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IN THE HIGH COURT OF DELHI
Mini Pushkarna, J.
Sunehari Bagh Builders Pvt. Ltd. - Appellant
Versus
Airports Authority of India - Respondent
Arb.P. 1065 of 2022 and I.A. 14679 of 2022
Decided On : 23-11-2022




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.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 11(6) - Petition for appointment of sole arbitrator - Respondent referred only five claims to arbitrator; two additional claims concerning delay and costs not referred - The petitioner argued these claims were justified and should be referred - Court held that jurisdiction of the arbitrator is determined by the disputes referred by the appointing authority - Claims not raised before the Dispute Resolution Committee (DRC) cannot be adjudicated by the arbitrator - Petition dismissed as without merit. (Paras 1, 11, 21, 34)

(B) Arbitration Agreement - Scope and jurisdiction - The arbitrator's authority is confined to the specific disputes referred - Claims not included in the reference are not arbitrable - Doctrine of kompetenz-kompetenz upheld as arbitrator determined his jurisdiction on the matter. (Paras 24, 30, 34)

Facts of the case:
A petitioner entered into a contract for construction work with the respondent. Following the completion of the work, disputes arose regarding claims made to a DRC which only referred five out of seven claims to the arbitrator, leading to this petition. (Paras 2, 3, 5)

Findings of Court:
The court concluded that the petitioner's additional claims were outside the arbitrator's jurisdiction and that any claim not presented to the DRC cannot be considered by the arbitrator. (Para 34)

Issues: Whether the arbitrator has jurisdiction over claims not referred to him by the appointing authority and the impact of claims not presented to the DRC. (Paras 20, 34)

Ratio Decidendi: The court reaffirmed that arbitration is strictly governed by the agreement, confirming the arbitrator's lack of jurisdiction over claims not explicitly referred to him. (Paras 24, 34)

Result: Petition dismissed.

Table of Content
1. factual background of dispute resolution process. (Para 2 , 3 , 4 , 5)
2. contextual details on claims referred to drc and arbitrator. (Para 6 , 7 , 10)
3. arguments against the referral of additional claims. (Para 11 , 13 , 14 , 15 , 16)
4. discussion on the limits of arbitrator's jurisdiction. (Para 21 , 22 , 23 , 24)
5. importance of adhering strictly to arbitration clauses. (Para 30 , 31 , 32)
6. court's decision to dismiss the petition. (Para 34)

JUDGMENT

Mini Pushkarna, J.

1. By way of the present petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter called "The Act"), the petitioner seeks appointment of a sole arbitrator to adjudicate the additional disputes between the parties. The petitioner has alternatively prayed for reference of additional disputes/claims no. 6 and 7 to the Learned sole arbitrator, already appointed vide letter dated 13.12.2021.

2. Facts in brief are that the respondent had floated a tender for execution of the work of "Construction of Central Air Traffic Flow Management (CATFM) and Associated offices at Vasant Kunj, New Delhi". Petitioner was declared as successful participant in the tender and was awarded the work, pursuant to which an agreement dated 20.01.2016 was executed between the parties for Rs. 11,53,06,853/-.

3. The work was completed by the petitioner on 31.12.2018. Subsequently, petitioner invoked Clause 25 of the General Conditions of Contract (GCC) vide its letter dated 08.04.2020 and 08.06.2020, seeking reference of its disputes to a duly constituted Disputes Resolution Committee (DRC).

4. Thereafter DRC was constituted and matter was referred for adjudication on 01.01.2021. The petitioner submitted 5 claims before the DRC on 02.02.2021. DRC passed the order/recommendations on 22.09.2021, which was sent to the petitioner through email on 13.10.2021.

5. Upon receiving the recommendations of DRC, petitioner issued a letter dated 25.10.2021 seeking to refer total 7 number of claims to arbitration. Respondent however referred only 5 claims of the petitioner to the arbitrator, which formed part of the proceedings before the DRC.

6. It is the case of the petitioner that as per Clause 25 (i) of the agreement, the DRC had to give its decision within 45 days of its constitution. The relevant portion of Clause 25(i) is reproduced as herein for ready reference:-

    "Efforts of DRC should be to come to an amicable settlement of outstanding disputes. If parties agree, a written settlement will be drawn out and signed by the parties. DRC will authenticate the settlement Agreement and furnish a copy to each party. DRC will give its report within 45 days of its constitution."

7. However, in the present case the DRC was constituted on 01.01.2021 and the DRC had given its order/recommendation on 22.09.2021. Thus, the petitioner by its letter dated 25.10.2021 requested the respondent to refer 7 claims for arbitration. However, respondent after seeking consent of the petitioner out of the three named persons appointed Sh. Pradeep Kumar Gupta, former DG of CPWD as sole Arbitrator vide letter dated 13.12.2021 and referred only 5 claims.

8. Petitioner thereafter sent letter dated 15.12.2021 to the respondent, who is the appointing authority with copy to the learned arbitrator thereby making request for reference of left over claim no. 6 and 7 to the learned arbitrator for adjudication.

9. Claim no. 6 raised by the petitioner is for an amount of Rs. 40,61,196/- towards compensation for delay in decision by the DRC. Claim no. 7 is towards cost of arbitration proceedings.

10. However, the learned arbitrator in the first hearing dated 24.12.2021 observed as follows:

    "...Claimants have vide email dated 15.12.2021 addressed to Member (Ping.) AAI with copy to AT and Respondent stated that their complete claims [total 7 Nos.] are not referred to the AT. Claimant was advised by AT that the jurisdiction of AT is defined by appointment letter issued by

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