner to respondent for appointment of an Arbitrator. Pursuant to the said notice, respondent - Delhi Jal Board by letter dated 16.12.2005 appointed Sh. Surinder Gandotra as sole Arbitrator to adjudicate upon the disputes.
4. Before the sole Arbitrator, petitioner raised the following claims:
Claim No. 1 - Rs.6,46,975.29/- towards escalation under Clause 12 CC of the contract agreement for the period from June, 2002 to February, 2005.
Claim No. 2 - Rs.5,00,000/- towards refund of security deposit
Claim No. 3 - Rs.40,210/- towards withheld amount from 24th running bill.
Claim No. 4 - Rs.75,000/- towards the withheld amount from running bills on account of non-deputation of engineer.
Claim No. 5 - Rs.1,55,742.69/- towards loss of profit.
Claim No. 6 - Rs.41,29,488.25/- towards loss of profit due to prolongation of the contracted period by more than 32 months.
Claim No. 7 - Rs.17,78,510/- towards amount of extra expenditure incurred due to prolongation of the contracted period by more than 32 months.
Claim No.8 - interest @18 percent per annum on all the claims from 31.01.2005 till date of payment.
Claim No.9 - Rs.11,59,239.05/-
Claim No. 10 - Rs.2,00,000/-.
5. No counter claims were filed on behalf of the respondent - Delhi Jal Board.
6. On the very first day of the proceedings, learned Arbitrator issued an interim bill of Rs.1,75,000/- by applying Rules of Indian Council of Arbitration. The petitioner challenged the mandate of the Arbitrator by filing O.M.P. No.154/2006 on the ground that the contract in question did not provide for application of the Rules of Indian Council of Arbitration and that the learned Arbitrator had exceeded his jurisdiction. By order dated 18.04.2006, this Court stayed the proceedings before the said Arbitrator. However, subsequently the said petition was withdrawn by the petitioner on 20.09.2007.
7. Thereafter, the petitioner wrote a letter dated 14.01.2008 to the sole Arbitrator thereby withdrawing all his claims before the Arbitrator without prejudice to his right to agitate elsewhere.
8. Subsequently, the sole arbitrator passed an Award on 18.06.2008, thereby awarding costs of Rs. 9,91,550/- against the petitioner on account of cost of litigation and arbitration fees.
9. Aggrieved by the aforesaid Award, petitioner challenged the same before this Court by way of O.M.P. No. 346/2008, later re- numbered as O.M.P. (COMM) 43/2017. The said petition came to be disposed of by way of order dated 16.10.2018. Operative part of the order dated 16.10.2018 passed by this Court is as follows:
"7. However, there is no basis to award Rs.5 Lakhs to the CEO of Delhi Jal Board and Rs.3
Claims withdrawn do not reset the limitation period; the original cause of action's date governs the timeliness of arbitration requests.
The main legal point established in the judgment is that the limitation period for filing an application seeking appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation A....
The main legal point established in the judgment is that the limitation for filing an application under Section 11 of the Arbitration Act arises upon the failure to make the appointment of the arbitr....
The main legal point established in the judgment is the application of limitation laws and the categorization of cases as dead wood in determining the eligibility for appointment of an arbitrator.
The main legal principle established is that the Court should not reject an application for appointment of an arbitrator at the threshold unless the claim is manifestly, ex-facie and hopelessly time-....
An application under Section 11 for appointment of an arbitrator is time-barred if filed after three years from the refusal to appoint, with delays not justified.
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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