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
| 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
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.
An arbitration agreement remains valid and enforceable despite procedural limitations on arbitrator appointment, ensuring disputes are addressed effectively.
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 arbitration agreement is separate and severable from the underlying contract, and the Arbitral Tribunal has the competence to rule on its own jurisdiction, including the existence or validity of ....
Claims arising from contractual disputes may be arbitrable unless expressly excluded by contract terms; courts will limit initial review to the existence of a valid arbitration agreement.
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 Supreme Court clarified that an Arbitral Tribunal's jurisdiction encompasses all disputes arising from a contract unless expressly limited, and failure to issue a notice under Section 21 of the A....
Arbitration agreements remain valid despite invalid appointment procedures; courts may sever non-compliant clauses while upholding fundamental consent to arbitrate.
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